Statement Of Income Alternative
Statement Of Income Alternative (USD $) | |||
In Millions, except Per Share data | 12 Months Ended
Dec. 31, 2009 | 12 Months Ended
Dec. 31, 2008 | 12 Months Ended
Dec. 31, 2007 |
Operating Revenues | |||
Regulated electric | $10,033 | $9,325 | $8,976 |
Non-regulated electric, natural gas, and other | 2,050 | 3,092 | 3,024 |
Regulated natural gas | 648 | 790 | 720 |
Total operating revenues | 12,731 | 13,207 | 12,720 |
Operating Expenses | |||
Fuel used in electric generation and purchased power - regulated | 3,246 | 3,007 | 2,602 |
Fuel used in electric generation and purchased power - non-regulated | 765 | 1,400 | 1,344 |
Cost of natural gas and coal sold | 433 | 613 | 557 |
Operation, maintenance and other | 3,313 | 3,351 | 3,324 |
Depreciation and amortization | 1,656 | 1,670 | 1,746 |
Property and other taxes | 685 | 639 | 649 |
Goodwill and other impairment charges | 420 | 85 | 0 |
Total operating expenses | 10,518 | 10,765 | 10,222 |
Gains (Losses) on Sales of Other Assets and Other, net | 36 | 69 | (5) |
Operating Income | 2,249 | 2,511 | 2,493 |
Other Income and Expenses | |||
Equity in earnings (losses) of unconsolidated affiliates | 70 | (102) | 157 |
Losses on sales and impairments of unconsolidated affiliates | (21) | (9) | 0 |
Other income and expenses, net | 284 | 232 | 271 |
Total other income and expenses | 333 | 121 | 428 |
Interest Expense | 751 | 741 | 685 |
Income From Continuing Operations Before Income Taxes | 1,831 | 1,891 | 2,236 |
Income Tax Expense from Continuing Operations | 758 | 616 | 712 |
Income From Continuing Operations | 1,073 | 1,275 | 1,524 |
Income (Loss) From Discontinued Operations, net of tax | 12 | 16 | (22) |
Income Before Extraordinary Items | 1,085 | 1,291 | 1,502 |
Extraordinary Items, net of tax | 0 | 67 | 0 |
Net Income | 1,085 | 1,358 | 1,502 |
Less: Net Income (Loss) Attributable to Noncontrolling Interests | 10 | (4) | 2 |
Net Income Attributable to Duke Energy Corporation | $1,075 | $1,362 | $1,500 |
Income from continuing operations attributable to Duke Energy Corporation common shareholders | |||
Basic | 0.82 | 1.01 | 1.21 |
Diluted | 0.82 | 1.01 | 1.2 |
Income from discontinued operations attributable to Duke Energy Corporation common shareholders | |||
Basic | 0.01 | 0.02 | -0.02 |
Diluted | 0.01 | 0.01 | -0.02 |
Earnings per share (before extraordinary items) | |||
Basic | 0.83 | 1.03 | 1.19 |
Diluted | 0.83 | 1.02 | 1.18 |
Earnings per share (from extraordinary items) | |||
Basic | $0 | 0.05 | $0 |
Diluted | $0 | 0.05 | $0 |
Net income attributable to Duke Energy Corporation common shareholders | |||
Basic | 0.83 | 1.08 | 1.19 |
Diluted | 0.83 | 1.07 | 1.18 |
Dividends per share | 0.94 | 0.9 | 0.86 |
Weighted-average shares outstanding | |||
Basic | 1,293 | 1,265 | 1,260 |
Diluted | 1,294 | 1,267 | 1,265 |
Statement Of Financial Position
Statement Of Financial Position Classified (USD $) | ||
In Millions | Dec. 31, 2009
| Dec. 31, 2008
|
Current Assets | ||
Cash and cash equivalents | $1,542 | $986 |
Short-term investments | 0 | 51 |
Receivables (net of allowance for doubtful accounts of $48 at December 31, 2009 and $42 at December 31, 2008) | 1,741 | 1,653 |
Inventory | 1,515 | 1,135 |
Other | 968 | 1,448 |
Total current assets | 5,766 | 5,273 |
Investments and Other Assets | ||
Investments in equity method unconsolidated affiliates | 436 | 473 |
Nuclear decommissioning trust funds | 1,765 | 1,436 |
Goodwill | 4,350 | 4,720 |
Intangibles, net | 593 | 680 |
Notes receivable | 130 | 134 |
Other | 2,533 | 2,577 |
Total investments and other assets | 9,807 | 10,020 |
Property, Plant and Equipment | ||
Cost | 55,362 | 50,304 |
Less accumulated depreciation and amortization | 17,412 | 16,268 |
Net property, plant and equipment | 37,950 | 34,036 |
Regulatory Assets and Deferred Debits | ||
Deferred debt expense | 258 | 257 |
Regulatory assets related to income taxes | 557 | 625 |
Other | 2,702 | 2,866 |
Total regulatory assets and deferred debits | 3,517 | 3,748 |
Total Assets | 57,040 | 53,077 |
Current Liabilities | ||
Accounts payable | 1,390 | 1,477 |
Notes payable and commercial paper | 0 | 543 |
Taxes accrued | 428 | 362 |
Interest accrued | 222 | 187 |
Current maturities of long-term debt | 902 | 646 |
Other | 1,146 | 1,130 |
Total current liabilities | 4,088 | 4,345 |
Long-term Debt | 16,113 | 13,250 |
Deferred Credits and Other Liabilities | ||
Deferred income taxes | 5,615 | 5,117 |
Investment tax credits | 310 | 148 |
Asset retirement obligations | 3,185 | 2,567 |
Other | 5,843 | 6,499 |
Total deferred credits and other liabilities | 14,953 | 14,331 |
Equity | ||
Common Stock, $0.001 par value, 2 billion shares authorized; 1,309 million and 1,272 million shares outstanding at December 31, 2009 and December 31, 2008, respectively | 1 | 1 |
Additional paid-in capital | 20,661 | 20,106 |
Retained earnings | 1,460 | 1,607 |
Accumulated other comprehensive loss | (372) | (726) |
Total Duke Energy Corporation shareholders' equity | 21,750 | 20,988 |
Noncontrolling Interests | 136 | 163 |
Total equity | 21,886 | 21,151 |
Total Liabilities and Equity | $57,040 | $53,077 |
1_Statement Of Financial Positi
Statement Of Financial Position Classified (Parenthetical) (USD $) | ||
In Millions, except Share data | Dec. 31, 2009
| Dec. 31, 2008
|
Receivables, allowance for doubtful accounts | $48 | $42 |
Common Stock, par value | 0.001 | 0.001 |
Common Stock, shares authorized | 2,000,000,000 | 2,000,000,000 |
Common Stock, shares outstanding | 1,309,000,000 | 1,272,000,000 |
Statement Of Cash Flows Indirec
Statement Of Cash Flows Indirect (USD $) | |||
In Millions | 12 Months Ended
Dec. 31, 2009 | 12 Months Ended
Dec. 31, 2008 | 12 Months Ended
Dec. 31, 2007 |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net Income | $1,085 | $1,358 | $1,502 |
Adjustments to reconcile net income to net cash provided by operating activities | |||
Depreciation and amortization (including amortization of nuclear fuel) | 1,846 | 1,834 | 1,888 |
Extraordinary items, net of tax | 0 | (67) | 0 |
(Gains) losses on sales of other assets | (44) | (95) | 10 |
Impairment of goodwill and other impairment charges | 449 | 94 | 0 |
Deferred income taxes | 941 | 485 | 669 |
Equity in (earnings) loss of unconsolidated affiliates | (70) | 102 | (157) |
Contributions to qualified pension plans | (800) | 0 | (412) |
(Increase) decrease in | |||
Net realized and unrealized mark-to-market and hedging transactions | 4 | (33) | 0 |
Receivables | (38) | 189 | (240) |
Inventory | (298) | (209) | (36) |
Other current assets | 277 | (449) | (22) |
Increase (decrease) in | |||
Accounts payable | (80) | (136) | (172) |
Taxes accrued | 52 | 47 | (134) |
Other current liabilities | 70 | (88) | (321) |
Other assets | (9) | 236 | 739 |
Other liabilities | 78 | 60 | (106) |
Net cash provided by operating activities | 3,463 | 3,328 | 3,208 |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Capital expenditures | (4,296) | (4,386) | (3,125) |
Investment expenditures | (137) | (147) | (91) |
Acquisitions, net of cash acquired | (124) | (389) | (66) |
Purchases of available-for-sale securities | (3,013) | (7,353) | (23,639) |
Proceeds from sales and maturities of available-for-sale securities | 2,988 | 7,454 | 24,613 |
Net proceeds from the sales of other assets, and sales of and collections on notes receivable | 70 | 92 | 154 |
Settlement of net investment hedges and other investing derivatives | 0 | 0 | (10) |
Purchases of emission allowances | (93) | (62) | (103) |
Sales of emission allowances | 67 | 104 | 52 |
Change in restricted cash | 58 | 115 | 68 |
Other | (12) | (39) | (4) |
Net cash used in investing activities | (4,492) | (4,611) | (2,151) |
Proceeds from the: | |||
Issuance of long-term debt | 4,409 | 4,794 | 823 |
Issuance of common stock related to employee benefit plans | 519 | 133 | 50 |
Payments for the redemption of: | |||
Long-term debt | (1,533) | (2,130) | (1,248) |
Convertible notes | 0 | 0 | (110) |
Decrease in cash overdrafts | 0 | 0 | (2) |
Notes payable and commercial paper | (548) | (73) | 617 |
Distributions to noncontrolling interests | (37) | (2) | (52) |
Contributions from noncontrolling interests | 0 | 6 | 68 |
Cash distributed to Spectra Energy | 0 | 0 | (395) |
Dividends paid | (1,222) | (1,143) | (1,089) |
Other | (3) | 6 | 11 |
Net cash provided by (used in) financing activities | 1,585 | 1,591 | (1,327) |
Net increase (decrease) in cash and cash equivalents | 556 | 308 | (270) |
Cash and cash equivalents at beginning of period | 986 | 678 | 948 |
Cash and cash equivalents at end of period | 1,542 | 986 | 678 |
Supplemental Disclosures: | |||
Cash paid for interest, net of amount capitalized | 689 | 677 | 827 |
Cash (received) paid for income taxes | (419) | 322 | 367 |
Significant non-cash transactions: | |||
Distribution of Spectra Energy to shareholders | 0 | 0 | 5,219 |
Accrued capital expenditures | $428 | $378 | $570 |
Statement Of Shareholders Equit
Statement Of Shareholders Equity And Other Comprehensive Income (USD $) | |||||||||||||||||||
In Millions | Common Stock
| Additional Paid-in Capital
| Retained Earnings
| Foreign Currency Adjustments
| Net Gains (Losses) on Cash Flow Hedges
| Other
| Pension and OPEB Related Adjustments to AOCI
| Common Stockholders' Equity
| Noncontrolling Interests
| Total
| |||||||||
Beginning Balance at Dec. 31, 2006 | $1 | $19,854 | $5,652 | $949 | ($45) | $2 | ($311) | $26,102 | $805 | $26,907 | |||||||||
Beginning Balance (in shares) at Dec. 31, 2006 | 1,257 | ||||||||||||||||||
Net Income | 1,500 | 1,500 | 2 | 1,502 | |||||||||||||||
Other Comprehensive Income | |||||||||||||||||||
Foreign currency translation adjustments | 200 | 200 | 1 | 201 | |||||||||||||||
Net unrealized gains (losses) on cash flow hedges | (14) | [8] | (14) | [8] | (14) | [8] | |||||||||||||
Reclassification into earnings from cash flow hedges | (1) | [9] | (1) | [9] | (1) | [9] | |||||||||||||
Pension and OPEB related adjustments to AOCI | 14 | 14 | 14 | ||||||||||||||||
Net actuarial (loss) gain | 96 | [1] | 96 | [1] | 96 | [1] | |||||||||||||
Other | 1 | [7] | 1 | [7] | 1 | [7] | |||||||||||||
Total comprehensive income | 1,796 | 3 | 1,799 | ||||||||||||||||
Adoption of uncertain tax position accounting standard | (25) | (25) | (25) | ||||||||||||||||
Adoption of pension and OPEB funded status accounting standard | (28) | (22) | (50) | (50) | |||||||||||||||
Distribution of Spectra Energy to shareholders | (4,612) | (1,156) | 6 | 148 | (5,614) | (565) | (6,179) | ||||||||||||
Purchases and other changes in noncontrolling interest in subsidiaries | (62) | (62) | |||||||||||||||||
Common stock issuances, including dividend reinvestment and employee benefits (in shares) | 5 | ||||||||||||||||||
Common stock issuances, including dividend reinvestment and employee benefits | 79 | 79 | 79 | ||||||||||||||||
Common stock dividends | (1,089) | (1,089) | (1,089) | ||||||||||||||||
Ending Balance (in shares) at Dec. 31, 2007 | 1,262 | ||||||||||||||||||
Ending Balance at Dec. 31, 2007 | 1 | 19,933 | 1,398 | (7) | (54) | 2 | (74) | 21,199 | 181 | 21,380 | |||||||||
Net Income | 1,362 | 1,362 | (4) | 1,358 | |||||||||||||||
Other Comprehensive Income | |||||||||||||||||||
Foreign currency translation adjustments | (299) | (299) | (16) | (315) | |||||||||||||||
Net unrealized gains (losses) on cash flow hedges | 10 | [8] | 10 | [8] | 10 | [8] | |||||||||||||
Reclassification into earnings from cash flow hedges | 3 | [9] | 3 | [9] | 3 | [9] | |||||||||||||
Pension and OPEB related adjustments to AOCI | 3 | 3 | 3 | ||||||||||||||||
Net actuarial (loss) gain | (280) | [2] | (280) | [2] | (280) | [2] | |||||||||||||
Unrealized loss on investments in auction rate securities | (28) | [5] | (28) | [5] | (28) | [5] | |||||||||||||
Reclassification of (gains) losses on investments in auction rate securities and other available-for-sale securities into earnings | 8 | [4] | 8 | [4] | 8 | [4] | |||||||||||||
Unrealized gain (loss) on investments in available-for-sale securities | (10) | [6] | (10) | [6] | (10) | [6] | |||||||||||||
Total comprehensive income | 769 | (20) | 749 | ||||||||||||||||
Common stock issuances, including dividend reinvestment and employee benefits (in shares) | 10 | ||||||||||||||||||
Common stock issuances, including dividend reinvestment and employee benefits | 173 | 173 | 173 | ||||||||||||||||
Common stock dividends | (1,143) | (1,143) | (1,143) | ||||||||||||||||
Additional amounts related to the spin-off of Spectra Energy | (10) | (10) | 2 | (8) | |||||||||||||||
Ending Balance (in shares) at Dec. 31, 2008 | 1,272 | ||||||||||||||||||
Ending Balance at Dec. 31, 2008 | 1 | 20,106 | 1,607 | (306) | (41) | (28) | (351) | 20,988 | 163 | 21,151 | |||||||||
Net Income | 1,075 | 1,075 | 10 | 1,085 | |||||||||||||||
Other Comprehensive Income | |||||||||||||||||||
Foreign currency translation adjustments | 323 | 323 | 18 | 341 | |||||||||||||||
Net unrealized gains (losses) on cash flow hedges | 1 | [8] | 1 | [8] | 1 | [8] | |||||||||||||
Reclassification into earnings from cash flow hedges | 18 | [9] | 18 | [9] | 18 | [9] | |||||||||||||
Pension and OPEB related adjustments to AOCI | 36 | [3] | 36 | [3] | 36 | [3] | |||||||||||||
Net actuarial (loss) gain | (21) | [2] | (21) | [2] | (21) | [2] | |||||||||||||
Unrealized loss on investments in auction rate securities | (6) | [5] | (6) | [5] | (6) | [5] | |||||||||||||
Reclassification of (gains) losses on investments in auction rate securities and other available-for-sale securities into earnings | (5) | [4] | (5) | [4] | (5) | [4] | |||||||||||||
Unrealized gain (loss) on investments in available-for-sale securities | 8 | [6] | 8 | [6] | 8 | [6] | |||||||||||||
Total comprehensive income | 1,429 | 28 | 1,457 | ||||||||||||||||
Purchases and other changes in noncontrolling interest in subsidiaries | 14 | 14 | (55) | (41) | |||||||||||||||
Common stock issuances, including dividend reinvestment and employee benefits (in shares) | 37 | ||||||||||||||||||
Common stock issuances, including dividend reinvestment and employee benefits | 546 | 546 | 546 | ||||||||||||||||
Common stock dividends | (1,222) | (1,222) | (1,222) | ||||||||||||||||
Other | (5) | (5) | (5) | ||||||||||||||||
Ending Balance (in shares) at Dec. 31, 2009 | 1,309 | ||||||||||||||||||
Ending Balance at Dec. 31, 2009 | $1 | $20,661 | $1,460 | $17 | ($22) | ($31) | ($336) | $21,750 | $136 | $21,886 | |||||||||
[1]Net actuarial gain net of $54 tax expense in 2007. | |||||||||||||||||||
[2]Net actuarial loss net of $12 tax benefit in 2009 and $159 tax benefit in 2008. | |||||||||||||||||||
[3]Net of $16 tax expense in 2009. | |||||||||||||||||||
[4]Net of $2 tax expense in 2009 and $5 tax benefit in 2008. | |||||||||||||||||||
[5]Net of $4 tax benefit in 2009 and $18 tax benefit in 2008. | |||||||||||||||||||
[6]Net of $4 tax expense in 2009 and $8 tax benefit in 2008. | |||||||||||||||||||
[7]Net of zero tax expense in 2007. | |||||||||||||||||||
[8]Net unrealized gains (losses) on cash flow hedges, net of $1 tax expense in 2009, $6 tax expense in 2008 and $9 tax benefit in 2007. | |||||||||||||||||||
[9]Reclassification into earnings from cash flow hedges, net of $10 tax expense in 2009, $2 tax expense in 2008 and zero in 2007. |
2_Statement Of Shareholders Equ
Statement Of Shareholders Equity And Other Comprehensive Income (Parenthetical) (USD $) | |||
In Millions | 12 Months Ended
Dec. 31, 2009 | 12 Months Ended
Dec. 31, 2008 | 12 Months Ended
Dec. 31, 2007 |
Net unrealized gains (losses) on cash flow hedges, tax expense | $1 | $6 | $9 |
Reclassification into earnings from cash flow hedges, tax expense | 10 | 2 | 0 |
Net actuarial(loss)gain, tax expense | 12 | 159 | 54 |
Other, tax expense | 0 | ||
Unrealized loss on investments in auction rate securities, tax expense | 4 | 18 | |
Reclassification of (gain) losses on investments in auction rate securities and other available-for-sale securities into earnings, tax expense | 2 | 5 | |
Unrealized gain (loss) on investments in available-for-sale securities, tax expense | 4 | 8 | |
Pension and OPEB related adjustments to AOCI, tax expense | $16 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Summary of Significant Accounting Policies | 1. Summary of Significant Accounting Policies Nature of Operations and Basis of Consolidation. Duke Energy Corporation (collectively with its subsidiaries, Duke Energy), is an energy company primarily located in the Americas. Duke Energy operates in the United States (U.S.) primarily through its wholly-owned subsidiaries, Duke Energy Carolinas, LLC (Duke Energy Carolinas), Duke Energy Ohio, Inc. (Duke Energy Ohio), Duke Energy Indiana, Inc. (Duke Energy Indiana) and Duke Energy Kentucky, Inc. (Duke Energy Kentucky), as well as in South and Central America through International Energy. See Note 2 for further information on Duke Energys operations and its reportable business segments. These Consolidated Financial Statements include, after eliminating intercompany transactions and balances, the accounts of Duke Energy and all majority-owned subsidiaries where Duke Energy has control, and those variable interest entities where Duke Energy is the primary beneficiary. These Consolidated Financial Statements also reflect Duke Energys proportionate share of certain generation and transmission facilities in South Carolina, Ohio, Indiana and Kentucky. On January2, 2007, Duke Energy completed the spin-off to shareholders of its natural gas businesses. The primary businesses that remained with Duke Energy post-spin are the U.S. Franchised Electric and Gas business segment, the Commercial Power business segment and the International Energy business segment. See Note 2 for further information on Duke Energys business segments. Assets and liabilities of entities included in the spin-off of Spectra Energy Corp. (Spectra Energy) were transferred from Duke Energy on a historical cost basis on the date of the spin-off transaction. No gain or loss was recognized on the distribution of these operations to Duke Energy shareholders. Approximately $20.5 billion of assets, $14.9 billion of liabilities (which included approximately $8.6 billion of debt) and $5.6 billion of common stockholders equity (which included approximately $1.0 billion of accumulated other comprehensive income) were distributed from Duke Energy as of the date of the spin-off. Use of Estimates. To conform to generally accepted accounting principles (GAAP) in the United States, management makes estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and Notes. Although these estimates are based on managements best available information at the time, actual results could differ. Cost-Based Regulation. Duke Energy accounts for certain of its regulated operations in accordance with applicable regulatory accounting guidance. The economic effects of regulation can result in a regulated company recording assets for costs that have been or are expected to be approved for recovery from customers in a future period or recording liabilities for amounts that are expected to be returned to customers in the rate-setting process in a period different from the period in which the amounts would be recorded by an unregulated enterprise. Accordingly, Duke Energy records assets and liabilities that result from the regulated ratemaking process that would not b |
Business Segments
Business Segments | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Business Segments | 2. Business Segments Duke Energy operates the following business segments, which are all considered reportable business segments: U.S. Franchised Electric and Gas, Commercial Power and International Energy. There is no aggregation of operating segments within Duke Energys reportable business segments. Duke Energys management believes these reportable business segments properly align the various operations of Duke Energy with how the chief operating decision maker views the business. Duke Energys chief operating decision maker regularly reviews financial information about each of these reportable business segments in deciding how to allocate resources and evaluate performance. U.S. Franchised Electric and Gas generates, transmits, distributes and sells electricity in central and western North Carolina, western South Carolina, central, north central and southern Indiana, and northern Kentucky. U.S. Franchised Electric and Gas also transmits, and distributes electricity in southwestern Ohio. Additionally, U.S. Franchised Electric and Gas transports and sells natural gas in southwestern Ohio and northern Kentucky. It conducts operations primarily through Duke Energy Carolinas, DukeEnergy Ohio, Duke Energy Indiana and Duke Energy Kentucky. These electric and gas operations are subject to the rules and regulations of the Federal Energy Regulatory Commission (FERC), the North Carolina Utilities Commission (NCUC), the Public Service Commission of South Carolina (PSCSC), the PUCO, the Indiana Utility Regulatory Commission (IURC) and the Kentucky Public Service Commission (KPSC). The substantial majority of U.S. Franchised Electric and Gas operations are regulated and, accordingly, these operations qualify for regulatory accounting treatment. Commercial Power owns, operates and manages power plants and engages in the wholesale marketing and procurement of electric power, fuel and emission allowances related to these plants as well as other contractual positions. Commercial Powers generation asset fleet consists of Duke Energy Ohios regulated generation in Ohio and the five Midwestern gas-fired non-regulated generation assets that were a portion of the former Duke Energy North America (DENA) operations. Commercial Powers assets, excluding wind energy generation assets, comprise approximately 7,550 net MW of power generation primarily located in the Midwestern UnitedStates. The asset portfolio has a diversified fuel mix with base-load and mid-merit coal-fired units as well as combined cycle and peaking natural gas-fired units. Effective January 2009, the generation asset output in Ohio is contracted under the ESP through December31, 2011. As discussed further in Notes 1 and 4, beginning on December17, 2008, Commercial Power reapplied regulatory accounting treatment to certain portions of its operations due to the passing of SB 221 and the approval of the ESP. Commercial Power also has a retail sales subsidiary, Duke Energy Retail Sales (DERS), which is certified by the PUCO as a Competitive Retail Electric Service (CRES) provider in Ohio. DERS serves retail electric customers in Southwest, West Central and Northern Ohio with generation and ot |
Acquisitions and Dispositions o
Acquisitions and Dispositions of Businesses and Sales of Other Assets | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Acquisitions and Dispositions of Businesses and Sales of Other Assets | 3. Acquisitions and Dispositions of Businesses and Sales of Other Assets Acquisitions. Duke Energy consolidates assets and liabilities from acquisitions as of the purchase date, and includes earnings from acquisitions in consolidated earnings after the purchase date. In June 2009, Duke Energy completed the purchase of the remaining approximate 24% noncontrolling interest in the Aguaytia Integrated Energy Project (Aguaytia), located in Peru, for approximately $28 million. Subsequent to this transaction, Duke Energy owns 100% of Aguaytia. As the carrying value of the noncontrolling interest was approximately $42 million at the date of acquisition, Duke Energys consolidated equity increased approximately $14 million as a result of this transaction. Cash paid for acquiring this additional ownership interest is included in Distributions to noncontrolling interests within Net cash provided by (used in) financing activities on the Consolidated Statements of Cash Flows. In June 2009, Duke Energy acquired North Allegheny Wind, LLC (North Allegheny) in Western Pennsylvania for approximately $124 million. The fair value of the net assets acquired were determined primarily using a discounted cash flow model as the output of North Allegheny is contracted for 231/2 years under a fixed price purchased power agreement. Substantially all of the fair value of the acquired net assets has been attributed to property, plant and equipment. There was no goodwill associated with this transaction. North Allegheny owns 70 MW of power generating assets that began commercially generating electricity in the third quarter of 2009. On September30, 2008, Duke Energy completed the purchase of a portion of Saluda River Electric Cooperative, Inc.s (Saluda) ownership interest in the Catawba Nuclear Station. Under the terms of the agreement, Duke Energy paid approximately $150 million for the additional ownership interest in the Catawba Nuclear Station. Following the closing of the transaction, Duke Energy owns approximately 19% of the Catawba Nuclear Station. No goodwill was recorded as a result of this transaction. See Note 4 for discussion of the NCUC and the PSCSC approval of Duke Energys petition requesting an accounting order to defer incremental costs incurred from the purchase of this additional ownership interest. In September 2008, Duke Energy acquired Catamount Energy Corporation (Catamount), a leading wind power company located in Rutland, Vermont. This acquisition included over 300 MW of power generating assets, including 283 net MW in the Sweetwater wind power facility in West Texas, and 20 net MW of biomass-fueled cogeneration in New England and also included approximately 1,750 MW of wind assets with the potential for development in the U.S. and United Kingdom. This transaction resulted in a purchase price of approximately $245 million plus the assumption of approximately $80 million of debt. The purchase accounting entries consisted of approximately $190 million of equity method investments, approximately $117 million of intangible assets related to wind development rights, approximately $70 million of goodwill, none of which is deductible for |
Regulatory Matters
Regulatory Matters | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Regulatory Matters | 4. Regulatory Matters Regulatory Assets and Liabilities. The substantial majority of U.S. Franchised Electric and Gas operations and certain portions of Commercial Powers operations apply regulatory accounting treatment. Accordingly, these businesses record assets and liabilities that result from the regulated ratemaking process that would not be recorded under GAAP for non-regulated entities. See Note 1 for further information. Duke Energys Regulatory Assets and Liabilities: AsofDecember31, 2009 2008 Recovery/Refund PeriodEnds(s) (in millions) Regulatory Assets(a) Net regulatory asset related to income taxes(c) $ 557 $ 625 (o) Accrued pension and post retirement(d) 1,295 1,261 (b) ARO costs and NDTF assets(d) 901 1,016 2043 Regulatory transition charges(d) 73 138 2011 Gasification services agreement buyout costs(d) 145 175 2018 Deferred debt expense(c) 151 160 2039 Vacation accrual(e) 142 137 2010 Post-in-service carrying costs and deferred operating expense(c)(d) 95 101 (o) Under-recovery of fuel costs(f)(u) 182 163 2011 Regional Transmission Organization (RTO) costs(h) 16 20 (g) Hedge costs and other deferrals(h)(r) 81 107 2011 Storm cost deferrals(d) 38 36 (b) Forward contracts to purchase emission allowances(h) 2 33 2011 Allen Steam Station/Saluda River deferrals(h)(t) 63 2014 Over-distribution of Bulk Power Marketing sharing(f) 30 2011 Other(h) 115 105 (b) Total Regulatory Assets $ 3,886 $ 4,077 Regulatory Liabilities(a) Removal costs(c)(i) $ 2,277 $ 2,162 (q) Nuclear property and liability reserves(c)(k) 188 184 2043 Demand-side management costs(j)(k) 156 134 (p) Accrued pension and other post-retirement benefits(i) 91 (b) Gas purchase costs(l) 29 14 2010 Over-recovery of fuel costs(m)(j) 218 60 2011 Under-distribution of Bulk Power Marketing sharing(n) 13 23 2010 Commodity contract termination settlement(i) 30 2014 Other(i) 106 101 (b) Total Regulatory Liabilities $ 3,108 $ 2,678 (a) All regulatory assets and liabilities are excluded from rate base unless otherwise noted. (b) Recovery/Refund period varies for these items with some currently unknown. (c) Included in rate base. (d) Included in Other Regulatory Assets and Deferred Debits on the Consolidated Balance Sheets. (e) Included in Other Current Assets on the Consolidated Balance Sheets. (f) Included in Accounts Receivable and Other Assets on the Consolidated Balance Sheets. (g) North Carolina portion of approximately $7 million to be recovered in rates through 2012. South Carolina portion of approximately $9 million to be recovered in retail rates thro |
Joint Ownership of Generating a
Joint Ownership of Generating and Transmission Facilities | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Joint Ownership of Generating and Transmission Facilities | 5. Joint Ownership of Generating and Transmission Facilities Duke Energy Carolinas, along with North Carolina Municipal Power Agency Number 1, North Carolina Electric Membership Corporation and Piedmont Municipal Power Agency, have joint ownership of Catawba Nuclear Station, which is a facility operated by Duke Energy Carolinas. As discussed in Note 3, in September 2008, Duke Energy paid approximately $150 million for an additional approximate 7% ownership interest in the Catawba Nuclear Station. Duke Energy Ohio, Columbus Southern Power Company, and Dayton Power Light jointly own electric generating units and related transmission facilities in Ohio. Duke Energy Kentucky and Dayton Power Light jointly own an electric generating unit. Duke Energy Ohio and Wabash Valley Power Association, Inc. (WVPA) jointly own Vermillion Station. Additionally, Duke Energy Indiana is a joint-owner of Gibson Station Unit No.5 with WVPA and Indiana Municipal Power Agency (IMPA), as well as a joint-owner with WVPA and IMPA of certain Indiana transmission property and local facilities. These facilities constitute part of the integrated transmission and distribution systems, which are operated and maintained by Duke Energy Indiana. Duke Energys share of jointly-owned plant or facilities included on the December31, 2009 Consolidated Balance Sheet is as follows: Ownership Share Property,Plant, and Equipment Accumulated Depreciation ConstructionWork in Progress (in millions) Duke Energy Carolinas Production: Catawba Nuclear Station (Units 1 and 2)(a) 19.2 % $827 $312 $5 Duke Energy Ohio Production: Miami Fort Station (Units 7 and 8)(b) 64.0 596 176 11 W.C. Beckjord Station (Unit 6)(b) 37.5 55 31 1 J.M. Stuart Station(b)(c) 39.0 765 221 17 Conesville Station (Unit 4)(b)(c) 40.0 292 57 14 W.M. Zimmer Station(b) 46.5 1,316 516 13 Killen Station(b)(c) 33.0 297 131 1 Vermillion(b) 75.0 197 53 Transmission(a) Various 91 53 Duke Energy Indiana Production: Gibson Station (Unit 5)(a) 50.1 327 161 Transmission and local facilities(a) Various 3,148 1,335 Duke Energy Kentucky Production: East Bend Station(a) 69.0 430 226 2 International Energy Production: Brazil Canoas I and II 47.1 357 83 (a) Included in U.S. Franchised Electric and Gas segment. (b) Included in Commercial Power segment. (c) Station is not operated by Duke Energy Ohio. Duke Energys share of revenues and operating costs of the above jointly owned generating facilities are included within the corresponding line on the Consolidated Statements of Operations. Each participant in the jointly owned facilities must provide its own financing. |
Income Taxes
Income Taxes | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Income Taxes | 6. Income Taxes The following details the components of income tax expense: Income Tax Expense FortheYearsEnded December31, 2009 2008 2007 (in millions) Current income taxes Federal $ (271 ) $ 60 $ (59 ) State 3 17 24 Foreign 96 68 64 Total current income taxes (172 ) 145 29 Deferred income taxes Federal 767 388 627 State 148 50 37 Foreign 27 46 32 Total deferred income taxes 942 484 696 Investment tax credit amortization (12 ) (13 ) (13 ) Total income tax expense from continuing operations 758 616 712 Total income tax expense (benefit) from discontinued operations (2 ) (3 ) (88 ) Total income tax expense from extraordinary item 37 Total income tax expense included in Consolidated Statements of Operations(a) $ 756 $ 650 $ 624 For the Years Ended December31, 2009 2008 2007 (in millions) Domestic $ 1,433 $ 1,575 $ 1,894 Foreign 398 316 342 Total income from continuing operations before income taxes $ 1,831 $ 1,891 $ 2,236 Reconciliation of Income Tax Expense at the U.S. Federal Statutory Tax Rate to the Actual Tax Expense from Continuing Operations (Statutory Rate Reconciliation) For the Years Ended December31, 2009 2008 2007 (in millions) Income tax expense, computed at the statutory rate of 35% $ 641 $ 663 $ 782 State income tax, net of federal income tax effect 98 43 40 Tax differential on foreign earnings (16 ) 3 (23 ) Goodwill impairment charge 130 AFUDC equity income (53 ) (52 ) (24 ) Other items, net (42 ) (41 ) (63 ) Total income tax expense from continuing operations $ 758 $ 616 $ 712 Effective tax rate 41.4 % 32.5 % 31.9 % During 2009, Duke Energy had tax benefits related to employee stock ownership plan dividends of approximately $22 million and renewable energy credits primarily related to the DEGS wind business of approximately $30 million. These benefits are reflected in the above table in Other items, net. During 2008, Duke Energy had tax benefits related to employee stock ownership plan dividends of approximately $20 million and certain foreign restructuring of approximately $25 million. These benefits are reflected in the above table in Other items, net. During 2007, Duke Energy had tax benefits related to |
Asset Retirement Obligations
Asset Retirement Obligations | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Asset Retirement Obligations | 7. Asset Retirement Obligations Asset retirement obligations, which represent legal obligations associated with the retirement of certain tangible long-lived assets, are computed as the present value of the projected costs for the future retirement of specific assets and are recognized in the period in which the liability is incurred, if a reasonable estimate of fair value can be made. The present value of the liability is added to the carrying amount of the associated asset in the period the liability is incurred and this additional carrying amount is depreciated over the remaining life of the asset. Subsequent to the initial recognition, the liability is adjusted for any revisions to the estimated future cash flows associated with the asset retirement obligation (with corresponding adjustments to property, plant, and equipment), which can occur due to a number of factors including, but not limited to, cost escalation, changes in technology applicable to the assets to be retired and changes in federal, state or local regulations, as well as for accretion of the liability due to the passage of time until the obligation is settled. Depreciation expense is adjusted prospectively for any increases or decreases to the carrying amount of the associated asset. The recognition of asset retirement obligations has no impact on the earnings of Duke Energys regulated electric operations as the effects of the recognition and subsequent accounting for an asset retirement obligation are offset by the establishment of regulatory assets and liabilities pursuant to regulatory accounting. Asset retirement obligations recognized by Duke Energy relate primarily to the decommissioning of nuclear power facilities, obligations related to right-of-way agreements, asbestos removal and contractual leases for land use. Certain of Duke Energys assets have an indeterminate life, such as transmission and distribution facilities and some gas-fired power plants and thus the fair value of the retirement obligation is not reasonably estimable. A liability for these asset retirement obligations will be recorded when a fair value is determinable. The following table presents the changes to the liability associated with asset retirement obligations during the years ended December31, 2009 and 2008: Years Ended December31, 2009 2008 (in millions) Balance as of January1, $ 2,567 $ 2,351 Liabilities incurred due to new acquisitions (a) 44 Accretion expense(b) 200 164 Liabilities settled (2 ) Revisions in estimates of cash flows(c) 389 Liabilities incurred in the current year 35 10 Other (6 ) Balance as of December31, $ 3,185 $ 2,567 (a) As discussed in Note 3, in September 2008, Duke Energy acquired an additional ownership interest in Catawba. (b) Substantially all of the accretion expense for the years ended December31, 2009 and 2008 relate to Duke Energys regulated electric operations and have been deferred in accordance with regulatory accounting treatm |
Risk Management, Derivative Ins
Risk Management, Derivative Instruments and Hedging Activities | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Risk Management, Derivative Instruments and Hedging Activities | 8. Risk Management, Derivative Instruments and Hedging Activities The primary risks Duke Energy manages by utilizing derivative instruments are commodity price risk and interest rate risk. Duke Energy closely monitors the risks associated with commodity price changes and changes in interest rates on its operations and, where appropriate, uses various commodity and interest rate instruments to manage these risks. Certain of these derivative instruments qualify for hedge accounting and are designated as hedging instruments, while others either do not qualify as a hedge or have not been designated as hedges by Duke Energy (hereinafter referred to as undesignated contracts). Duke Energys primary use of energy commodity derivatives is to hedge its generation portfolio against exposure to changes in the prices of power and fuel. Interest rate swaps are entered into to manage interest rate risk primarily associated with Duke Energys variable-rate and fixed-rate borrowings. The accounting guidance for derivatives requires the recognition of all derivative instruments not identified as NPNS as either assets or liabilities at fair value in the Consolidated Balance Sheets. For derivative instruments that qualify for hedge accounting, Duke Energy may elect to designate such derivatives as either cash flow hedges or fair value hedges. The operations of U.S. Franchised Electric and Gas business segment and certain operations of the Commercial Power business segment meet the criteria for regulatory accounting treatment. Accordingly, for derivatives designated as cash flow hedges within the regulated operations, gains and losses are reflected as a regulatory liability or asset instead of as a component of AOCI. For derivatives designated as fair value hedges or left undesignated within the regulated operations, including economic hedges associated with Commercial Powers native load generation, gains and losses associated with the change in fair value of these derivative contracts would be deferred as a regulatory liability or asset, thus having no immediate earnings impact. Within Duke Energys unregulated businesses, for derivative instruments that qualify for hedge accounting and are designated as cash flow hedges, the effective portion of the gain or loss is reported as a component of AOCI and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Any gains or losses on the derivative that represent either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings. For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative as well as the offsetting loss or gain on the hedged item are recognized in earnings in the current period. Duke Energy includes the gain or loss on the derivative in the same line item as the offsetting loss or gain on the hedged item in the Consolidated Statements of Operations. Additionally, Duke Energy enters into derivative agreements that are economic hedges that either do not qualify for hedge accounting or have not been designated as a hedg |
Fair Value of Financial Assets
Fair Value of Financial Assets and Liabilities | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Fair Value of Financial Assets and Liabilities | 9. Fair Value of Financial Assets and Liabilities On January1, 2008, Duke Energy adopted the new fair value disclosure requirements for financial instruments and non-financial derivatives. On January1, 2009, Duke Energy adopted the new fair value disclosure requirements for non-financial assets and liabilities measured at fair value on a non-recurring basis. Duke Energy did not record any cumulative effect adjustment to retained earnings as a result of the adoption of the new fair value standards. The accounting guidance for fair value defines fair value, establishes a framework for measuring fair value in GAAP in the U.S. and expands disclosure requirements about fair value measurements. Under the accounting guidance for fair value, fair value is considered to be the exchange price in an orderly transaction between market participants to sell an asset or transfer a liability at the measurement date. The fair value definition focuses on an exit price, which is the price that would be received by Duke Energy to sell an asset or paid to transfer a liability versus an entry price, which would be the price paid to acquire an asset or received to assume a liability. Although the accounting guidance for fair value does not require additional fair value measurements, it applies to other accounting pronouncements that require or permit fair value measurements. Duke Energy classifies recurring and non-recurring fair value measurements based on the following fair value hierarchy, as prescribed by the accounting guidance for fair value, which prioritizes the inputs to valuation techniques used to measure fair value into three levels: Level 1unadjusted quoted prices in active markets for identical assets or liabilities that Duke Energy has the ability to access. An active market for the asset or liability is one in which transactions for the asset or liability occur with sufficient frequency and volume to provide ongoing pricing information. Duke Energy does not adjust quoted market prices on Level 1 for any blockage factor. Level 2a fair value measurement utilizing inputs other than a quoted market price that are observable, either directly or indirectly, for the asset or liability. Level 2 inputs include, but are not limited to, quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active and inputs other than quoted market prices that are observable for the asset or liability, such as interest rate curves and yield curves observable at commonly quoted intervals, volatilities, credit risk and default rates. A level 2 measurement cannot have more than an insignificant portion of the valuation based on unobservable inputs. Level 3any fair value measurements which include unobservable inputs for the asset or liability for more than an insignificant portion of the valuation. A level 3 measurement may be based primarily on level 2 inputs. The fair value accounting guidance for financial instruments, which was effective for Duke Energy as of January1, 2008, permits entities to elect to measure many financial instruments and certain othe |
Investments in Debt and Equity
Investments in Debt and Equity Securities | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Investments in Debt and Equity Securities | 10. Investments in Debt and Equity Securities Duke Energy classifies its investments in debt and equity securities into two categories trading and available-for-sale. Investments in debt and equity securities held in grantor trusts associated with certain deferred compensation plans are classified as trading securities and are reported at fair value in the Consolidated Balance Sheets with net realized and unrealized gains and losses included in earnings each period. All other investments in debt and equity securities are classified as available-for-sale securities, which are also reported at fair value on the Consolidated Balance Sheets with unrealized gains and losses excluded from earnings and reported either as a regulatory asset or liability, as discussed further below, or as a component of other comprehensive income until realized. Duke Energys available-for-sale securities are primarily comprised of investments held in the NDTF, investments in a grantor trust at Duke Energy Indiana related to other post-retirement benefit plans as required by the IURC, the captive insurance investment portfolio and investments in auction rate debt securities. The investments within the NDTF and Duke Energy Indianas grantor trust are managed by independent investment managers with discretion to buy, sell and invest pursuant to the objectives set forth by the trust agreements. Therefore, Duke Energy has limited oversight of the day-to-day management of these investments. Since day-to-day investment decisions, including buy and sell decisions, are made by the investment manager, the ability to hold investments in unrealized loss positions is outside the control of Duke Energy. Accordingly, all unrealized losses associated with equity securities within the NDTF and Duke Energy Indianas grantor trust are considered other-than-temporary and are recognized immediately when the fair value of individual investments is less than the cost basis of the investment. Pursuant to regulatory accounting, substantially all unrealized losses associated with investments in debt and equity securities within the NDTF and Duke Energy Indianas grantor trust are deferred as a regulatory asset, thus there is no immediate impact on the earnings of Duke Energy as a result of any other-than-temporary impairments that would otherwise be required to be recognized in earnings. For investments in debt and equity securities held in the captive insurance portfolio and investments in auction rate debt securities, unrealized gains and losses are included in other comprehensive income until realized, unless it is determined that the carrying value of an investment is other-than-temporarily impaired, at which time the write-down to fair value may be included in earnings based on the criteria discussed below. For available-for-sale securities outside of the NDTF and Duke Energy Indiana grantor trust, which are discussed separately above, Duke Energy analyzes all investment holdings each reporting period to determine whether a decline in fair value should be considered other-than-temporary. Criteria used to evaluate whether an impairment associated with equity securities is other-t |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Goodwill and Intangible Assets | 11. Goodwill and Intangible Assets Goodwill. The following table shows goodwill by business segment at December31, 2009 and 2008: Balance January1, 2009 Impairment of Goodwill Acquisitions, Foreign Exchangeand Other Changes Balance December31, 2009 (in millions) U.S. Franchised Electric and Gas $ 3,500 $ $ (17) $ 3,483 Commercial Power(a) 960 (371) (20) 569 International Energy 260 38 298 Total consolidated $ 4,720 $ (371) $ 1 $ 4,350 Balance January1, 2008 Impairment of Goodwill Acquisitions, Foreign Exchangeand Other Changes Balance December31, 2008 (in millions) U.S. Franchised Electric and Gas $ 3,478 $ $ 22 $ 3,500 Commercial Power 871 89 960 International Energy 293 (33) 260 Total consolidated $ 4,642 $ $ 78 $ 4,720 (a) The 2009 impairment charge, which is disclosed below, is the first goodwill impairment charge recorded by Duke Energy since the initial transaction occurred that resulted in the recognition of goodwill. Duke Energy is required to perform an annual goodwill impairment test as of the same date each year and, accordingly, performs its annual impairment testing of goodwill as of August31. Duke Energy updates the test between annual tests if events or circumstances occur that would more likely than not reduce the fair value of a reporting unit below its carrying value. The annual analysis of the potential impairment of goodwill requires a two step process. Step one of the impairment test involves comparing the fair values of reporting units with their aggregate carrying values, including goodwill. If the carrying amount of a reporting unit exceeds the reporting units fair value, step two must be performed to determine the amount, if any, of the goodwill impairment loss. If the carrying amount is less than fair value, further testing of goodwill impairment is not performed. Step two of the goodwill impairment test involves comparing the implied fair value of the reporting units goodwill against the carrying value of the goodwill. Under step two, determining the implied fair value of goodwill requires the valuation of a reporting units identifiable tangible and intangible assets and liabilities as if the reporting unit had been acquired in a business combination on the testing date. The difference between the fair value of the entire reporting unit as determined in step one and the net fair value of all identifiable assets and liabilities represents the implied fair value of goodwill. The goodwill impairment charge, if any, would be the difference between the carrying amount of goodwill and the implied fair value of goodwill upon the completion of step two. For purposes of the step one analyses, determination of reporting units fair value was based on a combination of the income approach, which estimates the fair value of Duke Energys reporting units based o |
Investments in Unconsolidated A
Investments in Unconsolidated Affiliates and Related Party Transactions | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Investments in Unconsolidated Affiliates and Related Party Transactions | 12.Investments in Unconsolidated Affiliates and Related Party Transactions Investments in domestic and international affiliates that are not controlled by Duke Energy, but over which it has significant influence, are accounted for using the equity method. Significant investments in affiliates accounted for under the equity method are as follows: Commercial Power. As of December31, 2009 and 2008, investments accounted for under the equity method primarily consist of Duke Energys approximate 50% ownership interest in the five Sweetwater projects (Phase I-V), which are wind power assets located in Texas that were acquired as part of the acquisition of Catamount, which is further described in Note 3. International Energy. As of both December31, 2009 and 2008, investments accounted for under the equity method primarily include a 25% indirect interest in NMC, which owns and operates a methanol and MTBE business in Jubail, Saudi Arabia, and a 25% indirect interest in Attiki, a natural gas distributor in Athens, Greece. Duke Energys wholly-owned subsidiary, CGP Global Greece Holdings S.A. (CGP Greece) has as its only asset the 25% indirect interest in Attiki, and its only third-party liability is a debt obligation that is secured by the 25% indirect interest in Attiki. The debt obligation is also secured by Duke Energys indirect wholly-owned interest in CGP Greece. This debt obligation of approximately $71 million, which is reflected in Current Maturities of Long-Term Debt on Duke Energys Consolidated Balance Sheets, is otherwise non-recourse to Duke Energy. In December 2009, Duke Energy decided to abandon its investment in Attiki and the related non-recourse debt. The decision to abandon Attiki was made in part due to the non-strategic nature of the investment and insufficient cash flow from the investee to cover non-recourse debt obligations. In November 2009, CGP Greece failed to make a scheduled semi-annual installment payment of principal and interest on the debt, and in January 2010 the counterparty to the debt issued a Notice of Event of Default, asserting voting rights and rights to dividends in CGP Greece and thereby its 25% indirect interest in Attiki. As of December31, 2009, Duke Energys investment balance in Attiki was approximately $71 million, reflecting an approximate $18 million impairment charge recognized in the fourth quarter of 2009 to reduce the carrying amount of the investment to its estimated fair value. Other. As of December31, 2009 and 2008, investments accounted for under the equity method primarily include telecommunications investments. Additionally, Other includes Duke Energys effective 50% interest in Crescent which, as discussed further below, has a carrying value of zero. In connection with the renegotiation of its debt agreements in June 2008, Crescent management modified its existing business strategy to focus some of its efforts on producing near-term cash flows from its non-strategic real estate projects in order to improve liquidity. As a result of its revised business strategy to accelerate certain cash flows resulting from the June 2008 amendments to its debt agreements, Crescent updated |
Discontinued Operations
Discontinued Operations | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Discontinued Operations | 13. Discontinued Operations Income (loss) from discontinued operations was income of approximately $12 million and $16 million for 2009 and 2008, respectively, and a loss of approximately $22 million for 2007. Significant transactions occurring during the years ended December31, 2008 and 2007 that resulted in discontinued operations presentation are discussed below. Year Ended December31, 2008 Commercial Power In February 2008, Duke Energy entered into an agreement to sell its 480 MW natural gas-fired peaking generating station located near Brownsville, Tennessee to Tennessee Valley Authority for approximately $55 million. This transaction closed in April 2008 and resulted in Duke Energy recognizing an approximate $23 million pre-tax gain at closing. Year Ended December31, 2007 Commercial Power Due to the expiration of certain tax credits, Duke Energy ceased all synthetic fuel (synfuel) operations as of December31, 2007. Accordingly, the results of operations for synfuel were reclassified to discontinued operations. For the year ended December31, 2007, synfuel operations had after-tax earnings of approximately $23 million, which includes tax benefits of approximately $84 million. International Energy In February 2007, International Energy finalized the approximate $20 million sale of it 50% ownership interest in two hydroelectric power plants near Cochabamba, Bolivia to Econergy International. International Energy recorded an impairment charge in 2006 related to certain assets in Bolivia in connection with this sale. As a result of the sale, International Energy no longer has any assets in Bolivia. Spin-off of Natural Gas Businesses As discussed in Note 1, on January2, 2007, Duke Energy completed the spin-off of Spectra Energy, which principally consisted of Duke Energys former Natural Gas Transmission business segment and Duke Energys former 50% ownership interest in DCP Midstream, LLC (DCP Midstream), to Duke Energy shareholders. Income (Loss) From Discontinued Operations, net of tax, for the year ended December31, 2007 includes a pre-tax amount of approximately $18 million related to costs to achieve the Spectra Energy spin-off, primarily fees to outside service providers. Other Transactions and Balances with Spectra Energy Effective with the spin-off, Duke Energy and Spectra Energy entered into a Transition Services Agreement (TSA), which expired on December31, 2007, whereby Duke Energy provided certain support services to Spectra Energy. The amount received by Duke Energy during the year ended December31, 2007 under this TSA was approximately $15 million. Additionally, as anticipated, Duke Energy has had very limited commercial business activities with Spectra Energy subsequent to the spin-off. Additionally, effective with the spin-off, Duke Energy and Spectra Energy entered into various reinsurance and other related agreements that allocated certain assets to Spectra Energy and DCP Midstream created under insurance coverage provided prior to the spin-off by Duke Energys captive insurance subsidiary and third party reinsurance companies. Under these agreements, Spectra Energys captive insurance |
Property, Plant and Equipment
Property, Plant and Equipment | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Property, Plant and Equipment | 14. Property, Plant and Equipment December31, Estimated UsefulLife 2009 2008 (Years) (in millions) Land $ 725 $ 687 PlantRegulated Electric generation, distribution and transmission(a) 8125 35,983 34,005 Natural gas transmission and distribution 1260 1,694 1,566 Other buildings and improvements(a) 25100 617 564 PlantUnregulated Electric generation, distribution and transmission(a) 8100 5,120 3,989 Other buildings and improvements(a) 20 90 1,855 1,698 Nuclear fuel 1,079 966 Equipment(a) 433 799 658 Vehicles 526 77 81 Construction in process 5,336 4,379 Other(a) 533 2,077 1,711 Total property, plant and equipment 55,362 50,304 Total accumulated depreciationregulated(b), (c) (15,526) (14,681) Total accumulated depreciationunregulated(c) (1,886) (1,587) Total net property, plant and equipment $ 37,950 $ 34,036 (a) Includes capitalized leases of approximately $384 million and $208 million at December31, 2009 and 2008, respectively. (b) Includes accumulated amortization of nuclear fuel of approximately $603 million and $484 million at December31, 2009 and 2008, respectively. (c) Includes aggregate accumulated amortization of capitalized leases of approximately $20 million and $37 million for 2009 and 2008, respectively. Capitalized interest, which includes the debt component of AFUDC, amounted to approximately $102 million, $93 million and $71 million for 2009, 2008 and 2007, respectively. |
Debt and Credit Facilities
Debt and Credit Facilities | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Debt and Credit Facilities | 15. Debt and Credit Facilities Summary of Debt and Related Terms Weighted- Average Rate YearDue December31, 2009 2008 (in millions) Unsecured debt 6.1 % 20102037 $ 7,922 $ 6,360 Secured debt 3.4 % 20102017 660 737 First mortgage bonds(a) 5.7 % 20102040 5,940 4,165 Capital leases 6.7 % 20102046 248 137 Other debt(b) 1.1 % 20102041 1,843 2,084 Notes payable and commercial paper(c)(d) 0.4 % 450 993 Fair value hedge carrying value adjustment 18 25 Unamortized debt discount and premium, net (66 ) (62 ) Total debt(e) 17,015 14,439 Current maturities of long-term debt (902 ) (646 ) Short-term notes payable and commercial paper(f) (543 ) Total long-term debt $ 16,113 $ 13,250 (a) As of December31, 2009, substantially all of U.S. Franchised Electric and Gas electric plant in service is mortgaged under the mortgage bond indenture of Duke Energy Carolinas, Duke Energy Ohio and Duke Energy Indiana. (b) Includes $1,410 million and $1,569 million of Duke Energy tax-exempt bonds as of December31, 2009 and 2008, respectively. As of December31, 2009 and 2008, $331 million and $404 million, respectively, was secured by first mortgage bonds and $433 million and $494 million, respectively, was secured by a letter of credit. (c) Includes $450 million as of both December31, 2009 and 2008 that was classified as Long-term Debt on the Consolidated Balance Sheets due to the existence of long-term credit facilities which back-stop these commercial paper balances, along with Duke Energys ability and intent to refinance these balances on a long-term basis. The weighted-average days to maturity was 14 days as of December31, 2009 and 10 days as of December31, 2008. (d) Includes approximately $279 million at December31, 2008 related to Duke Energy Ohios drawdown under the master credit facility. (e) As of December31, 2009 and 2008, $479 million and $414 million, respectively, of debt was denominated in Brazilian Reals. (f) Weighted-average rates on outstanding short-term notes payable and commercial paper was 3.4% as of December31, 2008. Unsecured Debt. In September 2009, Duke Energy Kentucky issued $100 million of senior debentures, which carry a fixed interest rate of 4.65% and mature October1, 2019. Proceeds from the issuance were used to repay Duke Energy Kentuckys borrowings under Duke Energys master credit facility, to replenish cash used to repay $20 million principal amount of debt due September15, 2009 and for general corporate purposes. In August 2009, Duke Energy issued $1 billion principal amount of senior notes, of which $500 million carry a fixed interest rate of 3.95% and mature September15, 2014 and $500 million carry a fixed interest rate of 5.05% and mature September15, 2019. Proceeds from the issuance were used to redeem c |
Commitments and Contingencies
Commitments and Contingencies | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Commitments and Contingencies | 16. Commitments and Contingencies General Insurance Duke Energy carries insurance and reinsurance coverage either directly or through its captive insurance company, Bison, and its affiliates, consistent with companies engaged in similar commercial operations with similar type properties. Duke Energys insurance coverage includes (i)commercial general public liability insurance for liabilities arising to third parties for bodily injury and property damage resulting from Duke Energys operations; (ii)workers compensation liability coverage to statutory limits; (iii)automobile liability insurance for all owned, non-owned and hired vehicles covering liabilities to third parties for bodily injury and property damage; (iv)insurance policies in support of the indemnification provisions of Duke Energys by-laws and (v)property insurance covering the replacement value of all real and personal property damage, excluding electric transmission and distribution lines, including damages arising from boiler and machinery breakdowns, earthquake, flood damage and extra expense. All coverage is subject to certain deductibles or retentions, sublimits, terms and conditions common for companies with similar types of operations. In 2006, Bison was a member of sEnergy Insurance Limited (sEnergy), which provided business interruption reinsurance coverage for Duke Energys non-nuclear facilities. Duke Energy accounted for these memberships under the cost method, as it did not have the ability to exert significant influence over these investments. sEnergy ceased insuring events subsequent to May15, 2006, and is currently winding down its operations and settling its outstanding claims. Bison will continue to pay additional premiums to sEnergy as it settles its outstanding claims during its wind-down; however, Duke Energy does not anticipate that the payments associated with the settlement of these outstanding claims will have a material impact on its consolidated results of operations, cash flows or financial position. Duke Energy also maintains excess liability insurance coverage above the established primary limits for commercial general liability and automobile liability insurance. Limits, terms, conditions and deductibles are comparable to those carried by other energy companies of similar size. The cost of Duke Energys general insurance coverage can fluctuate year to year reflecting the changing conditions of the insurance markets. Nuclear Insurance Duke Energy Carolinas owns and operates the McGuire and Oconee Nuclear Stations and operates and has a partial ownership interest in the Catawba Nuclear Station. The McGuire and Catawba Nuclear Stations have two nuclear reactors each and Oconee has three. Nuclear insurance includes: nuclear liability coverage; property, decontamination and premature decommissioning coverage; and business interruption and/or extra expense coverage. The other joint owners of the Catawba Nuclear Station reimburse Duke Energy Carolinas for certain expenses associated with nuclear insurance premiums. The Price-Anderson Act requires Duke Energy to provide for public liability claims resulting from nuclear incidents to the m |
Guarantees and Indemnifications
Guarantees and Indemnifications | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Guarantees and Indemnifications | 17. Guarantees and Indemnifications Duke Energy and its subsidiaries have various financial and performance guarantees and indemnifications which are issued in the normal course of business. As discussed below, these contracts include performance guarantees, stand-by letters of credit, debt guarantees, surety bonds and indemnifications. Duke Energy and its subsidiaries enter into these arrangements to facilitate commercial transactions with third parties by enhancing the value of the transaction to the third party. As discussed in Note 1, on January2, 2007, Duke Energy completed the spin-off of its natural gas businesses to shareholders. Guarantees that were issued by Duke Energy, Cinergy or International Energy, or were assigned to Duke Energy prior to the spin-off remained with Duke Energy subsequent to the spin-off. Guarantees issued by Spectra Energy Capital, LLC (Spectra Capital) or its affiliates prior to the spin-off remained with Spectra Capital subsequent to the spin-off, except for certain guarantees that are in the process of being assigned to Duke Energy. During this assignment period, Duke Energy has indemnified Spectra Capital against any losses incurred under these guarantee obligations. The maximum potential amount of future payments associated with the guarantees issued by Spectra Capital is approximately $250 million. Duke Energy has issued performance guarantees to customers and other third parties that guarantee the payment and performance of other parties, including certain non-wholly-owned entities, as well as guarantees of debt of certain non-consolidated entities and less than wholly-owned consolidated entities. If such entities were to default on payments or performance, Duke Energy would be required under the guarantees to make payments on the obligations of the less than wholly-owned entity. The maximum potential amount of future payments Duke Energy could have been required to make under these guarantees as of December31, 2009 was approximately $455 million. Of this amount, approximately $195 million relates to guarantees issued on behalf of less than wholly-owned consolidated entities, with the remainder related to guarantees issued on behalf of third parties and unconsolidated affiliates of Duke Energy. Approximately $285 million of the guarantees expire between 2010 and 2021, with the remaining performance guarantees having no contractual expiration. Included in the maximum potential amount of future payments discussed above is approximately $61 million of maximum potential amounts of future payments associated with guarantees issued to customers or other third parties related to the payment or performance obligations of certain entities that were previously wholly-owned by Duke Energy but which have been sold to third parties, such as DukeSolutions, Inc. (DukeSolutions) and Duke Engineering Services, Inc. (DES). These guarantees are primarily related to payment of lease obligations, debt obligations, and performance guarantees related to provision of goods and services. Duke Energy has received back-to-back indemnification from the buyer of DES indemnifying Duke Energy for any amounts paid relate |
Earnings Per Share
Earnings Per Share | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Earnings Per Share | 18. Earnings Per Share Basic earnings per share (EPS) is computed by dividing net income attributable to Duke Energy common stockholders, adjusted for distributed and undistributed earnings allocated to participating securities, by the weighted-average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income attributable to Duke Energy common stockholders, as adjusted, by the diluted weighted-average number of common shares outstanding during the period. Diluted EPS reflects the potential dilution that could occur if securities or other agreements to issue common stock, such as stock options, phantom shares and stock-based performance unit awards were exercised or settled. Effective January1, 2009, Duke Energy began applying revised accounting guidance for EPS related to participating securities, whereby unvested share-based payment awards that have non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) when dividends are paid to common stockholders, irrespective of whether the award ultimately vests, constitute participation rights and should be included in the computation of basic EPS using the two-class method. All prior period EPS data was retrospectively adjusted to conform to these revised accounting provisions. The following table illustrates Duke Energys basic and diluted EPS calculations and reconciles the weighted-average number of common shares outstanding to the diluted weighted-average number of common shares outstanding for the years ended December31, 2009, 2008, and 2007. (in millions, except per share amounts) Income Average Shares EPS 2009 Income from continuing operations attributable to Duke Energy common shareholders, as adjusted for participating securitiesbasic $ 1,061 1,293 $ 0.82 Effect of dilutive securities: Stock options, phantom, performance and unvested stock 1 Income from continuing operations attributable to Duke Energy common shareholders, as adjusted for participating securitiesdiluted $ 1,061 1,294 $ 0.82 2008 Income from continuing operations attributable to Duke Energy common shareholders, as adjusted for participating securitiesbasic $ 1,276 1,265 $ 1.01 Effect of dilutive securities: Stock options, phantom, performance and restricted stock 2 Income from continuing operations attributable to Duke Energy common shareholders, as adjusted for participating securitiesdiluted $ 1,276 1,267 $ 1.01 2007 Income from continuing operations attributable to Duke Energy common shareholders, as adjusted for participating securitiesbasic $ 1,518 1,260 $ 1.21 Effect of dilutive securities: Stock options, phantom, performance and restricted stock 4 Contingently convertible bond 1 Income from continuing operations attribut |
Stock-Based Compensation
Stock-Based Compensation | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Stock-Based Compensation | 19. Stock-Based Compensation For employee awards, equity classified stock-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized as expense or capitalized as a component of property, plant and equipment over the requisite service period. Duke Energys 2006 Long-Term Incentive Plan (the 2006 Plan) reserved 60million shares of common stock for awards to employees and outside directors. The 2006 Plan superseded the 1998 Long-Term Incentive Plan, as amended (the 1998 Plan), and no additional grants will be made from the 1998 Plan. Under the 2006 Plan, the exercise price of each option granted cannot be less than the market price of Duke Energys common stock on the date of grant and the maximum option term is 10 years. The vesting periods range from immediate to five years. Duke Energy has historically issued new shares upon exercising or vesting of share-based awards. In 2010, Duke Energy may use a combination of new share issuances and open market repurchases for share-based awards which are exercised or become vested; however Duke Energy has not determined with certainty the amount of such new share issuances or open market repurchases. The 2006 Plan allows for a maximum of 15million shares of common stock to be issued under various stock-based awards other than options and stock appreciation rights. Stock-Based Compensation Expense Pre-tax stock-based compensation expense recorded in the Consolidated Statements of Operations is as follows: For the Years Ended December31, 2009(a) 2008(a) 2007 (in millions) Stock Options $ 2 $ 2 $ 5 Phantom Awards 17 17 20 Performance Awards 20 23 12 Other Stock Awards 1 1 2 Total $ 40 $ 43 $ 39 (a) Excludes stock-based compensation cost capitalized as a component of property, plant and equipment of approximately $4 million and $3 million for the years ended December31, 2009 and 2008, respectively. The tax benefit associated with the stock-based compensation expense for the years ended December31, 2009, 2008 and 2007 was approximately $16 million, $17 million and $15 million, respectively. Stock Option Activity Options (inthousands) Weighted- Average Exercise Price Weighted- Average Remaining Life(in years) Aggregate Intrinsic Value (in millions) Outstanding atDecember31,2008 19,790 $ 17 Granted 603 15 Exercised (1,822 ) 13 Forfeited or expired (1,265 ) 17 Outstanding at December31, 2009 17,306 $ 18 3.1 $ 37 Exercisable at December31, 2009 16,703 $ 18 2.8 $ 36 Options Expected to Vest 603 $ 15 9.1 $ 2 On December31, 2008 and 2007, Duke Energy had approximately 19million and 20million exercisable options, respectively, with a weighted-average exercise price of approximate |
Employee Benefit Plans
Employee Benefit Plans | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Employee Benefit Plans | 20. Employee Benefit Plans Defined Benefit Retirement Plans Duke Energy and its subsidiaries (including legacy Cinergy businesses) maintain qualified, non-contributory defined benefit retirement plans. The plans cover most U.S. employees using a cash balance formula. Under a cash balance formula, a plan participant accumulates a retirement benefit consisting of pay credits that are based upon a percentage (which varies with age and years of service) of current eligible earnings and current interest credits. Certain legacy Cinergy U.S. employees are covered under plans that use a final average earnings formula. Under a final average earnings formula, a plan participant accumulates a retirement benefit equal to a percentage of their highest 3-year average earnings, plus a percentage of their highest 3-year average earnings in excess of covered compensation per year of participation (maximum of 35 years), plus a percentage of their highest 3-year average earnings times years of participation in excess of 35 years. Duke Energy also maintains non-qualified, non-contributory defined benefit retirement plans which cover certain executives. Duke Energys policy is to fund amounts on an actuarial basis to provide assets sufficient to meet benefit payments to be paid to plan participants. During 2009, Duke Energy made contributions to its U.S. qualified pension plans of approximately $800 million. There were no contributions to the U.S. qualified pension plans during the year ended December31, 2008. Duke Energy made a contribution of approximately $350 million to the legacy Cinergy qualified pension plans during the year ended December31, 2007. Actuarial gains and losses are amortized over the average remaining service period of the active employees. The average remaining service period of active employees covered by the qualified retirement plans is 11 years. The average remaining service period of active employees covered by the non-qualified retirement plans is nine years. Duke Energy determines the market-related value of plan assets using a calculated value that recognizes changes in fair value of the plan assets in a particular year on a straight line basis over the next five years. Net periodic benefit costs disclosed in the tables below for the qualified, non-qualified and other post-retirement benefit plans represent the cost of the respective benefit plan for the periods presented. However, portions of the net periodic benefit costs disclosed in the tables below have been capitalized as a component of property, plant and equipment. As required by the applicable accounting rules, Duke Energy uses a December31 measurement date for its plan assets. Qualified Pension Plans Components of Net Periodic Pension Costs: Qualified Pension Plans For the Years Ended December31, 2009(a) 2008(a) 2007(a) (in millions) Service cost $ 85 $ 92 $ 96 Interest cost on projected benefit obligation 257 254 246 Expected return on plan assets (362 ) (340 ) (319 ) Amortization of prior service cost 7 |
Variable Interest Entities
Variable Interest Entities | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Variable Interest Entities | 21. Variable Interest Entities Power Sale Special Purpose Entities (SPEs). Duke Energy is the primary beneficiary of and consolidates two thinly-capitalized SPEs that have been created to finance and execute individual power sale agreements with Central Maine Power Company (CMP) for approximately 45 MW of capacity, which expired in 2009, and 35 MW of capacity, ending in 2016. In addition, these SPEs have individual power purchase agreements (PPA) with Duke Energy Commercial Enterprises, Inc. (DECE), formerly Cinergy Capital Trading, Inc., a wholly-owned subsidiary of Duke Energy, to supply the power. DECE also provides various services, including certain credit support facilities. The following summarizes the structure of each entity: CinCap IV. CinCap IV was created in July 1998 to facilitate the buyout of a power sales agreement that Stratton Energy Associates (Stratton) held with CMP. Approximately $159 million was paid to Stratton to buyout that contract. This capital was raised through two debt tranches (approximately 96.7% of CinCap IV capitalization) and equity (approximately 3.3% of CinCap IV capitalization). The equity was provided by 1998 CinPower Trust, which is in turned owned 90% by Barclays (3% holder) and 10% by DECE. The capitalization (along with certain miscellaneous fees) of CinCap IV is to be repaid through a monthly reservation payment from CMP. Contemporaneous with the buyout of the Stratton PPA, CinCap IV executed a power sales agreement with CMP (Replacement PPA) to deliver 45 MW of capacity and energy to CMP. CinCap IV also executed a power purchase agreement with DECE (Supply PPA) that contains virtually identical terms, except for the aforementioned reservation payment and a $3 less per MWh energy charge. Cinergy guaranteed the performance of DECE under this PPA (with market-based liquidated damages), but did not guarantee the payment by CinCap IV on its debt obligations. This agreement expired in 2009. As of December, 31, 2009, the balance on the Consolidated Balance Sheets related to CinCap IV was an insignificant amount. CinCap V. CinCap V was created in February 1999 to facilitate the buyout of a power sales agreement that Alternative Energy (AEI) held with CMP. Approximately $96 million was paid to AEI to buyout that contract. This capital was raised through two debt tranches (approximately 96.7% of CinCap V capitalization) and equity (approximately 3.3% of CinCap IV capitalization). The equity was provided by two parties: (a)90% by Franklin Life Insurance Company and (b)10% by DECE. The capitalization (along with certain miscellaneous fees) of CinCap V is being repaid through a monthly reservation payment from CMP. Contemporaneous with the buyout of the AEI PPA, CinCap V executed a power sales agreement with CMP (Replacement PPA) to deliver 35 MW (only 25 in certain months) of capacity and energy to CMP through December 2016. CinCap V also executed a power purchase agreement with DECE (Supply PPA) that contains virtually identical terms, except for the aforementioned reservation payment and a $0.50 less per MWh energy charge. Cinergy guarantees the performance of DECE under this PPA (with market-ba |
Other Income and Expenses, net
Other Income and Expenses, net | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Other Income and Expenses, net | 22. Other Income and Expenses, net The components of Other Income and Expenses, net on the Consolidated Statements of Operations for the years ended December31, 2009, 2008 and 2007 are as follows: FortheyearsendedDecember31, 2009 2008 2007 (in millions) Income/(Expense): Interest income $77 $130 $192 Foreign exchange gains (losses)(a) 23 (20 ) 14 AFUDC equity 153 148 69 Deferred returns (7 ) (11 ) (15 ) Impairments of available-for-sale securities(b) (13 ) Other 38 (2 ) 11 Total $284 $232 $271 (a) Primarily relates to International Energys remeasurement of certain cash and debt balances into the functional currency. (b) See Note 10 for additional information. |
Subsequent Events
Subsequent Events | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Subsequent Events | 23. Subsequent Events For information on subsequent events related to regulatory matters, investments in unconsolidated affiliates and related party transactions, commitments and contingencies and variable interest entities, see Notes 4, 12, 16 and 21, respectively. In January 2010, Duke Energy announced plans to offer a voluntary severance plan to approximately 8,750 eligible employees. As this is a voluntary plan, all severance benefits offered under this plan are considered special termination benefits under GAAP. Special termination benefits are measured upon employee acceptance and recorded immediately absent a significant retention period. If a significant retention period exists, the cost of the special termination benefits are recorded ratably over the remaining service periods of the affected employees. The window for employees to request to voluntarily end their employment under this plan opened on February3, 2010 and closed on February24, 2010 for approximately 8,400 eligible employees. For employees affected by the consolidation of Duke Energys corporate functions in Charlotte, North Carolina, as discussed further below, the window will close March31, 2010. Duke Energy currently estimates severance payments associated with this voluntary plan, based on employees requests to voluntarily end their employment received through February24, 2010, of approximately $130 million. However, until management of Duke Energy approves the requests, it reserves the right to reject any request to volunteer based on business needs and/or excessive participation. In addition, in January 2010, Duke Energy announced that it will consolidate certain corporate office functions, resulting in transitioning over the next two years of approximately 350 positions from its offices in the Midwest to its corporate headquarters in Charlotte, North Carolina. Employees who do not relocate have the option to elect to participate in the voluntary plan discussed above, find a regional position within Duke Energy or remain with Duke Energy through a transition period, at which time a reduced severance benefit would be paid under Duke Energys ongoing severance plan. Management cannot currently estimate the costs, if any, of severance benefits which will be paid to its employees due to this office consolidation. Additionally, Duke Energy believes that it is possible that the voluntary severance plan may trigger settlement accounting or curtailment accounting with respect to its pension and other post-retirement benefit plans. At this time, management is unable to determine the likelihood that settlement or curtailment accounting will be triggered. |
Quarterly Financial Data
Quarterly Financial Data (Unaudited) | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Quarterly Financial Data (Unaudited) | 24. Quarterly Financial Data (Unaudited) First Quarter Second Quarter Third Quarter Fourth Quarter Total (In millions, except per share data) 2009 Operating revenues $ 3,312 $ 2,913 $ 3,396 $ 3,110 $ 12,731 Operating income 681 528 445 595 2,249 Net income attributable to Duke Energy Corporation 344 276 109 346 1,075 Earnings per share: Basic(a) $ 0.27 $ 0.21 $ 0.08 $ 0.26 $ 0.83 Diluted(a) $ 0.27 $ 0.21 $ 0.08 $ 0.26 $ 0.83 2008 Operating revenues $ 3,337 $ 3,229 $ 3,508 $ 3,133 $ 13,207 Operating income 751 683 577 500 2,511 Income before extraordinary items 465 351 215 260 1,291 Net income attributable to Duke Energy Corporation 465 351 215 331 1,362 Earnings per share (before extraordinary items): Basic(a) $ 0.37 $ 0.28 $ 0.17 $ 0.21 $ 1.03 Diluted(a) $ 0.37 $ 0.28 $ 0.17 $ 0.21 $ 1.02 Earnings per share: Basic(a) $ 0.37 $ 0.28 $ 0.17 $ 0.26 $ 1.08 Diluted(a) $ 0.37 $ 0.28 $ 0.17 $ 0.26 $ 1.07 (a) Quarterly EPS amounts are meant to be stand-alone calculations and are not always additive to full-year amount due to rounding. During the first quarter of 2009, Duke Energy recorded the following unusual or infrequently occurring item: an approximate $33 million charge associated with performance guarantees issued on behalf of Crescent (see Note 17). During the second quarter of 2009, Duke Energy recorded the following unusual or infrequently occurring item: an approximate $33 million charge associated with an adverse ruling on prior years transmission fees in Brazil (see Note 16). During the third quarter of 2009, Duke Energy recorded the following unusual or infrequently occurring items: an approximate $371 million non-cash goodwill impairment charge related to the non-regulated Midwest generation reporting unit to write-down the value of the goodwill to the estimated fair value (see Note 11); and an approximate $42 million of pre-tax impairment charges related to certain generating assets in the Midwest to write-down the value of these assets to their estimated fair value (see Note 11). During the fourth quarter of 2009, Duke Energy recorded the following unusual or infrequently occurring item: an approximate $18 million pre-tax impairment charge to write-down the carrying value of International Energys investment in Attiki (see Note 12). During the first quarter of 2008, Duke Energy recorded the following unusual or infrequently occurring item: Duke Energys proportionate share of impairment charges reco |
SCHEDULE I - CONDENSED PARENT C
SCHEDULE I - CONDENSED PARENT COMPANY FINANCIAL STATEMENTS | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
SCHEDULE I - CONDENSED PARENT COMPANY FINANCIAL STATEMENTS | DUKE ENERGY CORPORATION SCHEDULE I - CONDENSED PARENT COMPANY FINANCIAL STATEMENTS CONDENSED STATEMENTS OF OPERATIONS (In millions, except per-share amounts) Years Ended December31, 2009 2008 2007 Operating Revenues $ - $ - $ 15 Operating Expenses 1 (4) (1) Operating (Loss) Income (1) 4 16 Equity in Earnings of Subsidiaries 1,095 1,275 1,421 Other Income and Expenses, net 9 (8) 52 Interest Expense 99 42 23 Income Before Income Taxes 1,004 1,229 1,466 Income Tax Benefit (59) (50) (56) Income From Continuing Operations 1,063 1,279 1,522 Income (Loss) From Discontinued Operations, net of tax 12 16 (22) Income Before Extraordinary Items 1,075 1,295 1,500 Extraordinary Items, net of tax - 67 - Net Income $ 1,075 $ 1,362 $ 1,500 Common Stock Data Earnings per share (from continuing operations) Basic $ 0.82 $ 1.01 $ 1.21 Diluted $ 0.82 $ 1.01 $ 1.20 Earnings (loss) per share (from discontinued operations) Basic $ 0.01 $ 0.02 $ (0.02) Diluted $ 0.01 $ 0.01 $ (0.02) Earnings per share (before extraordinary items) Basic $ 0.83 $ 1.03 $ 1.19 Diluted $ 0.83 $ 1.02 $ 1.18 Earnings per share (from extraordinary items) Basic $ - $ 0.05 $ - Diluted $ - $ 0.05 $ - Earnings per share Basic $ 0.83 $ 1.08 $ 1.19 Diluted $ 0.83 $ 1.07 $ 1.18 Dividends per share $ 0.94 $ 0.90 $ 0.86 Weighted-average shares outstanding Basic 1,293 1,265 1,260 Diluted 1,294 1,267 1,265 DUKE ENERGY CORPORATION SCHEDULE I - CONDENSED PARENT COMPANY FINANCIAL STATEMENTS BALANCE SHEETS (In millions, except per-share amounts) December31, 2009 2008 ASSETS Current Assets Cash and cash equivalents $ 365 $ 5 Short-term investments - 5 Receivables 1,240 894 Other 55 175 Total current assets 1,660 1,079 Investments and Other Assets Notes receivable 450 450 Investment in consolidated subsidiaries 23,361 21,814 Other 1,099 1,106 Total investments and other assets 24,910 23,370 Total Assets $ 26,570 $ 24,449 LIABILITIES AND EQUITY Current Liabilities Accounts payable $ 102 $ 102 Notes payable and commercial paper - 264 Taxes accrued - 27 Other 71 92 Total current liabilities 173 485 Long-term Debt 2,971 1,224 Other Long-Term Liabilities Deferred income taxes 175 35 Oth |
SCHEDULE II-VALUATION AND QUALI
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS AND REVERSE | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS AND REVERSE | DUKE ENERGY CORPORATION SCHEDULE IIVALUATION AND QUALIFYING ACCOUNTS AND REVERSE Additions: Balanceat Beginning of Period Chargedto Expense Chargedto Other Accounts Deductions(a) Balanceat End of Period (In millions) December31, 2009: Injuries and damages $ 1,035 $ $ $ 51 $ 984 Allowance for doubtful accounts 42 23 9 26 48 Other(b) 555 52 24 235 396 $ 1,632 $ 75 $ 33 $ 312 $ 1,428 December31, 2008: Injuries and damages $ 1,086 $ $ $ 51 $ 1,035 Allowance for doubtful accounts 67 34 59 42 Other(b) 623 137 36 241 555 $ 1,776 $ 171 $ 36 $ 351 $ 1,632 December31, 2007: Injuries and damages $ 1,184 $ 5 $ 16 $ 119 $ 1,086 Allowance for doubtful accounts 94 37 7 71 67 Other(b) 1,105 98 109 689 623 $ 2,383 $ 140 $ 132 $ 879 $ 1,776 (a) Principally cash payments and reserve reversals. For 2007, this also includes the effects of amounts included in the spin-off of Spectra Energy Corp. (Spectra Energy) on January2, 2007. (b) Principally nuclear property insurance reserves at Duke Energy Carolinas, insurance reserves at Bison Insurance Company Limited (Bison) and other reserves, included in Other within Current Liabilities or Other within Deferred Credits and Other Liabilities on the Consolidated Balance Sheets. The valuation and reserve amounts above do not include unrecognized tax benefits amounts or deferred tax asset valuation allowance amounts. |
Document Information
Document Information | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Document Type | 10-K |
Amendment Flag | false |
Document Period End Date | 2009-12-31 |
Entity Information
Entity Information (USD $) | |||
12 Months Ended
Dec. 31, 2009 | Feb. 22, 2010
| Jun. 30, 2009
| |
Trading Symbol | DUK | ||
Entity Registrant Name | DUKE ENERGY CORP | ||
Entity Central Index Key | 0001326160 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 1,309,314,484 | ||
Entity Public Float | $18,836,000,000 |