Duke Energy 2011 Annual Report Download - page 69

PART II
Operating Expenses.
The increase was driven primarily by:
• A $77 million increase in Central America due to higher fuel
costs and consumption as a result of increased dispatch;
• A $56 million increase in Peru as a result of higher fuel costs
and consumption as a result of increased dispatch, purchased
power and hydrocarbon royalty costs; and
• A $25 million increase in Brazil as a result of unfavorable
exchange rates, higher purchased power and a provision for a
revenue tax audit.
Partially offsetting these increases was:
• A $27 million decrease in Ecuador due to lower fuel
consumption as a result of lower dispatch, and lower
maintenance costs.
Other Income and Expenses, net.
The increase was primarily driven by a $44 million increase in
equity earnings from NMC due to higher average prices partially offset
by higher butane costs, and a $20 million arbitration award in Peru.
EBIT.
As discussed above, the increase was primarily due to favorable
contract prices and exchange rates in Brazil, arbitration award and
higher margins in Peru, favorable hydrology in Central America, and
higher equity earnings at NMC.
Year Ended December 31, 2010 as Compared to December 31,
2009
Operating Revenues.
The increase was driven primarily by:
• A $105 million increase in Brazil due to favorable exchange
rates, higher average contract prices, and favorable hydrology.
Partially offsetting this increase was:
• A $54 million decrease in Central America due to lower
dispatch as a result of unfavorable hydrology, partially offset by
higher average prices.
Operating Expenses.
The decrease was driven primarily by:
• A $27 million decrease in Central America due to lower fuel
consumption as a result of lower dispatch; and
• A $13 million decrease in general and administrative due to
lower legal, development, and labor costs.
Partially offsetting these decreases was:
• A $9 million increase in Peru due to higher hydrocarbon
royalty costs.
Other Income and Expenses, net.
The increase was driven by a $24 million increase due to the
absence of 2009 losses from its investment in Attiki and a $23
million increase in equity earnings from NMC due to higher average
prices and methyl tertiary butyl ether (MTBE) volumes, partially offset
by higher butane costs.
EBIT.
The increase in EBIT was primarily due to favorable results in
Brazil, the absence of a provision recorded in 2009 related to
transmission fees in Brazil, 2009 equity losses associated with Attiki,
higher equity earnings from NMC, and lower general and administrative
costs, partially offset by lower results in Central America.
Other
Years Ended December 31,
(in millions) 2011 2010
Variance
2011 vs.
2010 2009
Variance
2010 vs.
2009
Operating revenues $44 $ 118 $ (74) $ 128 $ (10)
Operating expenses 354 656 (302) 389 267
(Losses) gains on sales of other assets and other, net (8) 145 (153) 4 141
Operating loss (318) (393) 75 (257) (136)
Other income and expenses, net 42 129 (87) 2 127
Benefit attributable to noncontrolling interest (15) (9) (6) (4) (5)
EBIT $(261) $(255) $ (6) $(251) $ (4)
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