Non-GAAP Financial Measures - 2003 Annual Report - Duke Energy
Duke Energy

Non-GAAP Financial Measures

(Loss) earnings before interest and taxes from continuing operations and ongoing (loss) earnings per share are non-GAAP (generally accepted accounting principles) financial measures as defined by the Securities and Exchange Commission under Regulation G.

(Loss) earnings before interest and taxes from continuing operations is one of the measures used by management to assess consolidated performance for continuing operations. It represents the combination of operating (loss) income, and other income and expenses as presented on the Consolidated Statements of Operations, and it excludes results and impacts of discontinued operations. Additionally, management believes its investors use (loss) earnings before interest and taxes from continuing operations as a supplemental measure to evaluate the company’s consolidated results from continuing operations.

The company’s management uses ongoing (loss) earnings per share, which represents net income adjusted for special items, as one of the measures to evaluate operations of the company. Special items represent certain charges or gains which management believes are not representative of the ongoing operations of the company. Management believes that the presentation and use of ongoing (loss) earnings per share provide useful information to investors, allowing them to more accurately compare the company’s ongoing performance across all periods presented.

The following is a reconciliation of ongoing (loss) earnings per share to GAAP reported basic (loss) earnings per share for 2003 and 2002:

2003 Pre-tax Amount   Tax Effect   Full-year EPS
Earnings per share, ongoing

 

  

 

  

$1.28
 

 

  

 

  

 
DENA plant impairments and DETM charges

$(2,826)

  

$1,046

  

(1.97)
DENA redesignation of hedging contracts to
   mark-to-market

(262)

  

97

  

(0.18)
Charges and impairments for Australia and Europe

(292)

  

69

  

(0.25)
Cumulative effect of accounting changes

(256)

  

94

  

(0.18)
DENA goodwill write-off

(254)

  

90

  

(0.18)
Severance and related charges

(153)

  

55

  

(0.11)
Net gain on asset sales

185

  

(66)

  

0.13
DEI reserve and charges for environmental settlements
   in Brazil

(26)

  

10

  

(0.02)
Write-off of risk management system

(51)

  

19

  

(0.04)
Settlement with the South Carolina Public Service
   Commission

(46)

  

18

  

(0.03)
Settlement with the Commodity Futures Trading
   Commission

(17)

  

—

  

(0.02)
Tax benefit on 2002 impairment of goodwill at DEI for
   European gas trading

—

  

52

  

0.06
Tax adjustments

—

  

23

  

0.03
 

 

  

 

  

(2.76)

Earnings per share, as reported

 

  

 

  

$(1.48)
 
 
 
2002 Pre-tax Amount   Tax Effect   Full-year EPS
Earnings per share, ongoing

 

  

 

  

$1.88
 

 

  

 

  

 
Impairment of goodwill at DEI for European gas trading

$(194)

  

$ —

  

(0.22)
Expenses at Franchised Electric associated with December
   2002 ice storm

(89)

  

35

  

(0.06)
Severance charges associated with workforce reduction

(103)

  

40

  

(0.08)
Partial impairment of a merchant plant as a result of
   current market outlook

(31)

  

9

  

(0.04)
Asset impairments at Field Services

(28)

  

10

  

(0.02)
Termination of certain turbines on order, plus write-down
   of other uninstalled turbines

(163)

  

59

  

(0.13)
Write-off of site development costs, primarily in
   California and Brazil

(80)

  

30

  

(0.06)
Information technology system write-off at DENA

(24)

  

9

  

(0.02)
Demobilization costs at DENA

(22)

  

8

  

(0.02)
Settlement with North Carolina Utility Commission and
   Public Service Commission of South Carolina

(19)

  

7

  

(0.01)
 

 

  

 

  

(0.66)

Earnings per share, as reported

 

  

 

  

$1.22