Duke Energy Corporation (holding Company) · NYSE:DUK
Duke Energy Corporation (holding Company) — Q1 2008 Earnings Presentation
22 slides from Duke Energy Corporation (holding Company)'s earnings presentation, May 2, 2008
Slide 1: First Quarter Earnings Review and Business Update
MAY 2, 2008 FIRST QUARTER EARNINGS REVIEW AND BUSINESS UPDATE Jim Rogers Chairman, President and Chief Executive Officer David Hauser Group Executive and Chief Financial Officer Lynn Good Group Executive and President – Commercial Businesses
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT Some of the statements in this document concerning future company performance will be forward-looking within the meanings of the securities laws. Actual results may materially differ from those discussed in these forward-looking statements, and you should refer to the additiona
Slide 3: 1Q 2008 Earnings Summary
1Q 2008 EARNINGS SUMMARY 1Q08 1Q07 Reported Diluted EPS $ 0.37 $ 0.28 Adjustments (0.02) 0.03 Discontinued Operations - (0.01) Adjusted Diluted EPS $ 0.35 $ 0.30 Increase in adjusted diluted EPS due to improved results at three largest business units U.S. Franchised Electric & Gas Commercial P
Slide 4: U.S. Franchised Electric & Gas
U.S. FRANCHISED ELECTRIC & GAS Reported & Adjusted Segment EBIT ($ millions) 1Q08 1Q07 Reported Segment EBIT $ 637 $ 574 Adjustments - - Adjusted Segment EBIT $ 637 $ 574 HIGHLIGHTS Adjusted segment EBIT improvement primarily due to Conclusion of N.C. clean air amortization - $56 million impact
Slide 5: Commercial Power
COMMERCIAL POWER Reported & Adjusted Segment EBIT ($ millions) 1Q08 1Q07 Reported Segment EBIT $ 146 $ 13 Adjustments (47) 26 Adjusted Segment EBIT $ 99 $ 39 HIGHLIGHTS Adjusted segment EBIT improvement primarily due to Lower purchase accounting expenses of $49 million $12 million gains on the
Slide 6: DEI
DEI Reported & Adjusted Segment EBIT ($ millions) 1Q08 1Q07 Reported Segment EBIT $ 114 $ 94 Adjustments - - Adjusted Segment EBIT $ 114 $ 94 HIGHLIGHTS Adjusted segment EBIT improvement primarily due to Improved results at National Methanol of approximately $21 million $10 million favorable F
Slide 7: Crescent and Other
CRESCENT Reported & Adjusted Segment EBIT ($ millions) 1Q08 1Q07 Reported Segment EBIT $ 2 $ 2 Adjustments - - Adjusted Segment EBIT $ 2 $ 2 1Q08 segment results flat compared to prior year As of March 31, 2008, Duke Energy’s investment in Crescent was approximately $200 million OTHER Reported &
Slide 8: Other Items
OTHER ITEMS Maintaining strong liquidity and access to capital markets $642 million of cash and cash equivalents Increased credit facility from $2.65 billion to $3.2 billion $1.9 billion in debt issued year to date – all at Duke Energy Carolinas 1Q08: $900 million total – $400 million 10yr
Slide 9: Commercial Businesses
COMMERCIAL BUSINESSES 2008 employee incentive target Commercial Power includes the following adjusted EBIT Ohio generation Midwest gas-fired generation expectations Wind generation Commercial Power: $385 million Midwest DEI: $380 million 3,800 MW Coal/Oil 3,750 MW Gas Wind Late Stage Developme
Slide 10: Commercial Business Update
COMMERCIAL BUSINESS UPDATE Midwest Gas-Fired Assets PJM Capacity Auction (Midwest gas-fired assets receiving auction price) 3,600 MW in PA, OH, IN and IL Not dedicated to the Ohio native load 3,500 2,480MW CC / 1,120MW CT 3,000 3,120MW in PJM TBD May 2008 2,500 Recent PJM Capacity Auctio
Slide 11: Commercial Business Update: Renewables
COMMERCIAL BUSINESS UPDATE Renewables Wind 3,000+ MW development pipeline, grown from 1,000MW initial acquisition 240MW currently under construction Happy Jack 180MW on schedule for completion in 2008 Annual growth potential of 200-300MW Other Actively pursuing opportunities in solar
Slide 12: Commercial Business Update: Latin America
COMMERCIAL BUSINESS UPDATE Latin America Houston MEXICO ~4,000 net MW owned and operated BELIZE GUATEMALA Guatemala City HONDURAS Central America San Salvador NICARAGUA Primarily baseload generation Demand Growth: 5% Market Size (MW): 8,200 COSTA RICA PANAMA VENEZUELA New Capacity Required: ~2
Slide 13: Ohio Update
OHIO UPDATE S.B. 221 – energy bill Workable framework Allows Duke to maintain current earnings and risk profile Expect to file Electric Security Plan (ESP) late summer Excessive earnings test No anticipated issues FERC application to transfer assets Increased financial flexibility 13
Slide 14: Construction / New Project Update
CONSTRUCTION / NEW PROJECT UPDATE Edwardsport IGCC CWIP rider filed Updated cost estimate to $2.35 billion Lee nuclear COL docketed and approved for next stage of review State approvals to be filed later this year Cliffside Air permit received in January Formal groundbreaking in Ma
Slide 15: Value Proposition
VALUE PROPOSITION Proactive regulatory strategy Annual Total Return Profile 5% to 7% CAGR in adjusted diluted 15% EPS through 2012 Annual dividend growth No anticipated equity offerings 10% through 2012 excluding internal plans (e.g., dividend reinvestment plan “DRIP”) 5% Strong balance sh
Slide 16: First Quarter Earnings Review and Business Update
FIRST QUARTER EARNINGS REVIEW AND BUSINESS UPDATE
Slide 17: Non-GAAP Reconciliations
Duke Energy Corporation Non-GAAP Reconciliations First Quarter Earnings Review and Business Update May 2, 2008 Adjusted Diluted Earnings per Share (“EPS”) The materials for Duke Energy Corporation’s (“Duke Energy”) First Quarter Earnings Review and Business Update presentation on May 2, 2008 include
Slide 18: Anticipated Adjusted Diluted EPS Growth Rates through 2012
available at this time, as management is unable to project special items or mark-to-market adjustments for 2008. Anticipated Adjusted Diluted EPS Growth Rates through 2012 The materials for Duke Energy’s First Quarter Earnings Review and Business Update presentation on May 2, 2008 include a discussi
Slide 19: Adjusted Segment EBIT and Other Net Expenses
Adjusted Segment EBIT and Other Net Expenses The materials for Duke Energy’s First Quarter Earnings Review and Business Update presentation on May 2, 2008 include the following non-GAAP measures related to segment EBIT and Other net expenses: • Adjusted segment EBIT and Other net expenses for the qu
Slide 20: Adjusted to Reported Earnings Reconciliation, March 2007 YTD
DUKE ENERGY CORPORATION ADJUSTED TO REPORTED EARNINGS RECONCILIATION March 2007 Year-to-date (Dollars in millions, except per-share amounts) Special Items (Note 1) Costs to Convertible Achieve, Economic Adjusted Debt Costs, Cinergy Hedges (Mark- Discontinued Total Reported Earnings Gas Spin-off Merg
Slide 21: Adjusted to Reported Earnings Reconciliation, March 2008 YTD
DUKE ENERGY CORPORATION ADJUSTED TO REPORTED EARNINGS RECONCILIATION March 2008 Year-to-Date (Dollars in millions, except per-share amounts) Special Items (Note 1) Costs to Achieve, Economic Adjusted Cinergy Hedges (Mark- Discontinued Total Reported Earnings Merger to-Market) * Operations Adjustment
Slide 22: Adjusted to Reported Earnings Reconciliation, December 2007 YTD
DUKE ENERGY CORPORATION ADJUSTED TO REPORTED EARNINGS RECONCILIATION December 2007 Year-to-date (Dollars in millions, except per-share amounts) Special Items (Note 1) Costs to Convertible Achieve, Settlement Economic Adjusted Debt Costs, Cinergy IT Severance Reserve Hedges (Mark- Discontinued Total