Duke Energy Corporation (holding Company) · NYSE:DUK

Duke Energy Corporation (holding Company) — Q3 2023 Earnings Presentation

41 slides from Duke Energy Corporation (holding Company)'s earnings presentation, Nov 2, 2023

  1. Slide 1: Q3 2023 Earnings Review and Business Update

    Q3 / 2023 Earnings Review and Business Update Lynn Good / Chair, President and CEO Brian Savoy / Executive Vice President and CFO November 2, 2023 // 1

  2. Slide 2: Safe Harbor statement; Regulation G disclosure

    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 herein and in Duke Energy’s

  3. Slide 3: 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

  4. Slide 4: Financial highlights

    Financial highlights $1.59 / $1.94 Q3 2023 REPORTED / ADJUSTED EPS $5.55 - $5.65 NARROWING 2023 ADJUSTED EPS GUIDANCE RANGE 5% - 7% REAFFIRMING GROWTH RATE THROUGH 2027 OFF MIDPOINT OF ORIGINAL 2023 GUIDANCE RANGE ($5.65)(1) (1) Based on adjusted EPS Duke Energy’s Bad Creek Pumped Hydro plant in Sou

  5. Slide 5: Constructive North Carolina rate case outcomes

    Constructive North Carolina rate case outcomes MILESTONE ORDER IN DEP CASE SETTLEMENTS NARROW SCOPE OF CONTESTED ISSUES IN DEC CASE(2)  First implementation of the performance-based regulations authorized by HB 951, including  Rate base of $19.5 billion(1) for the historic base multi-year rate pla

  6. Slide 6: Advancing Carolinas energy transition

    Advancing Carolinas energy transition CAROLINAS RESOURCE PLAN FILED IN NEAR-TERM ACTION PLAN NORTH CAROLINA AND SOUTH CAROLINA HIGHLIGHTS IN AUGUST 2023  Single, unified integrated resource plan filed with both  6,000 MW of new solar in- North Carolina and South Carolina service by 2031  Maintain

  7. Slide 7: Pure play regulated utility operating in constructive and growing jurisdictions

    Pure play regulated utility operating in constructive and growing jurisdictions COMPLETED PORTFOLIO TRANSITION TO FULLY REGULATED COMPANY… 2011 Duke Energy & . Energy NC enacts bi-partisan Current Progress Energy Acquired Piedmont comprehensive clean Merge merger 2015 Natural Gas 2016 energy legisla

  8. Slide 8: Q3 2023 adjusted EPS summary and primary drivers

    Q3 2023 adjusted EPS summary and primary drivers REPORTED EARNINGS PER SHARE SEGMENT RESULTS VS. PRIOR YEAR QUARTER(2) $4.03 Electric Utilities & Infrastructure, -$9M (-$0.01 per share) $2.27 ▲ Rate cases and riders $1.81 $1.59 ▲ O&M from cost mitigation initiatives, partially offset by storms 2022

  9. Slide 9: Retail electric volumes

    Retail electric volumes Q3 2023 VOLUME TRENDS LONG-TERM GROWTH DRIVERS  Continued strong residential customer growth of  Expect 2022-2027 load growth of ~0.5% to 1.0% +1.9% compared to Q3 2022, offset by decline in usage per customer  Continued residential customer growth from population migratio

  10. Slide 10: 2024 earnings drivers and cost control efforts

    2024 earnings drivers and cost control efforts 2024 EARNINGS DRIVERS On track Sustainable Cost control efforts in 2023? after 2023? ▲ North Carolina multi-year rate plans 2022 / 2023 actions ▲ Carolinas rate cases 2022 cost initiative for ▲ Florida multi-year rate plan and SPP rider(1)  100% 2023 (

  11. Slide 11: Committed to maintaining current credit ratings

    Committed to maintaining current credit ratings KEY MESSAGES DEFERRED FUEL BALANCE ($ in billions) DE Midwest  Continue to benefit from a number of credit $3.9 DE Progress supportive drivers: $3.5 $3.2 DE Carolinas  Fuel recoveries on track. Continue to $2.8 DE Florida expect FFO / Debt improvemen

  12. Slide 12: Our investor value proposition

    Our investor value proposition A STRONG LONG-TERM RETURN PROPOSITION 4.6% ~10% 5 -7% DIVIDEND YIELD(1) ATTRACTIVE zzz LONG-TERM WITH LONG-TERM RISK-ADJUSTED EPS GROWTH(4) DIVIDEND GROWTH TOTAL SHAREHOLDER THROUGH 2027 COMMITMENT(2) RETURN(3) CONSTRUCTIVE, GROWING JURISDICTIONS, LOWER-RISK REGULATED

  13. Slide 13: Appendix

    APPENDIX // 13

  14. Slide 14: 2023 adjusted EPS guidance range and fourth quarter drivers

    2023 adjusted EPS guidance range and fourth quarter drivers CONSTRUCTIVE REGULATORY OUTCOMES AND AGILITY SETUP STRONG FINISH TO THE YEAR FOURTH QUARTER EARNINGS DRIVERS(1) ▲ DEP-NC rate case & MYRP $1.50 - $1.60 $5.55 - $5.65 ▲ DEC-NC interim rates ▲ Florida MYRP & SPP $4.05 ▲ Midwest riders ▲ Norma

  15. Slide 15: Top-performer across multiple O&M cost efficiency measures

    Top-performer across multiple O&M cost efficiency measures(1,2) Electric non-generation Electric non-generation Nuclear production expense / O&M / Customer O&M / MWh Nuclear Generation MWh #2 / 19 #3 / 19 #2 / 11 $0 $25 $50 Building on proven cost management track record $300 million cost initiative

  16. Slide 16: Hurricane Idalia response and recovery

    Hurricane Idalia response and recovery  200,000 customers impacted in Duke Energy Florida’s service territory and just over 100,000 customers in the Carolinas  95% of Florida customers were restored within 36 hours  All Carolinas customers were restored within 24 hours  Nearly 10,000 front-line

  17. Slide 17: Cost-effective clean energy transition drives earnings base growth

    Cost-effective clean energy transition drives earnings base growth GROWING $65B 5-YEAR PERCENTAGE OF TOTAL CAPEX CAPITAL PLAN(1)… 2023-2027 $80B - $63B $65B $85B $59B Hydrogen Capable Gas Gen Gas Gen Maintenance ~5% ~2% Coal Maintenance 2021 – 2022 – 2023 – 2028 – ~2% 2025 2026 2027 2032 Gas LDC ~21

  18. Slide 18: Electric utilities & infrastructure recovery mechanisms

    Electric utilities & infrastructure recovery mechanisms RECOVERY MECHANISMS FOR ELECTRIC CAPEX(1)  ~90% of electric segment capital investments are eligible for modern recovery mechanisms, mitigating regulatory lag  Includes recovery through riders, rate cases with forecasted test years, and multi

  19. Slide 19: Regulatory activity details

    Regulatory activity details FILING DOCKET KEY STATUS TYPE NO. DRIVERS  Cumulative 3-year revenue increase: $494 million  ROE 9.8%; 53% equity cap. structure  Order issued on August 18 NC Base Rate Case  Historic rate base: $12.2 billion(2) DUKE ENERGY and PBR(1) E-2, Sub  Permanent year 1 rates

  20. Slide 20: 2023 Supplemental Financial Information

    2023 SUPPLEMENTAL FINANCIAL INFORMATION // 20

  21. Slide 21: Key 2023 adjusted earnings guidance assumptions

    Key 2023 adjusted earnings guidance assumptions(1) Original 2023 2023 YTD ($ in millions) Assumptions (thru 9/30/2023) Adjusted segment income/(expense)(2): Electric Utilities & Infrastructure $4,610 $3,172 Gas Utilities & Infrastructure $500 $327 Other ($755) ($388) Duke Energy Consolidated $4,355

  22. Slide 22: Electric utilities quarterly weather impacts

    Electric utilities quarterly weather impacts Weather segment 2023 2022 income to normal: Pretax Weighted EPS impact Pretax Weighted EPS impact impact avg. shares favorable / impact avg. shares favorable / (unfavorable) (unfavorable) First Quarter ($225) 770 ($0.22) ($33) 770 ($0.03) Second Quarter (

  23. Slide 23: Key 2023 earnings sensitivities

    Key 2023 earnings sensitivities Full-year Driver EPS Impact 1% change in earned return on equity +/- $0.58 $1 billion change in rate base +/- $0.07 Electric Utilities & Infrastructure 1% change in Electric Utilities volumes Industrial +/- $0.02(2) +/- $0.15(1)(2) Commercial +/- $0.05(2) Residential

  24. Slide 24: Weather normalized volume trends, by electric jurisdiction

    Weather normalized volume trends, by electric jurisdiction Rolling Twelve Months, as of September 30, 2023 Duke Energy Duke Energy Duke Energy Duke Energy Duke Energy Electric Carolinas Progress Florida Indiana Ohio/Kentucky Utilities 1.9% 0.8% 0.9% 0.9% 0.3% 0.1% -0.6% -0.3% -0.7% -0.3% -1.2% -0.8%

  25. Slide 25: Financing Plan Update and Current Liquidity

    FINANCING PLAN UPDATE AND CURRENT LIQUIDITY // 25

  26. Slide 26: 2023 Financing plan

    2023 Financing plan(1) Estimated / Actual Notional Pre-Issuance Completed Issuer Amount Hedges Security Date Issued Term Rate 2023 Maturities(2) ($ in millions) ($ in millions) ($ in millions) (3) (4) $1,725 - Convertible Debt April 6, 2023 $1,725 3-year 4.125% $1,250 Holding Company $600 10-year 5.

  27. Slide 27: Liquidity summary (as of September 30, 2023)

    Liquidity summary (as of September 30, 2023) ($ in millions) Duke Duke Duke Duke Duke Duke Duke Energy Energy Energy Energy Energy Energy Piedmont Energy Carolinas Progress Florida Indiana Ohio Kentucky Natural Gas Total Master Credit Facility (1) $ 2,275 $ 1,575 $ 1,400 $ 1,250 $ 950 $ 525 $ 225 $

  28. Slide 28: Debt maturities through 2025 by issuer

    Debt maturities through 2025 by issuer(1) Entity Security Type Amount Rate Type Settlement Date Maturity Date Total Duke Energy Corporation Term Loan $1,000 6.05% Floating 03/09/22 03/09/24 Duke Energy Corporation Sr. Notes $600 3.75% Fixed 04/04/14 04/15/24 $2,000 Duke Energy Corporation Sr. Notes

  29. Slide 29: Upcoming Events & Other

    UPCOMING EVENTS & OTHER // 29

  30. Slide 30: Upcoming events

    Upcoming events Event Date 2023 EEI Financial Conference November 12-14, 2023 4Q 2023 earnings call (tentative) February 8, 2024 // 30 THIRD QUARTER 2023 EARNINGS REVIEW AND BUSINESS UPDATE // 30

  31. Slide 31: Investor relations contact information

    Investor relations contact information ABBY MOTSINGER, VICE PRESIDENT INVESTOR RELATIONS  Abby.Motsinger@duke-energy.com  (704) 382-7624 CHRIS JACOBI, DIRECTOR INVESTOR RELATIONS  Christopher.Jacobi@duke-energy.com  (704) 382-8397 MEGAN HAMMEL, MANAGER INVESTOR RELATIONS  Megan.Hammel@duke-ener

  32. Slide 32: For additional information on Duke Energy

    HEADLINE GOES HERE For additional information on Duke Energy, please visit: duke-energy.com/investors THIRD QUARTER 2023 EARNINGS REVIEW AND BUSINESS UPDATE // 32

  33. Slide 33: Non-GAAP Reconciliations: Adjusted Earnings per Share

    Duke Energy Corporation Non-GAAP Reconciliations Third Quarter Earnings Review & Business Update November 2, 2023 Adjusted Earnings per Share (EPS) The materials for Duke Energy Corporation’s (Duke Energy) Third Quarter Earnings Review and Business Update on November 2, 2023, include a discussion of

  34. Slide 34: Adjusted Segment Income and Adjusted Other Net Loss

    Adjusted Segment Income and Adjusted Other Net Loss The materials for Duke Energy’s Third Quarter Earnings Review and Business Update on November 2, 2023, include a discussion of adjusted segment income and adjusted other net loss for the quarter and year-to-date periods ended September 30, 2023 and

  35. Slide 35: Available Liquidity; Funds From Operations Ratio

    Available Liquidity The materials for Duke Energy’s Third Quarter Earnings Review and Business Update on November 2, 2023, include a discussion of Duke Energy’s available liquidity balance. The available liquidity balance presented is a non-GAAP financial measure as it represents cash and cash equiv

  36. Slide 36: Reported to Adjusted Earnings Reconciliation, Three Months Ended Sept 30, 2023

    DUKE ENERGY CORPORATION REPORTED TO ADJUSTED EARNINGS RECONCILIATION Three Months Ended September 30, 2023 (Dollars in millions, except per share amounts) Special Item Reported Regulatory Discontinued Total Adjusted Earnings Matters Operations Adjustments Earnings SEGMENT INCOME Electric Utilities a

  37. Slide 37: Reported to Adjusted Earnings Reconciliation, Nine Months Ended Sept 30, 2023

    DUKE ENERGY CORPORATION REPORTED TO ADJUSTED EARNINGS RECONCILIATION Nine Months Ended September 30, 2023 (Dollars in millions, except per share amounts) Special Item Reported Regulatory Discontinued Total Adjusted Earnings Matters Operations Adjustments Earnings SEGMENT INCOME Electric Utilities an

  38. Slide 38: Reported to Adjusted Earnings Reconciliation, Three Months Ended Sept 30, 2022

    DUKE ENERGY CORPORATION REPORTED TO ADJUSTED EARNINGS RECONCILIATION Three Months Ended September 30, 2022 (Dollars in millions, except per share amounts) Reported Discontinued Total Adjusted Earnings Operations Adjustments Earnings SEGMENT INCOME Electric Utilities and Infrastructure $ 1,540 $ — $

  39. Slide 39: Reported to Adjusted Earnings Reconciliation, Nine Months Ended Sept 30, 2022

    DUKE ENERGY CORPORATION REPORTED TO ADJUSTED EARNINGS RECONCILIATION Nine Months Ended September 30, 2022 (Dollars in millions, except per share amounts) Special Item Reported Regulatory Discontinued Total Adjusted Earnings Matters Operations Adjustments Earnings SEGMENT INCOME Electric Utilities an

  40. Slide 40: Effective Tax Reconciliation September 2023

    DUKE ENERGY CORPORATION EFFECTIVE TAX RECONCILIATION September 2023 (Dollars in millions) Three Months Ended Nine Months Ended September 30, 2023 September 30, 2023 Effective Tax Effective Tax Balance Rate Balance Rate Reported Income From Continuing Operations Before Income Taxes $ 1,515 $ 3,510 Re

  41. Slide 41: Available Liquidity Reconciliation as of September 30, 2023

    Duke Energy Corporation Available Liquidity Reconciliation As of September 30, 2023 (In millions) Cash and Cash Equivalents $ 394 Less: Certain Amounts Held in Foreign Jurisdictions (7) Less: Unavailable Domestic Cash (56) 331 Plus: Remaining Availability under Master Credit Facilities and other fac

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