Duke Energy Corporation (holding Company) · NYSE:DUK

Duke Energy Corporation (holding Company) — Q2 2023 Earnings Presentation

38 slides from Duke Energy Corporation (holding Company)'s earnings presentation, Aug 8, 2023

  1. Slide 1: Q2 2023 Earnings Review and Business Update

    Q2 / 2023 Earnings Review and Business Update Lynn Good / Chair, President and CEO Brian Savoy / Executive Vice President and CFO August 8, 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 ($0.32) / $0.91 Q2 2023 REPORTED(1) / ADJUSTED EPS RESULTS IMPACTED BY MILD WEATHER $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) (1) Q2 2023 reported results include Commerc

  5. Slide 5: Pure play regulated utility operating in constructive and growing jurisdictions

    Pure play regulated utility operating in constructive and growing jurisdictions COMPLETING THE PORTFOLIO TRANSITION TO FULLY REGULATED COMPANY DukeEnergy Energy& 2011 Duke & Progress NC enacts bi-partisan Current Progress Energy Acquired Piedmont comprehensive clean Energy Merge merger 2015 Natural

  6. Slide 6: Advancing regulatory and policy strategy across our footprint

    Advancing regulatory and policy strategy across our footprint  Expect DE Progress-NC rate case order later this month  DE Carolinas-NC rate case hearing begins August 28 Carolinas  Filing updated resource plans in SC and NC in mid-August; continuing annual solar procurement; filing CPCNs in NC fo

  7. Slide 7: Q2 2023 adjusted EPS summary and primary drivers

    Q2 2023 adjusted EPS summary and primary drivers REPORTED EARNINGS PER SHARE SEGMENT RESULTS VS. PRIOR YEAR QUARTER(2) $2.22 Electric Utilities & Infrastructure, -$108 M (-$0.14 per share) $1.14 ▼ Weather (-$0.16) and volumes $0.69 ▼ Interest expense ($0.32) ▲ Rate cases and riders 2022 2023(1) ▲ O&

  8. Slide 8: Top-performer across multiple O&M cost efficiency measures

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

  9. Slide 9: Retail electric volumes

    Retail electric volumes Q2 2023 VOLUME TRENDS LONG-TERM GROWTH DRIVERS  Continued strong residential customer growth of  Operate in growing jurisdictions, averaging ~1.7% +1.8% compared to Q2 2022, offset by decline in annual residential customer growth over the past five usage per customer years

  10. Slide 10: Committed to maintaining current credit ratings

    Committed to maintaining current credit ratings KEY MESSAGES DEFERRED FUEL BALANCE ($ in billions) DE Midwest  Fuel recoveries on track – filed for all uncollected $3.9 DE Progress $3.5 2022 costs. Continue to expect FFO / Debt $3.2 DE Carolinas improvement as amounts are recovered DE Florida $2.2

  11. Slide 11: 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

  12. Slide 12: Appendix

    APPENDIX // 12

  13. Slide 13: Commercial Renewables sale announcements

    Commercial Renewables sale announcements Utility scale business Buyer  Brookfield Renewable Announcement  June 12, 2023 Enterprise value  ~$2.8 billion, including project debt and non-controlling tax equity interests  ~$1.1 billion, subject to adjustment at closing based upon changes in working

  14. Slide 14: Second half drivers

    Second half drivers Driver Considerations Q3/Q4 Weighting  DEP-NC interim base rate increase effective in June, full rate increase expected to be effective in October Rate cases & Riders  DEC-NC interim base rate increase effective in September  Grid riders in Midwest and Florida Cost  $300 mill

  15. Slide 15: Regulatory activity details

    Regulatory activity details FILING DOCKET KEY STATUS TYPE NO. DRIVERS  Partial settlement agreement filed in April NC Base Rate Case  Hearing completed in May DUKE ENERGY and PBR(1) E-2, Sub  Interim rates subject to refund began  See slide 16 for settlement terms PROGRESS 1300 filed Oct. 6, ’22

  16. Slide 16: Partial settlement in DEP NC rate case

    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 related c

  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: 2022 Supplemental Financial Information

    2022 SUPPLEMENTAL FINANCIAL INFORMATION // 18

  19. Slide 19: Key 2023 adjusted earnings guidance assumptions

    Key 2023 adjusted earnings guidance assumptions(1) ($ in millions) Original 2023 2023 YTD Assumptions (thru 6/30/2023) Adjusted segment income/(expense)(2): Electric Utilities & Infrastructure $4,610 $1,641 Gas Utilities & Infrastructure $500 $312 Other ($755) ($329) Duke Energy Consolidated $4,355

  20. Slide 20: 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 (

  21. Slide 21: 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.

  22. Slide 22: Weather normalized volume trends, by electric jurisdiction

    Weather normalized volume trends, by electric jurisdiction Rolling Twelve Months, as of June 30, 2023 Duke Energy Duke Energy Duke Energy Duke Energy Duke Energy Electric Carolinas Progress Florida Indiana Ohio/Kentucky Utilities 6.1% 4.8% 3.4% 2.6% 1.6% 1.0% 0.6% 0.2% -0.3% -0.5% -0.2% -0.6% -1.1%

  23. Slide 23: Financing plan update and current liquidity

    FINANCING PLAN UPDATE AND CURRENT LIQUIDITY // 23

  24. Slide 24: 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. & $

  25. Slide 25: Liquidity summary (as of June 30, 2023)

    Liquidity summary (as of June 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 $ 2,025 $ 900 $ 1,350 $ 950 $ 525 $ 175 $ 800 $ 9

  26. Slide 26: Upcoming events & other

    UPCOMING EVENTS & OTHER // 26

  27. Slide 27: Upcoming events

    Upcoming events Event Date 3Q 2023 earnings call (tentative) November 2, 2023 2023 EEI Financial Conference November 12-14, 2023 // 27 SECOND QUARTER 2023 EARNINGS REVIEW AND BUSINESS UPDATE // 27

  28. Slide 28: 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

  29. Slide 29: For additional information on Duke Energy

    HEADLINE GOES HERE For additional information on Duke Energy, please visit: duke-energy.com/investors SECOND QUARTER 2023 EARNINGS REVIEW AND BUSINESS UPDATE // 29

  30. Slide 30: Non-GAAP Reconciliations: Adjusted EPS

    Duke Energy Corporation Non-GAAP Reconciliations Second Quarter Earnings Review & Business Update August 8, 2023 Adjusted Earnings per Share (EPS) The materials for Duke Energy Corporation’s (Duke Energy) Second Quarter Earnings Review and Business Update on August 8, 2023, include a discussion of a

  31. Slide 31: Adjusted Segment Income and Adjusted Other Net Loss

    Adjusted Segment Income and Adjusted Other Net Loss The materials for Duke Energy’s Second Quarter Earnings Review and Business Update on August 8, 2023, include a discussion of adjusted segment income and adjusted other net loss for the quarter and year-to-date periods ended June 30, 2023 and a dis

  32. Slide 32: Available Liquidity and FFO Ratio

    Available Liquidity The materials for Duke Energy’s Second Quarter Earnings Review and Business Update on August 8, 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 equiva

  33. Slide 33: Reported to adjusted earnings reconciliation, Three Months Ended June 30, 2023

    DUKE ENERGY CORPORATION REPORTED TO ADJUSTED EARNINGS RECONCILIATION Three Months Ended June 30, 2023 (Dollars in millions, except per share amounts) Reported Discontinued Total Adjusted Earnings Operations Adjustments Earnings SEGMENT INCOME Electric Utilities and Infrastructure $ 850 $ — $ — $ 850

  34. Slide 34: Reported to adjusted earnings reconciliation, Six Months Ended June 30, 2023

    DUKE ENERGY CORPORATION REPORTED TO ADJUSTED EARNINGS RECONCILIATION Six Months Ended June 30, 2023 (Dollars in millions, except per share amounts) Reported Discontinued Total Adjusted Earnings Operations Adjustments Earnings SEGMENT INCOME Electric Utilities and Infrastructure $ 1,641 $ — $ — $ 1,6

  35. Slide 35: Reported to adjusted earnings reconciliation, Three Months Ended June 30, 2022

    DUKE ENERGY CORPORATION REPORTED TO ADJUSTED EARNINGS RECONCILIATION Three Months Ended June 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 and In

  36. Slide 36: Reported to adjusted earnings reconciliation, Six Months Ended June 30, 2022

    DUKE ENERGY CORPORATION REPORTED TO ADJUSTED EARNINGS RECONCILIATION Six Months Ended June 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 and Infr

  37. Slide 37: Effective tax reconciliation

    DUKE ENERGY CORPORATION EFFECTIVE TAX RECONCILIATION June 2023 (Dollars in millions) Three Months Ended Six Months Ended June 30, 2023 June 30, 2023 Effective Tax Effective Tax Balance Rate Balance Rate Reported Income From Continuing Operations Before Income Taxes $ 870 $ 1,995 Noncontrolling Inter

  38. Slide 38: Available Liquidity Reconciliation

    Duke Energy Corporation Available Liquidity Reconciliation As of June 30, 2023 (In millions) Cash and Cash Equivalents $ 405 Less: Certain Amounts Held in Foreign Jurisdictions (7) Less: Unavailable Domestic Cash (108) 290 Plus: Remaining Availability under Master Credit Facilities and other facilit

Duke Energy Corporation (Holding Company) — Q2 2023 Earnings Presentation on 6ix