Duke Energy 2014 Annual Report Download - page 204

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PART II
DUKE ENERGY CORPORATION • DUKE ENERGY CAROLINAS, LLC • PROGRESS ENERGY, INC. •
DUKE ENERGY PROGRESS, INC. • DUKE ENERGY FLORIDA, INC. • DUKE ENERGY OHIO, INC. • DUKE ENERGY INDIANA, INC.
Combined Notes to Consolidated Financial Statements – (Continued)
Years Ended December 31,
(in millions, except per share amounts) 2014 2013 2012
Income from continuing operations attributable to Duke Energy common shareholders excluding impact of participating securities $2,446 $2,565 $1,588
Weighted-average shares outstanding – basic 707 706 574
Stock options, performance and restricted shares ——1
Weighted-average shares outstanding – diluted 707 706 575
Earnings per share from continuing operations attributable to Duke Energy common shareholders
Basic $ 3.46 3.64 2.77
Diluted $ 3.46 3.63 2.77
Potentially dilutive items excluded from the calculation(a) 221
Dividends declared per common share $ 3.15 3.09 3.03
(a) Stock options and performance and unvested stock awards were not included in the dilutive securities calculation 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.
19. SEVERANCE
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. Approximately 1,100 employees from Duke Energy and
Progress Energy requested severance during the voluntary window, which closed
on November 30, 2011. 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. Most plan participants have
separated from the company as of December 31, 2014. The amount of severance
expense associated with this voluntary plan, and other severance expense for
involuntary terminations related to the merger, was not material for the year
ended December 31, 2014.
Amounts included in the table below represent direct and allocated
severance and related expense recorded by the Duke Energy Registrants, and
are in Operation, maintenance and other within Operating Expenses on the
Consolidated Statements of Operations.
Year Ended December 31,
(in millions) 2013 2012
Duke Energy(a) $ 34 $ 201
Duke Energy Carolinas 8 63
Progress Energy 19 82
Duke Energy Progress 14 55
Duke Energy Florida 5 27
Duke Energy Ohio 2 21
Duke Energy Indiana 2 18
(a) Includes $5 million and $14 million of accelerated stock award expense and $2 million and $19 million of
COBRA and health care reimbursement expenses for 2013 and 2012, respectively.
In conjunction with the retirement of Crystal River Unit 3, severance
benefi ts have been 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 worked at Crystal
River Unit 3. For the year ended December 31, 2013, Duke Energy Florida
deferred $26 million of severance costs as a regulatory asset. Duke Energy
Florida did not defer severance costs as a regulatory asset for the year ended
December 31, 2014. Severance costs expected to be accrued over the remaining
retention period for employees identifi ed to have a signifi cant retention period
is not material. However, these employees maintain the ability to accept job
opportunities at other Duke Energy locations, which would result in severance
not being paid. If a signifi cant amount of these individuals redeploy within
Duke Energy, the fi nal severance benefi ts paid under the plan may be less than
what has been accrued to date. Refer to Note 4 for further discussion regarding
Crystal River Unit 3.
During 2014, in conjunction with the disposition of the nonregulated
Midwest Generation business, severance benefi ts have been made available to
certain eligible non-unionized employees, to the extent those employees do not
fi nd other job opportunities. Approximately 50 employees are expected to receive
benefi ts. Duke Energy Ohio recorded severance expense of $6 million and
included in (Loss) Income from Discontinued Operations, net of tax in the Duke
Energy Statements of Operations and Comprehensive Income for the year ended
December 31, 2014. For further information related to the Midwest Generation
Exit, see Note 2, “Acquisitions, Dispositions and Sales of Other Assets.”
Amounts included in the table below represent the severance liability
for past and ongoing severance plans. Amounts for Subsidiary Registrants do
not include allocated expense or associated cash payments. Amounts for Duke
Energy Indiana are not material.
(in millions)
Balance at
December 31,
2013
Provision /
Adjustments
Cash
Reductions
Balance at
December 31,
2014
Duke Energy $ 64 $ 5 $ (41) $28
Duke Energy Carolinas 5 2 (5) 2
Progress Energy 44 (10) (16) 18
Duke Energy Progress 11 — (10) 1
Duke Energy Florida 24 (1) (6) 17
Duke Energy Ohio 2 5 (1) 6
As part of Duke Energy Carolinas’ 2011 rate case, the NCUC approved
the recovery of $101 million of previously recorded expenses related to a prior
year Voluntary Opportunity Plan. This amount was recorded as a reduction
to Operation, maintenance, and other within Operating Expenses on the
Consolidated Statements of Operations and recognized as a Regulatory asset on
the Consolidated Balance Sheets in 2012.