Duke Energy Corporation (holding Company) · NYSE:DUK

Duke Energy Corporation (holding Company) — Q1 2023 Earnings Presentation

39 slides from Duke Energy Corporation (holding Company)'s earnings presentation, May 9, 2023

  1. Slide 1: Q1 2023 Earnings Review and Business Update

    Q1 / 2023 Earnings Review and Business Update Lynn Good / Chair, President and CEO Brian Savoy / Executive Vice President and CFO May 9, 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 $1.01 / $1.20 Q1 2023 REPORTED / ADJUSTED EPS RESULTS IMPACTED BY WARM WINTER WEATHER ACROSS OUR JURISDICTIONS(1) $5.55 - $5.75 REAFFIRMING 2023 ADJUSTED EPS GUIDANCE RANGE 5% – 7% REAFFIRMING GROWTH RATE THROUGH 2027 OFF MIDPOINT OF 2023 GUIDANCE RANGE ($5.65)(2) COMMERCIAL REN

  5. Slide 5: Advancing regulatory and policy strategy across our footprint

    Advancing regulatory and policy strategy across our footprint  Reached partial settlement in DE Progress rate North case(1); hearing began May 4 Carolina  Filing updated Carbon Plan IRP in September  DE Progress rate case settlement approved in full in February; rates effective in April South  S

  6. Slide 6: Transforming the largest T&D system in the U.S.

    Transforming the largest T&D system in the U.S. 2023-2027 T&D CAPEX ~$36 BILLION T&D CAPEX INVESTMENTS, 2023-2027, WITH CONSTRUCTIVE RECOVERY Maintenance ~5% MECHANISMS & Other Customer / Capacity Enables electrification, including EV adoption $36 B >320,000 MILES Technology & Automation Reliability

  7. Slide 7: Q1 2023 adjusted EPS summary and primary drivers

    Q1 2023 adjusted EPS summary and primary drivers REPORTED EARNINGS PER SHARE $0.47 SEGMENT RESULTS VS. PRIOR YEAR QUARTER(1) ($0.45) $0.45 Electric Utilities & Infrastructure, -$105 M (-$0.14 per share) ▼ Weather and volumes $1.08 $5.12 $1.01 ▼ Interest expense ▲ Rate cases and riders ▲ O&M, primari

  8. Slide 8: Retail electric volumes

    Retail electric volumes KEY MESSAGES  As expected, rolling 12-month retail load growth moderating toward ~0.5% planning assumption  Continued strong residential customer growth  Economic development drives long-term load growth; attracted over 29,000 new jobs and $23 billion in capital investment

  9. Slide 9: Committed to maintaining current credit ratings

    Committed to maintaining current credit ratings KEY MESSAGES DEFERRED FUEL BALANCE ($ in billions) DE Midwest  Moody’s reaffirmed DE Corporation’s $3.9 DE Progress $3.5 Baa2/Stable sr. unsecured credit rating on DE Carolinas April 24th DE Florida $2.2  In April, successfully issued $1.7 billion of

  10. Slide 10: Our investor value proposition

    Our investor value proposition A STRONG LONG-TERM RETURN PROPOSITION 4.0% ~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

  11. Slide 11: Appendix

    APPENDIX // 11

  12. Slide 12: Reached partial settlement in DEP NC rate case

    Reached partial settlement in DEP NC rate case MAJOR COMPONENTS OF THE PARTIAL SETTLEMENT INCLUDE  Partial Settlement Agreement includes the Public Staff and the Carolina Industrial Group for Fair Utility Rates II (CIGFUR II), with the following key provisions:  Agreement on capital projects and r

  13. Slide 13: Duke's scale enables top tier O&M performance

    Duke’s scale enables top tier O&M performance Duke Energy compares favorably to UTY companies across multiple O&M metrics  O&M efficiency supports customer rates and creates headroom for growth  Every $1 of O&M reduced allows for ~$7 of capex  Size and scale better positioned Duke to drive O&M ef

  14. Slide 14: Nuclear fleet provides reliable, affordable, carbon-free generation

    Nuclear fleet provides reliable, affordable, carbon-free generation LARGEST REGULATED NUCLEAR FLEET IN U.S. EFFICIENT LOW-COST OPERATIONS Nuclear production expense / Nuclear Generation ($/MWh)(2) McGuire 2,316 MW Harris DUK 964 MW Oconee 2,554 MW Brunswick 1,870 MW Catawba 2,310 MW(1) Robinson 759

  15. Slide 15: Indiana energy transition

    Indiana energy transition TRANSITION TO CLEANER ENERGY WITH FOCUS ON RELIABILITY AND AFFORDABILITY  Updated 2021 Indiana integrated resource plan (IRP) in February 2023  Reflects results from 2022 RFPs, federal incentives from the IRA, changing commodity and technology prices, and new MISO rules f

  16. Slide 16: Regulatory activity details

    Regulatory activity details FILING DOCKET KEY STATUS TYPE NO. DRIVERS  Partial settlement agreement filed in April NC Base Rate Case  Hearing began May 4 DUKE ENERGY and PBR(1) E-2, Sub  Temporary rates subject to refund  See slide 12 for settlement terms PROGRESS filed Oct. 6, ’22 1300 expected

  17. Slide 17: 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

  18. Slide 18: Impact Report highlights

    Impact Report highlights GOALS RECENT ACCOMPLISHMENTS  44% carbon reduction from 2005 levels Carbon ENVIRONMENTAL Reduction  Decarbonizing natural gas business, focusing on methane detection and reduction of emissions using technology  Net-zero for methane emissions by 2030  56 coal units retire

  19. Slide 19: Economic development

    Economic development OUR COMMUNITIES DEPEND ON ECONOMIC GROWTH, AND WE PLAY AN IMPORTANT ROLE  We work with regional, state and local authorities to promote economic growth in our communities, helping attract investment in jobs  Focused on several key business sectors such as companies in battery,

  20. Slide 20: Long-standing history of strong governance driven from diverse Board of Directors

    Long-standing history of strong governance driven from diverse Board of Directors FOCUSED ON BOARD COMPOSITION TO OVERSEE THE COMPANY’S LONG-TERM STRATEGY  13 out of 14 directors are independent (all directors except Chair, President and CEO)  7 out of 14 directors are female or identify as a part

  21. Slide 21: 2022 Supplemental Financial Information

    2022 SUPPLEMENTAL FINANCIAL INFORMATION // 21

  22. Slide 22: Key 2023 adjusted earnings guidance assumptions

    Key 2023 adjusted earnings guidance assumptions(1) ($ in millions) Original 2023 2023 YTD Assumptions (thru 3/31/2023) Adjusted segment income/(expense)(2): Electric Utilities & Infrastructure $4,610 $791 Gas Utilities & Infrastructure $500 $287 Other ($755) ($168) Duke Energy Consolidated $4,355 $9

  23. Slide 23: 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 $

  24. Slide 24: Key 2023 earnings sensitivities

    Key 2023 earnings sensitivities 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 +/- $0.

  25. Slide 25: Weather normalized volume trends, by electric jurisdiction

    Weather normalized volume trends, by electric jurisdiction Rolling Twelve Months, as of March 31, 2023 Duke Energy Duke Energy Duke Energy Duke Energy Duke Energy Electric Carolinas Progress Florida Indiana Ohio/Kentucky Utilities 7.1% 3.6% 2.2% 1.9% 1.8% 1.1% 0.9% 1.0% 0.6% 0.0% 0.0% 0.1% 0.1% 0.1%

  26. Slide 26: Financing plan update and current liquidity

    FINANCING PLAN UPDATE AND CURRENT LIQUIDITY // 26

  27. Slide 27: 2023 Financing plan

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

  28. Slide 28: Liquidity summary (as of March 31, 2023)

    Liquidity summary (as of March 31, 2023) ($ in millions) (1) Duke Energy's master credit facility supports Tax-Exempt Bonds, LOCs and the Duke Energy CP program of $6 billion (2) Includes permanent layer of commercial paper of $625 million, which is classified as long-term debt // 28 FIRST QUARTER 2

  29. Slide 29: Upcoming events & other

    UPCOMING EVENTS & OTHER // 29

  30. Slide 30: Upcoming events

    Upcoming events Event Date 2Q 2023 earnings call (tentative) August 3, 2023 3Q 2023 earnings call (tentative) November 2, 2023 // 30 FIRST 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 LINDA MILLER, MANAGER INVESTOR RELATIONS  Linda.Miller@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 FOURTH QUARTER 2021 EARNINGS REVIEW AND BUSINESS UPDATE // 32

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

    Duke Energy Corporation Non-GAAP Reconciliations First Quarter Earnings Review & Business Update May 9, 2023 Adjusted Earnings per Share (EPS) The materials for Duke Energy Corporation’s (Duke Energy) First Quarter Earnings Review and Business Update on May 9, 2023, include a discussion of adjusted

  34. Slide 34: Adjusted segment income and adjusted other net loss

    Adjusted segment income and adjusted other net loss are non-GAAP financial measures, as they represent reported segment income and other net loss adjusted for special items (as discussed above under Adjusted EPS). Management believes the presentation of adjusted segment income and adjusted other net

  35. Slide 35: Funds From Operations (FFO) Ratio

    Funds From Operations (FFO) Ratio The materials for Duke Energy’s First Quarter Earnings Review and Business Update on May 9, 2023 include a reference to the expected FFO to Total Debt ratio. This ratio reflects non-GAAP financial measures. The numerator of the FFO to Total Debt ratio is calculated

  36. Slide 36: Reported to adjusted earnings reconciliation, Q1 2023

    DUKE ENERGY CORPORATION REPORTED TO ADJUSTED EARNINGS RECONCILIATION Three Months Ended March 31, 2023 (Dollars in millions, except per share amounts) Reported Discontinued Total Adjusted Earnings Operations Adjustments Earnings SEGMENT INCOME Electric Utilities and Infrastructure $ 791 $ — $ — $ 79

  37. Slide 37: Reported to adjusted earnings reconciliation, Q1 2022

    DUKE ENERGY CORPORATION REPORTED TO ADJUSTED EARNINGS RECONCILIATION Three Months Ended March 31, 2022 (Dollars in millions, except per share amounts) Special Item Reported Regulatory Discontinued Total Adjusted Earnings Matters Operations Adjustments Earnings SEGMENT INCOME Electric Utilities and I

  38. Slide 38: Effective tax reconciliation

    DUKE ENERGY CORPORATION EFFECTIVE TAX RECONCILIATION March 2023 (Dollars in millions) Three Months Ended March 31, 2023 Effective Tax Balance Rate Reported Income From Continuing Operations Before Income Taxes $ 1,125 Noncontrolling Interests (25) Preferred Dividends (39) Pretax Income Including Non

  39. Slide 39: Available liquidity reconciliation

    Duke Energy Corporation Available Liquidity Reconciliation As of March 31, 2023 (In millions) Cash and Cash Equivalents $ 462 Less: Certain Amounts Held in Foreign Jurisdictions (7) Less: Unavailable Domestic Cash (152) 303 Plus: Remaining Availability under Master Credit Facilities and other facili

Duke Energy Corporation (Holding Company) — Q1 2023 Earnings Presentation on 6ix