Duke Energy 2014 Annual Report Download - page 52

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PART II
Year Ended December 31, 2012
(in millions, except per share amounts)
Regulated
Utilities
International
Energy
Commercial
Power
Total
Reportable
Segments Other
Eliminations/
Discontinued
Operations
Duke
Energy
Per
Diluted
Share
Adjusted segment income/Adjusted earnings $2,086 $ 439 $ 93 $2,618 $ (129) $ — $2,489 $ 4.33
Edwardsport impairment and other charges (402) — — (402) — — (402) (0.70)
Costs to achieve Progress Energy merger — — — — (397) — (397) (0.70)
Midwest generation operations — — (149) (149) 9 140 — —
Economic hedges (mark-to-market) — — (3) (3) — — (3) (0.01)
Democratic National Convention
Host Committee support — — — — (6) — (6) (0.01)
Employee severance and offi ce consolidation 60
—— 60 — — 60 0.11
Discontinued operations — — — — — 27 27 0.05
Segment income (loss)/Net Income
Attributable to Duke Energy Corporation $1,744 $ 439 $ (59) $2,124 $ (523) $ 167 $1,768 $ 3.07
The variance in adjusted earnings for the year ended December 31, 2014,
compared to 2013, was primarily due to:
• Increased retail pricing and riders primarily resulting from the
implementation of revised rates in most jurisdictions;
• Favorable weather in 2014 compared to 2013;
• Higher PJM capacity revenues for the nonregulated Midwest generation
business due to higher prices; and
• Higher results of the renewables business due to higher production from
the wind and solar portfolios, lower costs and additional renewables
investments.
Partially offset by:
• Higher depreciation and amortization expense primarily due to higher
depreciable asset base and lower reductions to cost of removal
reserves;
• Higher operations and maintenance expense due to higher storm costs,
the timing of fossil plant outages and the impact of nuclear outage cost
levelization;
• Lower post in-service debt returns due to projects added to customer
rates; and
• Higher property and other non-income taxes.
The variance in adjusted earnings for the year ended December 31, 2013,
compared to 2012, was primarily due to:
• The inclusion of Progress Energy results for the fi rst six months of 2013;
• Increased retail pricing and riders resulting primarily from the
implementation of revised rates in all jurisdictions; and
• Lower operating and maintenance expense resulting primarily from
the adoption of nuclear outage cost levelization in the Carolinas, lower
benefi t costs and merger synergies.
Partially offsetting these increases was:
• Higher depreciation and amortization expense;
• Lower AFUDC;
• Lower nonregulated Midwest gas generation results; and
• Incremental shares issued to complete the Progress Energy merger
(impacts per diluted share amounts only).
SEGMENT RESULTS
The remaining information presented in this discussion of results of
operations is on a GAAP basis.