DUKE ENERGY CORPORATION News Release
Media Contact: Jennifer Garber
24-Hour: 800.559.3853
Analyst Contact: Jack Sullivan
Office: 980.373.3564
Feb. 10, 2022
Duke Energy reports fourth-quarter and full-year 2021 financial results
- 2021 reported EPS of $4.94 and adjusted EPS of $5.24, closing year above the midpoint of updated guidance range
- Strong results driven by constructive rate case outcomes and continued customer growth in electric and gas segments
- Five-yearcapital plan increases to $63 billion with over 80% funding investments in the grid and clean energy transition
- Established 2022 adjusted EPS guidance range of $5.30 to $5.60, and extended long-term adjusted EPS growth rate of 5% to 7% through 2026, off 2021 original midpoint of $5.15
CHARLOTTE, N.C. - Duke Energy (NYSE: DUK) today announced 2021 full-year reported EPS of $4.94, prepared in accordance with Generally Accepted Accounting Principles (GAAP), and adjusted EPS of $5.24. This is compared to reported and adjusted EPS of $1.72 and $5.12, respectively, for the full-year 2020.
Adjusted EPS excludes the impact of certain items that are included in reported EPS. The difference between full-year 2021 reported and adjusted EPS was primarily due to an impairment charge related to the South Carolina Supreme Court decision on coal ash and insurance proceeds, as well as workplace and workforce realignment costs.
Higher full-year 2021 adjusted results were primarily driven by rate case contributions and higher volumes in the Electric Utilities Infrastructure segment, complemented by growth and rate case contributions in the Gas Utilities and Infrastructure segment. These items were partially offset by higher O&M, the loss of ACP earnings, Texas Storm Uri, fewer Commercial Renewable projects placed in service and share dilution.
"The fourth quarter capped a strong finish to an exceptionally productive 2021, where we made great progress against our strategic and financial goals," said Lynn Good, Duke Energy chair, president and chief executive officer.
"We're leading the industry's largest clean energy transformation with more than 80% of our $63 billion capital plan funding investments in grid modernization and zero or lower-carbon emitting generation. These investments position us to earn solidly within our 5% to 7% EPS growth range throughout our five-year plan."
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"We also remain focused on ensuring reliable and affordable energy during this transition - delivering value to customers and shareholders in the years ahead."
Quarterly results
Duke Energy's fourth quarter 2021 reported EPS was $0.93, compared to reported loss per share of $0.12 for the fourth quarter of 2020. Duke Energy's fourth quarter 2021 adjusted EPS was $0.94, compared to $1.03 for the fourth quarter of 2020. Lower adjusted results for the quarter compared to last year were driven by mild weather, fewer renewable projects placed in service and share dilution, partially offset by lower income tax expense.
In addition to the following summary of fourth quarter 2021 business segment performance, comprehensive tables with detailed EPS drivers for the fourth quarter and full-year 2021 compared to prior year are provided at the end of this news release.
The discussion below of fourth-quarter results includes both GAAP segment income and adjusted segment income, which is a non-GAAP financial measure. The tables at the end of this news release present a full reconciliation of GAAP reported results to adjusted results.
Electric Utilities and Infrastructure
On a reported basis, Electric Utilities and Infrastructure recognized fourth quarter 2021 segment income of $670 million, compared to segment loss of $170 million in the fourth quarter of 2020. Fourth quarter 2020 reported earnings included impacts of the coal ash settlement in North Carolina for Duke Energy Carolinas and Duke Energy Progress.
On an adjusted basis, Electric Utilities and Infrastructure recognized fourth quarter 2021 and fourth quarter 2020 segment income of $675 million. Flat quarterly results, excluding share dilution of $0.03, were primarily driven by lower income tax expense (+$0.06 per share) and lower depreciation and amortization (+$0.03 per share), partially offset by mild weather (-$0.08 per share).
Gas Utilities and Infrastructure
On a reported basis, Gas Utilities and Infrastructure recognized fourth quarter 2021 segment income of $137 million, compared to $134 million in the fourth quarter of 2020. In addition to the 2021 drivers outlined below, fourth quarter 2020 results included costs related to the cancellation of ACP.
On an adjusted basis, Gas Utilities and Infrastructure recognized fourth quarter 2021 segment income of $137 million, compared to $150 million in the fourth quarter of 2020, a decrease of $0.02 per share, excluding share dilution of $0.02. Lower quarterly results were driven by higher O&M (-$0.02 per share) and higher depreciation and amortization (-$0.02 per share), offset by rate case contributions (+$0.03 per share).
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Commercial Renewables
On a reported and adjusted basis, Commercial Renewables recognized fourth quarter 2021 segment income of $49 million, compared to $79 million in the fourth quarter of 2020. This represents a decrease of $0.04 per share, excluding share dilution of $0.01. Lower quarterly results were primarily driven by fewer renewable projects placed in service.
Other
Other primarily includes interest expense on holding company debt, other unallocated corporate costs and results from Duke Energy's captive insurance company.
On a reported basis, Other recognized a fourth quarter 2021 net loss of $131 million, compared to a net loss of $127 million in the fourth quarter of 2020. In addition to the drivers outlined below, fourth quarter 2021 results include workplace and workforce realignment costs.
On an adjusted basis, Other recognized a fourth quarter 2021 net loss of $125 million, compared to a net loss of $127 million in the fourth quarter of 2020, an increase of $0.01 per share, excluding share dilution. Quarterly results were primarily due to lower income tax expense, partially offset by higher contributions to the Duke Energy Foundation.
Effective tax rate
Duke Energy's consolidated reported effective tax rate for the fourth quarter of 2021 was (2.8)% compared to 50.8% in the fourth quarter of 2020. The decrease in the effective tax rate was primarily due to charges as part of the coal ash settlement in North Carolina for Duke Energy Carolinas and Duke Energy Progress in the prior year.
The effective tax rate including impacts of noncontrolling interests and preferred dividends and excluding special items for the fourth quarter of 2021 was (2.4%) compared to the effective tax rate including impacts of noncontrolling interests and preferred dividends and excluding special items of 11.1% in the fourth quarter of 2020. The decrease was primarily due to tax optimization and an increase in the amortization of excess deferred taxes.
The tables at the end of this news release present a reconciliation of the reported effective tax rate to the effective tax rate including noncontrolling interests and preferred dividends and excluding special items.
Earnings conference call for analysts
An earnings conference call for analysts is scheduled from 10 to 11 a.m. ET today to discuss fourth-quarter 2021 financial results. The conference call will be hosted by Lynn Good, chair, president and chief executive officer, and Steve Young, executive vice president and chief financial officer.
The call can be accessed via the investors section (duke-energy.com/investors) of Duke Energy's website or by dialing 800.458.4121 in the United States or 323.794.2093 outside the United States. The confirmation code is 9510910. Please call in 10 to 15 minutes prior to the scheduled start time.
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A replay of the conference call will be available until 1 p.m. ET, Feb. 20, 2022, by calling 888.203.1112 in the United States or 719.457.0820 outside the United States and using the code 9510910. An audio replay and transcript will also be available by accessing the investors section of the company's website.
Special Items and Non-GAAP Reconciliation
The following tables present a reconciliation of GAAP reported to adjusted earnings per share for fourth-quarter and full-year 2021 and 2020 financial results:
(In millions, except per share amounts) | After-Tax | 4Q 2021 | 4Q 2020 | |||
Amount | EPS | EPS | ||||
EPS, as reported | $ | 0.93 | $ | (0.12) | ||
Adjustments to reported EPS: | ||||||
Fourth Quarter 2021 | ||||||
Workplace and workforce realignment | $ | 6 | $ | 0.01 | ||
Regulatory settlements | 5 | 0.01 | ||||
Discontinued operations | (7) | (0.01) | ||||
Fourth Quarter 2020 | ||||||
Regulatory settlements | $ | 845 | 1.14 | |||
Gas pipeline investments | 16 | 0.02 | ||||
Discontinued operations | (7) | (0.01) | ||||
Total adjustments | $ | 0.01 | $ | 1.15 | ||
EPS, adjusted | $ | 0.94 | $ | 1.03 | ||
(In millions, except per share amounts) | After-Tax | Full-Year | Full-Year | |||
Amount | 2021 EPS | 2020 EPS | ||||
EPS, as reported | $ | 4.94 | $ | 1.72 | ||
Adjustments to reported EPS: | ||||||
Full-Year 2021 | ||||||
Workplace and workforce realignment | $ | 148 | $ | 0.20 | ||
Regulatory settlements | 69 | 0.09 | ||||
Gas pipeline investments | 15 | 0.02 | ||||
Discontinued operations | (7) | (0.01) | ||||
Full-Year 2020 | ||||||
Gas pipeline investments | $ | 1,711 | 2.32 | |||
Regulatory settlements | 872 | 1.19 | ||||
Severance | (75) | (0.10) | ||||
Discontinued operations | (7) | (0.01) | ||||
Total adjustments | $ | 0.30 | $ | 3.40 | ||
EPS, adjusted | $ | 5.24 | $ | 5.12 |
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Non-GAAP financial measures
Management evaluates financial performance in part based on non-GAAP financial measures, including adjusted earnings, adjusted EPS and effective tax rate including impacts of noncontrolling interests and preferred dividends and excluding special items. Adjusted earnings and adjusted EPS represent income (loss) from continuing operations available to Duke Energy Corporation common stockholders in dollar and per share amounts, adjusted for the dollar and per share impact of special items. The effective tax rate including impacts of noncontrolling interests and preferred dividends and excluding special items is calculated using pretax earnings and income tax expense, both as adjusted for the impact of noncontrolling interests, preferred dividends and special items. As discussed below, special items include certain charges and credits, which management believes are not indicative of Duke Energy's ongoing performance.
Management uses these non-GAAP financial measures for planning and forecasting, and for reporting financial results to the Board of Directors, employees, stockholders, analysts and investors. The most directly comparable GAAP measures for adjusted earnings, adjusted EPS and effective tax rate including impacts of noncontrolling interests and preferred dividends and excluding special items are Net Income (Loss) Available to Duke Energy Corporation common stockholders (GAAP reported earnings (loss)), Basic earnings (loss) per share Available to Duke Energy Corporation common stockholders (GAAP reported earnings (loss) per share), and the reported effective tax rate, respectively.
Special items included in the periods presented include the following items, which management believes do not reflect ongoing costs:
- Workplace and workforce realignment represents costs attributable to business transformation, including long-term real estate strategy changes and workforce realignment.
- Regulatory settlements represents an impairment charge related to the South Carolina Supreme Court decision on coal ash, insurance proceeds and Duke Energy Carolinas and Duke Energy Progress coal ash settlement and the partial settlements in the 2019 North Carolina rate cases.
- Gas pipeline investments represents costs related to the cancellation of the ACP investment and additional exit obligations.
- Severance represents the reversal of 2018 Severance charges, which were deferred as a result of a partial settlement in the Duke Energy Carolinas and Duke Energy Progress 2019 North Carolina rate cases.
Due to the forward-looking nature of any forecasted adjusted earnings guidance, information to reconcile this non-GAAP financial measure to the most directly comparable GAAP financial measure is not available at this time, as management is unable to project all special items for future periods (such as legal settlements, the impact of regulatory orders or asset impairments).
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Duke Energy Corporation published this content on 10 February 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 February 2022 11:50:04 UTC.
