Duke Energy 2015 Annual Report Download - page 203

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PART II
DUKE ENERGY CORPORATION • DUKE ENERGY CAROLINAS, LLC • PROGRESS ENERGY, INC. •
DUKE ENERGY PROGRESS, LLC. • DUKE ENERGY FLORIDA, LLC. • DUKE ENERGY OHIO, INC. • DUKE ENERGY INDIANA, INC.
Combined Notes to Consolidated Financial Statements – (Continued)
The table below presents the severance liability for past and ongoing severance plans including the plans described above. Amounts for Duke Energy Indiana
and Duke Energy Ohio are not material.
(in millions)
Duke
Energy
Duke
Energy
Carolinas
Progress
Energy
Duke
Energy
Progress
Duke
Energy
Florida
Balance at December 31, 2014 $ 28 $ 2 $ 18 $ 1 $ 17
Provision/Adjustments 144 80 20 20 —
Cash Reductions (36) (4) (15) (2) (13)
Balance at December 31, 2015 $ 136 $ 78 $ 23 $ 19 $ 4
20. STOCK-BASED COMPENSATION
The Duke Energy Corporation 2015 Long-Term Incentive Plan (the
2015 Plan) provides for the grant of stock-based compensation awards to
employees and outside directors. The 2015 Plan reserves 10 million shares of
common stock for issuance. Duke Energy has historically issued new shares
upon exercising or vesting of share-based awards. However, Duke Energy may
use a combination of new share issuances and open market repurchases for
share-based awards that are exercised or vest in the future. Duke Energy has
not determined with certainty the amount of such new share issuances or open
market repurchases.
The 2015 Plan supersedes the 2010 Long-Term Incentive Plan, as
amended (the 2010 Plan), and the Progress Energy, Inc. 2007 Equity Incentive
Plan (the Progress Plan). No additional grants will be made from the 2010 Plan
and Progress Plan.
The following table summarizes the total expense recognized by the Duke
Energy Registrants, net of tax, for stock-based compensation.
Years Ended December 31,
(in millions) 2015 2014 2013
Duke Energy $ 38 $ 38 $ 52
Duke Energy Carolinas 14 12 13
Progress Energy 14 14 23
Duke Energy Progress 99 14
Duke Energy Florida 55 9
Duke Energy Ohio 25 4
Duke Energy Indiana 43 4
Duke Energy’s pretax stock-based compensation costs, the tax benefit
associated with stock-based compensation expense, and stock-based
compensation costs capitalized are included in the following table.
Years Ended December 31,
(in millions) 2015 2014 2013
Restricted stock unit awards $ 38 $ 39 $ 49
Performance awards 23 22 34
Stock options —— 2
Pretax stock-based compensation cost $ 61 $ 61 $ 85
Tax benefit associated with stock-based
compensation expense $ 23 $ 23 $ 33
Stock-based compensation costs capitalized 34 3
STOCK OPTIONS
Stock options are granted with a maximum option term of 10 years and
with an exercise price not less than the market price of Duke Energy’s common
stock on the grant date. Stock options outstanding at December 31, 2015, were
not exercisable and the aggregate intrinsic value was not material. The following
table summarizes information about stock options outstanding.
Stock Options
(in thousands)
Weighted
Average
Exercise
Price (per
share)
Weighted
Average
Remaining
Life
Outstanding at December 31, 2014 373 $ 64
Exercised (270) 62
Outstanding at December 31, 2015(a) 103 69
7 years,
2 months
(a) Outstanding stock options all vested on January 1, 2016.
The following table summarizes additional information related to stock
options exercised and granted.
Years Ended December 31,
2015 2014 2013
Intrinsic value of options exercised (in millions) $ 5 $ 6 $ 26
Tax benefit related to options exercised (in millions) 22 10
Cash received from options exercised (in millions) 17 25 9
Stock options granted (in thousands)(a) —— 310
(a) Stock options granted in 2013 were expensed immediately.
RESTRICTED STOCK UNIT AWARDS
Restricted stock unit awards generally vest over periods from immediate
to three years. Fair value amounts are based on the market price of Duke
Energy’s common stock on the grant date. The following table includes
information related to restricted stock unit awards.
Years Ended December 31,
2015 2014 2013
Shares awarded (in thousands) 524 557 612
Fair value (in millions) $ 41 $ 40 $ 42