Duke Energy 2012 Annual Report Download - page 227

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PART II
DUKE ENERGY CORPORATION • DUKE ENERGY CAROLINAS, LLC • PROGRESS ENERGY, INC. • CAROLINA POWER & LIGHT COMPANY d/b/a PROGRESS
ENERGY CAROLINAS, INC. • FLORIDA POWER CORPORATION d/b/a PROGRESS ENERY FLORIDA, INC. • DUKE ENERGY OHIO, INC. • DUKE ENERGY INDIANA, INC.
Combined Notes to Consolidated Financial Statements – (Continued)
The following table shows preferred stock outstanding at December 31, 2012 and 2011.
(in millions, except share and per share data)
Shares
Authorized
Shares
Outstanding
Redemption
Price Total
Progress Energy Carolinas
Cumulative, no par value $5 Preferred Stock 300,000 236,997 $110.00 $ 24
Cumulative, no par value Serial Preferred Stock 20,000,000
$4.20 Serial Preferred 100,000 102.00 10
$5.44 Serial Preferred 249,850 101.00 25
Cumulative, no par value Preferred Stock A 5,000,000 — — —
No par value Preference Stock 10,000,000 — — —
Total Progress Energy Carolinas 59
Progress Energy Florida
Cumulative, $100 par value Preferred Stock 4,000,000
4.00% Preferred 39,980 104.25 4
4.40% Preferred 75,000 102.00 8
4.58% Preferred 99,990 101.00 10
4.60% Preferred 39,997 103.25 4
4.75% Preferred 80,000 102.00 8
Cumulative, no par value Preferred Stock 5,000,000 — — —
$100 par value Preference Stock 1,000,000 — — —
Total Progress Energy Florida 34
Total preferred stock of subsidiaries $93
21. SEVERANCE
2011 Severance Plan.
In conjunction with the merger with Progress Energy, in November 2011
Duke Energy and Progress Energy offered a voluntary severance plan to certain
eligible employees. As this was a voluntary severance plan, all severance
benefi ts offered under this plan are considered special termination benefi ts
under U.S. GAAP. Special termination benefi ts are measured upon employee
acceptance and recorded immediately absent any signifi cant retention period. If
a signifi cant retention period exists, the cost of the special termination benefi ts
are recorded ratably over the retention period. Approximately 1,100 employees
from Duke Energy and Progress Energy requested severance during the
voluntary window, which closed on November 30, 2011. The estimated amount
of severance payments associated with this voluntary plan and other severance
benefi ts through 2014, excluding amounts incurred through December 31, 2012,
are expected to range from $30 million to $60 million and most of the costs will
be charged to Duke Energy Carolinas, Progress Energy Carolinas and Progress
Energy Florida.
Additionally, in the third quarter of 2012, a voluntary severance plan was
offered to certain unionized employees of Duke Energy Ohio. Approximately
75 employees accepted the termination benefi ts during the voluntary window,
which closed on October 8, 2012. The expense associated with this plan was
not material.
In conjunction with the retirement of the Crystal River Nuclear Plant
Unit 3, severance benefi ts will be made available to certain eligible impacted
unionized and non-unionized employees, to the extent that those employees do
not fi nd job opportunities at other locations. Approximately 600 employees work
at Crystal River Nuclear Plant Unit 3. Duke Energy is currently determining which
employees will be impacted by the retirement and therefore offered severance
benefi ts. Future severance expense Duke Energy expects to incur at Progress
Energy Florida is currently not estimable as total number of employees impacted
and job classifi cations and functions have not yet been determined.
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 benefi ts. As this was a voluntary plan, all severance
benefi ts offered under this plan were also considered special termination
benefi ts under U.S. GAAP and accorded the same accounting treatment as
discussed above. Approximately 900 employees accepted the termination
benefi ts during the voluntary window, which closed March 31, 2010.
Amounts included in the table below represent direct and allocated
severance and related expense recorded by the Duke Energy Registrants, and
are recorded in Operation, maintenance, and other within Operating Expenses
on the Consolidated Statements of Operations. The Duke Energy Registrants
recorded insignifi cant amounts for severance expense during 2011 for past and
ongoing severance plans.
Years Ended December 31,
(in millions) 2012 2010
Duke Energy(a) $201 $172
Duke Energy Carolinas 63 99
Progress Energy(b) 82 —
Progress Energy Carolinas(b) 55 —
Progress Energy Florida(b) 27 —
Duke Energy Ohio 21 24
Duke Energy Indiana 18 33
(a) Includes $14 million of accelerated stock award expense and $19 million of COBRA and healthcare
reimbursement expenses for 2012.
(b) The Progress Energy Registrants amounts for severance expense during 2010 are not material.