Duke Energy 2011 Annual Report Download - page 204

PART II
DUKE ENERGY CORPORATION •DUKE ENERGY CAROLINAS, LLC •DUKE ENERGY OHIO, INC. •DUKE ENERGY INDIANA, INC.
Combined Notes to Consolidated Financial Statements – (Continued)
The following table illustrates Duke Energy’s 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 December 31, 2011, 2010,
and 2009.
(in millions, except per share amounts) Income
Average
Shares EPS
2011
Income from continuing operations attributable to Duke Energy common shareholders, as adjusted for participating
securities — basic $1,702 1,332 $1.28
Effect of dilutive securities:
Stock options, performance and restricted stock 1
Income from continuing operations attributable to Duke Energy common shareholders, as adjusted for participating
securities — diluted $1,702 1,333 $1.28
2010
Income from continuing operations attributable to Duke Energy common shareholders, as adjusted for participating
securities — basic $1,315 1,318 $1.00
Effect of dilutive securities:
Stock options, performance and restricted stock 1
Income from continuing operations attributable to Duke Energy common shareholders, as adjusted for participating
securities — diluted $1,315 1,319 $1.00
2009
Income from continuing operations attributable to Duke Energy common shareholders, as adjusted for participating
securities — basic $1,061 1,293 $0.82
Effect of dilutive securities:
Stock options, performance and restricted stock 1
Income from continuing operations attributable to Duke Energy common shareholders, as adjusted for participating
securities — diluted $1,061 1,294 $0.82
As of December 31, 2011, 2010 and 2009, 7 million,
13 million and 20 million, respectively, of stock options, unvested
stock and performance awards were not included in the “effect of
dilutive securities” in the above table because either the option
exercise prices were greater than the average market price of the
common shares during those periods, or performance measures
related to the awards had not yet been met.
Beginning in the fourth quarter of 2008, Duke Energy began
issuing authorized but previously unissued shares of common stock
to fulfill obligations under its Dividend Reinvestment Plan (DRIP) and
other internal plans, including 401(k) plans. During the years ended
December 31, 2010 and 2009, Duke Energy received proceeds of
$288 million and $494 million, respectively, from the sale of
common stock associated with these plans. Proceeds from the sale of
common stock associated with these plans were not significant in
2011. Duke Energy has discontinued issuing new shares of common
stock under the DRIP.
19. SEVERANCE
2011 Severance Plans.
In conjunction with the proposed merger with Progress Energy, in
August 2011, Duke Energy announced plans to offer a voluntary
severance plan to approximately 4,850 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. Approximately 500 employees accepted the
termination benefits during the voluntary window period, which closed
on November 30, 2011. Duke Energy reserves the right to reject any
request to volunteer based on business needs and/or excessive
participation. The estimated amount of severance payments associated
with this voluntary plan, contingent upon a successful close of the
proposed merger with Progress Energy, are expected to be
approximately $80 million.
2010 Severance Plans.
During 2010, the majority of severance charges were related to
a voluntary severance plan whereby eligible employees were provided
a window during which to accept termination benefits. As this was a
voluntary plan, all severance benefits offered under this plan were
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. Approximately 900 employees accepted the
termination benefits during the voluntary window period, which
closed March 31, 2010. Future severance costs under Duke
Energy’s ongoing severance plan, if any, are currently not estimable.
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