Duke Energy's cost-control efforts and strong operational performance in 2009 resulted in full-year adjusted diluted earnings per share of $1.22, exceeding the employee incentive target of $1.20. Adjusted diluted EPS in 2008 was $1.21. Full-year reported diluted EPS was $0.83 for 2009, compared to $1.07 in 2008.
Fourth quarter 2009 adjusted diluted EPS was 28 cents, compared to 27 cents for fourth quarter 2008. Reported diluted EPS was 26 cents for both the fourth quarter 2009 and the fourth quarter 2008.
The company was able to achieve this performance in part by exceeding its target of reducing operations and maintenance costs by $150 million in 2009, while also exceeding prior-year operational performance for its generation fleet.
Industrial sales volumes adversely affected earnings during 2009, declining by approximately 14 percent year-over-year, on a weather-normalized basis. Fourth quarter 2009 industrial sales declined less than 5 percent, a pace of decline that was slower than earlier in 2009 as the economy showed signs of continued stabilization.
"Our performance in 2009 was very solid. Despite year-over-year declines in retail sales volumes, we exceeded our employee incentive target by controlling our costs and managing our operations exceptionally well," said James E. Rogers, chairman, president and chief executive officer. "Although the economy has been challenging, the second half of 2009 showed signs of stabilization."
Mark-to-market impacts of economic hedges in the Commercial Power segment and special items affecting Duke Energy's adjusted diluted EPS for the quarters include:
4Q2009 4Q2008
Pre-Tax Tax EPS EPS
(In millions, except per-share amounts) Amount Effect Impact Impact
Fourth-quarter 2009
-- Costs to Achieve, Cinergy Merger $(2) $1 -- --
-- Impairments $(18) $6 -- --
-- Mark-to-market impact of economic hedges $(32) $12 $(0.02) --
Fourth-quarter 2008
-- Costs to Achieve, Cinergy Merger $(10) $4 -- --
-- Mark-to-market impact of economic hedges $(110) $40 -- $(0.06)
Total diluted EPS impact $(0.02) $(0.06)
Reconciliation of reported to adjusted diluted EPS for the quarters:
4Q2009 4Q2008
EPS EPS
Diluted EPS from continuing operations, as reported $0.26 $0.21
Diluted EPS from discontinued operations, as reported -- --
Diluted EPS from extraordinary items, as reported -- $0.05
Diluted EPS, as reported $0.26 $0.26
Adjustments to reported EPS:
-- Diluted EPS from discontinued operations -- --
-- Diluted EPS from extraordinary items -- $(0.05)
-- Diluted EPS impact of special items and mark-to-
market in Commercial Power $0.02 $0.06
Diluted EPS, adjusted $0.28 $0.27
Reconciliation of reported to adjusted diluted EPS for the annual periods:
2009 2008
EPS EPS
Diluted EPS from continuing operations, as reported $0.82 $1.01
Diluted EPS from discontinued operations, as reported $0.01 $0.01
Diluted EPS from extraordinary items, as reported -- $0.05
Diluted EPS, as reported $0.83 $1.07
Adjustments to reported EPS:
-- Diluted EPS from discontinued operations $(0.01) $(0.01)
-- Diluted EPS from extraordinary items -- $(0.05)
-- Diluted EPS impact of special items and mark-to-
market in Commercial Power $0.40 $0.20
Diluted EPS, adjusted $1.22 $1.21