Progress Energy 2010 Annual Report Download - page 17

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Progress Energy Annual Report 2010
transmission facilities) may subject us to an even higher
level of scrutiny from regulators and lead to a more uncertain
regulatory environment. Timely regulatory recovery of
costs recoverable under the Utilities’ pass-through clauses
(such as fuel and environmental compliance) is important
to maintaining appropriate levels of liquidity.
We are preparing for an energy future that includes,
among other things, carbon reductions and emerging
technologies such as smart grid and plug-in electric
vehicles. We believe that our balanced solution strategy
provides an effective, flexible framework that will prepare
us for this new energy future.
RESULTS OF OPERATIONS
In this section, we provide analysis and discussion of
earnings and the factors affecting earnings on both a
GAAP and non-GAAP basis. We introduce our results
of operations in an overview section followed by a more
detailed analysis and discussion by business segment.
We compute our non-GAAP financial measurement
“Ongoing Earnings” as GAAP net income attributable
to controlling interests after excluding discontinued
operations and the effects of certain identified gains
and charges, which are considered Ongoing Earnings
adjustments. Some of the excluded gains and charges
have occurred in more than one reporting period but
are not considered representative of fundamental core
earnings. Ongoing Earnings is not a measure calculated
in accordance with GAAP, and should be viewed as a
supplement to, and not a substitute for, our results of
operations presented in accordance with GAAP.
A reconciliation of Ongoing Earnings to GAAP net income
attributable to controlling interests follows:
(in millions except per share data) PEC PEF Corporate and Other Total Per Share
Year ended December 31, 2010
Ongoing Earnings $618 $462 $(191) $889 $3.06
Impairment, net of tax(a) (5) (1) – (6) (0.02)
Plant retirement charge, net of tax(a) (1) – – (1) –
Change in the tax treatment of the Medicare
Part D subsidy (12) (10) – (22) (0.08)
Discontinued operations attributable to
controlling interests, net of tax – – (4) (4) (0.01)
Net income (loss) attributable to controlling
interests(b) $600 $451 $(195) $856 $2.95
Year ended December 31, 2009
Ongoing Earnings $540 $460 $(154) $846 $3.03
CVO mark-to-market – – 19 19 0.07
Impairment, net of tax(a) – – (2) (2) (0.01)
Plant retirement charge, net of tax(a) (17) – – (17) (0.06)
Cumulative prior period adjustment related to
certain employee life insurance benefits, net
of tax(a) (10) – – (10) (0.04)
Discontinued operations attributable to
controlling interests, net of tax – – (79) (79) (0.28)
Net income (loss) attributable to controlling
interests(b) $513 $460 $(216) $757 $2.71
Year ended December 31, 2008
Ongoing Earnings $531 $383 $(138) $776 $2.96
Valuation allowance and related net operating
loss carry forward – – (3) (3) (0.01)
Discontinued operations attributable to
controlling interests, net of tax – – 57 57 0.22
Net income (loss) attributable to controlling
interests(b) $531 $383 $(84) $830 $3.17
(a) Calculated using assumed tax rate of 40 percent.
(b) Net income attributable to controlling interests is shown net of preferred stock dividend requirement of $3 million and $2 million at PEC and
PEF, respectively.