Duke Energy Corporation (holding Company) · NYSE:DUK
Duke Energy Corporation (holding Company) — Q2 2008 Earnings Presentation
22 slides from Duke Energy Corporation (holding Company)'s earnings presentation, Aug 5, 2008
Slide 1: Second Quarter Earnings Review and Business Update
AUGUST 5, 2008 SECOND QUARTER EARNINGS REVIEW AND BUSINESS UPDATE Jim Rogers Chairman, President and Chief Executive Officer David Hauser Group Executive and Chief Financial Officer
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: 2Q 2008 Earnings Summary
2Q 2008 EARNINGS SUMMARY 2Q08 2Q07 Reported Diluted EPS $ 0.28 $ 0.23 Adjustments to Reported: Add Back Crescent Project Impairments 0.05 - Deduct Mark-to-Market Impact of Economic Hedges (0.05) (0.01) Other Adjustments - 0.01 Discontinued Operations (0.01) 0.01 Adjusted Diluted EPS $ 0.27 $ 0.24
Slide 4: U.S. Franchised Electric & Gas
U.S. FRANCHISED ELECTRIC & GAS Reported & Adjusted Segment EBIT ($ millions) 2Q08 2Q07 Reported Segment EBIT $ 503 $ 452 Adjustments - - Adjusted Segment EBIT $ 503 $ 452 HIGHLIGHTS Adjusted segment EBIT increased primarily due to Conclusion of N.C. clean air amortization - $56 million impact
Slide 5: Commercial Power
COMMERCIAL POWER Reported & Adjusted Segment EBIT ($ millions) 2Q08 2Q07 Reported Segment EBIT $ 235 $ 64 Adjustments (107) (22) Adjusted Segment EBIT $ 128 $ 42 HIGHLIGHTS Adjusted segment EBIT increased primarily due to $36 million increase in gains on the sale of emission allowances Lower p
Slide 6: DEI
DEI Reported & Adjusted Segment EBIT ($ millions) 2Q08 2Q07 Reported Segment EBIT $ 116 $ 97 Adjustments - - Adjusted Segment EBIT $ 116 $ 97 HIGHLIGHTS Adjusted segment EBIT increased primarily due to Improved results at National Methanol of $14 million $9 million favorable FX variance Resu
Slide 7: Crescent and Other
CRESCENT Reported & Adjusted Segment EBIT ($ millions) 2Q08 2Q07 Reported Segment EBIT $ (108) $ 17 Adjustments 100 - Adjusted Segment EBIT $ (8) $ 17 2Q08 adjusted segment results declined primarily due to reduced Commercial and Residential sales and impairments of joint venture projects Adjust
Slide 8: Other Items
OTHER ITEMS Net cash balance of approximately $800 million as of June 30, 2008 $1.2 billion of cash, cash equivalents and short-term investments Net of approximately $400 million in short-term commercial paper $2.4 billion in debt issued year-to-date $1.9 billion at Duke Energy Carolinas
Slide 9: Modernization Projects
MODERNIZATION PROJECTS Construction underway Cliffside On target for 2012 completion Received approval from NCUC to build two 620 MW gas-fired CC plants N.C. gas-fired plants Air permits expected in 3Q08 Fleet 2010 and 2011 in-service dates Carolinas Modernization Continue to advance pla
Slide 10: Regulatory Update
REGULATORY UPDATE Pursuing in each of our five states Filings made in N.C., S.C., Indiana and Ohio Save A Watt Hearings have been held in N.C. and S.C. Indiana hearings scheduled for Fall 2008 Approved by PUCO Ohio $18 million (3%) increase in rates Gas Rate Case Continued recovery of
Slide 11: Ohio Electric Security Plan (ESP)
OHIO ELECTRIC SECURITY PLAN (ESP) Filed ESP on July 31, 2008 Term of plan: 2009-2011 Rates effective 1/1/2009 ~6% initial increase in total annual electric revenues Increased rates for higher generation costs Provide compensation for dedication of generation assets Continues existing r
Slide 12: Environmental Update
ENVIRONMENTAL UPDATE Cliffside Environmental groups are seeking to halt construction Duke has secured all necessary approvals and permits N.C. Department of Environment and Natural Resources already issued valid air permit Additionally, Duke voluntarily performed Maximum Achievable Control
Slide 13: Commercial Business Update
COMMERCIAL BUSINESS UPDATE Wind generation Over 500 MW in operation by 2009 240 MW currently under construction Happy Jack 283 net MW acquired with Catamount Energy transaction Expect to close 4Q08 Over 5,000 MW development Ocotillo pipeline (including Catamount) Sweetwater Notrees Proje
Slide 14: Value Proposition
VALUE PROPOSITION Proactive regulatory strategy Annual Total Return Profile 15% Forecast 5% to 7% CAGR in adjusted diluted EPS through 2012 Annual dividend growth 10% Strong balance sheet provides flexibility 5% 0% EPS Growth Dividend TSR Yield * * Based on current dividend yield of approxim
Slide 15: Second Quarter Earnings Review and Business Update
SECOND QUARTER EARNINGS REVIEW AND BUSINESS UPDATE
Slide 16: Non-GAAP Reconciliations
Duke Energy Corporation Non-GAAP Reconciliations Second Quarter Earnings Review and Business Update August 5, 2008 Adjusted Diluted Earnings per Share (“EPS”) The materials for Duke Energy Corporation’s (“Duke Energy”) Second Quarter Earnings Review and Business Update presentation on August 5, 2008
Slide 17: Anticipated Adjusted Diluted EPS Growth Rates through 2012
Anticipated Adjusted Diluted EPS Growth Rates through 2012 The materials for Duke Energy’s Second Quarter Earnings Review and Business Update presentation on August 5, 2008 include a discussion of the expected range of growth of 5-7% in adjusted diluted EPS through 2012 (on a compound annual growth
Slide 18: Adjusted to Reported Earnings Reconciliation, June 2007 Quarter-to-Date
DUKE ENERGY CORPORATION ADJUSTED TO REPORTED EARNINGS RECONCILIATION June 2007 Quarter-to-Date (Dollars in millions, except per-share amounts) Special Items (Note 1) Costs to Economic Achieve, IT Hedges Adjusted Cinergy Severance (Mark-to- Discontinued Total Reported Earnings Merger Costs Market) *
Slide 19: Adjusted to Reported Earnings Reconciliation, June 2007 Year-to-Date
DUKE ENERGY CORPORATION ADJUSTED TO REPORTED EARNINGS RECONCILIATION June 2007 Year-to-Date (Dollars in millions, except per-share amounts) Special Items (Note 1) Costs to Economic Convertible Achieve, IT Hedges Adjusted Debt Costs, Cinergy Severance (Mark-to- Discontinued Total Reported Earnings Ga
Slide 20: Adjusted to Reported Earnings Reconciliation, June 2008 Quarter-to-Date
DUKE ENERGY CORPORATION ADJUSTED TO REPORTED EARNINGS RECONCILIATION June 2008 Quarter-to-Date (Dollars in millions, except per-share amounts) Special Items (Note 1) Costs to Achieve, Crescent Economic Adjusted Cinergy Project Hedges (Mark- Discontinued Total Reported Earnings Merger Impairments to-
Slide 21: Adjusted to Reported Earnings Reconciliation, June 2008 Year-to-Date
DUKE ENERGY CORPORATION ADJUSTED TO REPORTED EARNINGS RECONCILIATION June 2008 Year-to-Date (Dollars in millions, except per-share amounts) Special Items (Note 1) Costs to Achieve, Crescent Economic Adjusted Cinergy Project Hedges (Mark- Discontinued Total Reported Earnings Merger Impairments to-Mar
Slide 22: Net Cash Balance Reconciliation
Net Cash Balance Reconciliation As of June 30, 2008 (In millions) Cash and Cash Equivalents $717 Short-Term Investments 460 Subtotal 1,177 Short-term Commercial Paper Outstanding (a) (405) Net Cash Balance (b) $772 (approximately $800 million) (a) Excludes approximately $450 million of commercial pa