Duke Energy Corporation (holding Company) · NYSE:DUK
Duke Energy Corporation (holding Company) — Q1 2019 Earnings Presentation
38 slides from Duke Energy Corporation (holding Company)'s earnings presentation, May 9, 2019
Slide 1: Duke Energy Earnings Review & Business Update
May 9, 2019 FIRST QUARTER 2019 Duke Energy Earnings Review & Business Update Lynn Good Chairman, President & CEO Steve Young Executive Vice President & CFO
Slide 2: Safe Harbor statement
Safe Harbor statement This presentation includes forward-looking statements within the meaning of the federal securities laws. Actual results could differ materially from such forward- looking statements. The factors that could cause actual results to differ are discussed in the Appendix herein and
Slide 3: Topics for today's call
Topics for today’s call BUSINESS UPDATE Lynn Good, Chairman, President & CEO ▪ First quarter 2019 update ▪ Carolinas legislative and regulatory update ▪ Progress on strategic initiatives ▪ North Carolina coal ash order FINANCIAL UPDATE Steve Young, Executive VP & CFO ▪ First quarter 2019 earnings dr
Slide 4: First quarter 2019 update
First quarter 2019 update QUARTER HIGHLIGHTS $1.24 ▪ North Carolina legislation introduced that would 1Q 2019 REPORTED/ADJUSTED DILUTED EPS COMPARED TO $0.88/$1.28 IN 1Q 2018 enable alternative rate-making frameworks and storm securitization in our largest jurisdiction ▪ Announced 1,250 MW of regula
Slide 5: Carolinas legislative and regulatory updates
Carolinas legislative and regulatory updates NORTH CAROLINA LEGISLATION INTRODUCED ▪ Identical bills introduced in Senate and House in early April NORTH CAROLINA ▪ Legislation would enable NCUC to consider: STORM COST SECURITIZATION ▪ Multi-year rate plans and/or ROE bands AND ALT RATES BILL ▪ Storm
Slide 6: Update on strategic initiatives
Update on strategic initiatives HIGHLY-EFFICIENT NATURAL GAS ▪ $1.1 billion WCMP combined cycle (DEP) on target for late-2019 completion RENEWABLES ▪ Announced three new solar projects at DEF (1) ▪ Results issued for first renewable energy RFP under House Bill 589 in North Carolina(1) ▪ Commercial R
Slide 7: Coal ash basin closure update
Coal ash basin closure update NC DEQ ORDER SUMMARY SIGNIFICANT PROGRESS CLOSING BASINS ▪ NC Department of Environmental Quality (DEQ) issued ▪ ~20 million tons of ash excavated at high priority sites in order April 1 requiring low priority sites be fully excavated North Carolina since basin closure
Slide 8: 1Q 2019 adjusted diluted EPS summary and primary drivers
1Q 2019 adjusted diluted EPS summary and primary drivers SEGMENT RESULTS VS. PRIOR YEAR QUARTER (1) ADJUSTED DILUTED EARNINGS PER SHARE Electric Utilities & Infrastructure, -$66 M (-$0.10 per share) ▼ Weather (-$0.07) and volumes $1.28 $1.24 ▼ Higher depreciation and amortization, primarily due to a
Slide 9: Customer growth and weather-normal electric volume trends
Customer growth and weather-normal electric volume trends ROLLING 12-MONTH RETAIL ELECTRIC VOLUME GROWTH RESIDENTIAL 1.0% ▪ Increase in average number of customers drives volume 0.5% growth for electric and gas utilities 0.6% ▪ Four jurisdictions in top 15 states for job growth COMMERCIAL -0.3% Resi
Slide 10: Maintaining balance sheet strength
Maintaining balance sheet strength COMMERCIAL RENEWABLES 2019 FINANCING PLAN STATUS MINORITY STAKE SALE ▪ Issued $600 million “Green Bonds” in March at DEP ▪ Sale to John Hancock announced April 24 ▪ Follows DEC’s $1 billion green bond in 2018 ▪ ~$415 million pre-tax proceeds to offset debt ▪ Issued
Slide 11: Our investor value proposition
Our investor value proposition A SOLID LONG-TERM HOLDING 4.2% ~8-10% 4 -6% DIVIDEND YIELD(1) zzz ATTRACTIVE HIGHLY WITH DIVIDEND RISK-ADJUSTED ACHIEVABLE GROWTH TOTAL SHAREHOLDER EPS GROWTH COMMITMENT(2) RETURN(3) THROUGH 2023(4) CONSTRUCTIVE JURISDICTIONS, LOW-RISK REGULATED INVESTMENTS AND BALANCE
Slide 12: Appendix
Appendix ITEM SLIDES Financial supplement 13-20 Sustainability / ESG 21-24 Other supplemental information 25-29 Upcoming events & other 30-34 FIRST QUARTER 2019 EARNINGS REVIEW AND BUSINESS UPDATE // 12
Slide 13: Financial supplement
Financial supplement FIRST QUARTER 2019 EARNINGS REVIEW AND BUSINESS UPDATE // 13
Slide 14: Key 2019 adjusted earnings guidance assumptions
Key 2019 adjusted earnings guidance assumptions ($ in millions) Original 2019 2019 YTD Assumptions (1) (thru 3/31/2019) Adjusted segment income/(expense) (2): Electric Utilities & Infrastructure $3,480 $750 Gas Utilities & Infrastructure $375 $226 Commercial Renewables $230 $13 Other ($440) ($89) Du
Slide 15: Key 2019 earnings sensitivities
Key 2019 earnings sensitivities Driver EPS Impact 1% change in earned return on equity +/- $0.49 Electric Utilities & $1 billion change in rate base +/- $0.07 Infrastructure 1% change in volumes +/- $0.13 1% change in earned return on equity +/- $0.06 Gas Utilities & $200 million change in rate base
Slide 16: Electric utilities quarterly weather impacts
Electric utilities quarterly weather impacts Weather segment 2019 2018 income to normal: Pretax impact Weighted avg. EPS impact Pretax impact Weighted avg. EPS impact diluted shares favorable / shares favorable / (unfavorable) (unfavorable) First Quarter ($55) 727 ($0.06) $10 701 $0.01 Second Quarte
Slide 17: Weather normalized volume trends, by electric jurisdiction
Weather normalized volume trends, by electric jurisdiction Rolling Twelve Months, as of March 31, 2019 Duke Energy Duke Energy Duke Energy Duke Energy Duke Energy Electric Carolinas Progress Florida Indiana Ohio/Kentucky Utilities 1.9% 2.1% 2.0% 2.0% 0.9% 1.0% 0.9% 1.0% 1.2% 1.0% 0.6% 0.5% 0.5% 0.6%
Slide 18: 2019 financing plan as of April 5, 2019
2019 financing plan as of April 5, 2019 (1)(2) ($ in millions) $2,000 Priced/ Equity Forward Common Stock Issued YTD Forward? Settled $1,750 ATM $200 M Yes Q4 DRIP $40 M No n/a $1,500 Total Common $240 B $1,250 $1,000 $750 $500 $250 $- Holding Duke Duke Duke Duke Duke Duke Piedmont Renewables Compan
Slide 19: 2019 long-term debt and preferred stock financing activity
2019 long-term debt and preferred stock financing activity as of April 5, 2019 Credit Ratings Amount Entity Date Issued (M/S&P/F, unless Term Type Rate ($ in millions) otherwise noted) $400 DE Ohio January 2019 A2/A 10-Year First Mortgage Bond Fixed – 3.65% $400 DE Ohio January 2019 A2/A 30-Year Fir
Slide 20: Liquidity summary as of March 31, 2019
Liquidity summary as of March 31, 2019 ($ in millions) Duke Duke Duke Duke Duke Duke Piedmont Duke Energy Energy Energy Energy Energy Energy Natural Energy Carolinas Progress Florida Indiana Ohio Kentucky Gas Total Master Credit Facility (1) $ 2,650 $ 1,750 $ 1,400 $ 650 $ 600 $ 300 $ 150 $ 500 $ 8,
Slide 21: Sustainability / Environmental Social and Governance (ESG)
Sustainability / Environmental Social and Governance (ESG) FIRST QUARTER 2019 EARNINGS REVIEW AND BUSINESS UPDATE // 21
Slide 22: Sustainability / ESG: carbon and other reductions
Sustainability / Environmental Social and Governance (ESG) ▪ Targeting 40% reduction in carbon dioxide (CO2) emissions by 2030(1) ▪ Since 2005, decreased CO2 emissions by 31%, sulfur dioxide emissions CARBON AND OTHER by 96% and nitrogen oxides emissions by 74% REDUCTIONS ▪ 49 coal units retired (~6
Slide 23: Sustainability / ESG: safety, employees, governance
Sustainability / Environmental Social and Governance (ESG) SAFETY – OUR NUMBER ONE PRIORITY ▪ Total Incident Case Rate (TICR) of 0.43 in 2018; one of the industry CARBON AND OTHER leaders for 4th year in a row REDUCTIONS EMPLOYEES ▪ Targeting a companywide engagement score of 76% by 2022 ▪ Named one
Slide 24: Sustainability / ESG: disclosure and recognition
Sustainability / Environmental Social and Governance (ESG) ▪ Dow Jones Sustainability Index for 13 years in a row ▪ Over a decade of annual Sustainability reports CARBON AND OTHER ▪ Climate Report issued in 2018 analyzes 2-degree scenario REDUCTIONS ▪ Our 40% CO2 reduction goal is consistent with a
Slide 25: Other supplemental information
Other supplemental information FIRST QUARTER 2019 EARNINGS REVIEW AND BUSINESS UPDATE // 25
Slide 26: Advancing our strategic vision
Advancing our strategic vision TRANSFORM THE CUSTOMER EXPERIENCE MODERNIZE THE GENERATE EXPAND NATURAL GAS ENERGY GRID CLEANER ENERGY INFRASTRUCTURE STAKEHOLDER ENGAGEMENT EMPLOYEE ENGAGEMENT AND OPERATIONAL EXCELLENCE ARE FOUNDATIONAL TO OUR SUCCESS FIRST QUARTER 2019 EARNINGS REVIEW AND BUSINESS U
Slide 27: Renewables projects detail
Renewables projects detail Megawatts Site Solar Wind Total COD Location Regulated: Lake Placid 45 - 45 Q4 2019 FL Trenton 74.9 - 74.9 Q4 2019 FL DeBary 74.5 - 74.5 Q1 2020 FL Catawba County(1) 69 - 69 2020 NC (DEC) Gaston County(1) 25 - 25 2020 NC (DEC) Onslow County (BOT) (1)(2) 80 - 80 2020 NC (DE
Slide 28: Atlantic Coast Pipeline update
Atlantic Coast Pipeline update PERMIT STATUS Phase 1 ▪ U.S. Fish & Wildlife Service Biological Opinion and Incidental Take Statement stayed – Hearing before 4th Circuit Court of Appeals – May 9 – Order expected ~90 days ▪ U.S. Forest Service permit to cross national forests Phase 2 remanded; permiss
Slide 29: North Carolina coal ash detail
North Carolina coal ash detail Site Ranking Approximate State Compliance Actual/ Expected Tons of Ash(1) Date Closure Date(5) Riverbend(2) High - August 2019 March 2019 Dan River(2) High 1 August 2019 May 2019 Sutton(2) High 1 December 2019 July 2019 Asheville (2)(3) High 2 August 2022 Cape Fear(4)
Slide 30: Upcoming events & other
Upcoming events & other FIRST QUARTER 2019 EARNINGS REVIEW AND BUSINESS UPDATE // 30
Slide 31: Upcoming events
Upcoming events Event Date 2019 AGA Financial Forum May 20-21, 2019 2Q 2019 earnings call (tentative) August 6, 2019 3Q 2019 earnings call (tentative) November 8, 2019 FIRST QUARTER 2019 EARNINGS REVIEW AND BUSINESS UPDATE // 31
Slide 32: Investor relations contact information
Investor relations contact information MIKE CALLAHAN, VICE PRESIDENT INVESTOR RELATIONS ▪ Michael.Callahan@duke-energy.com ▪ (704) 382-0459 MIKE SWITZER, DIRECTOR INVESTOR RELATIONS ▪ Mike.Switzer@duke-energy.com ▪ (704) 382-6473 ABBY MOTSINGER, MANAGER INVESTOR RELATIONS ▪ Abby.Motsinger@duke-energ
Slide 33: Safe harbor statement
Safe harbor statement This document includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are based on management’s beliefs and assumptions and can often be identified by
Slide 34: For additional information on Duke Energy, please visit duke-energy.com/investors
For additional information on Duke Energy, please visit: duke-energy.com/investors
Slide 35: Non-GAAP Reconciliations: Adjusted Diluted EPS
Duke Energy Corporation Non-GAAP Reconciliations First Quarter Earnings Review & Business Update May 9, 2019 Adjusted Diluted Earnings per Share (EPS) The materials for Duke Energy Corporation’s (Duke Energy) First Quarter Earnings Review and Business Update on May 9, 2019, include a discussion of a
Slide 36: Adjusted Segment Income and Adjusted Other Net Loss
Adjusted Segment Income and Adjusted Other Net Loss The materials for Duke Energy’s First Quarter Earnings Review and Business Update on May 9, 2019, include a discussion of adjusted segment income and adjusted other net loss for the quarter ended March 31, 2018 and a discussion of 2019 forecasted a
Slide 37: Reported to Adjusted Earnings Reconciliation
DUKE ENERGY CORPORATION REPORTED TO ADJUSTED EARNINGS RECONCILIATION Three Months Ended March 31, 2018 (Dollars in millions, except per-share amounts) Special Items Costs to Impairment Achieve of Equity Reported Piedmont Regulatory Sale of Method Impacts of Total Adjusted Earnings Merger Settlements
Slide 38: Available Liquidity Reconciliation
Duke Energy Corporation Available Liquidity Reconciliation As of March 31, 2019 (In millions) Cash and Cash Equivalents $ 377 Less: Certain Amounts Held in Foreign Jurisdictions (30) Less: Unavailable Domestic Cash (144) 203 Plus: Remaining Availability under Master Credit Facilities and other facil