Duke Energy Corporation (holding Company) · NYSE:DUK
Duke Energy Corporation (holding Company) — Q3 2007 Earnings Presentation
27 slides from Duke Energy Corporation (holding Company)'s earnings presentation, Nov 2, 2007
Slide 1: Third Quarter Earnings Review
Third Quarter Earnings Review November 2, 2007 f iW We =e Stith | "|\ cman, | fi Jim-Rogers. | Chairman, President-and Chief i Officer f ie D vid Hauser. Group Executive and Chief F nancial 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: Earnings Summary
Earnings Summary 3Q07 3Q06 DUK Reported Diluted Earnings per Share $ 0.48 $ 0.60 Special Items - (0.09) Discontinued Operations - (0.22) DUK Ongoing Diluted Earnings per Share $ 0.48 $ 0.29 Increase in ongoing earnings due to improved results at FE&G, Commercial Power and International Increase
Slide 4: U.S. Franchised Electric & Gas
U.S. Franchised Electric & Gas Reported & Ongoing Segment EBIT ($ millions) 3Q07 3Q06 Reported Segment EBIT $ 760 $ 678 Special Items - - Ongoing Segment EBIT $ 760 $ 678 3Q07 segment EBIT increased by $82 million over 3Q06 Increase due primarily to: Favorable weather Cooling degree days wer
Slide 5: Commercial Power
Commercial Power Reported & Ongoing Segment EBIT ($ millions) 3Q07 3Q06 Reported Segment EBIT $ 121 $ 57 Special Items - - Ongoing Segment EBIT $ 121 $ 57 3Q07 segment EBIT improved $64 million over 3Q06 Increase due primarily to: Timing of fuel and purchased power collections Favorable weat
Slide 6: International Energy
International Energy Reported & Ongoing Segment EBIT ($ millions) 3Q07 3Q06 Reported Segment EBIT $ 92 $ 68 Special Items - - Ongoing Segment EBIT $ 92 $ 68 3Q07 segment EBIT increased $24 million compared to 3Q06 Increase primarily due to increased margins in Peru from increased spot prices P
Slide 7: Crescent Resources
Crescent Resources Reported & Ongoing Segment EBIT ($ millions) 3Q07 3Q06 Reported Segment EBIT $ 10 $ 300 Special Items - (246) Ongoing Segment EBIT $ 10 $ 54 3Q07 ongoing segment results declined compared to 3Q06, due primarily to: Lower developed lot and legacy land sales 3Q07 results repre
Slide 8: Other
Other Reported & Ongoing Net Expense ($ millions) 3Q07 3Q06 Reported Net Expense $ 44 $ 151 Special Items 5 (19) Ongoing Net Expense $ 49 $ 132 3Q07 ongoing net expense improved by $83 million, compared to 3Q06 due primarily to lower costs related to captive insurance and reduced corporate governa
Slide 9: Other Items
Other Items Net cash balance of approximately $1.1 billion on 9/30/07 ~$1.6 billion of cash, cash equivalents and short-term investments Net of ~$500 million in short-term commercial paper Interest income and other for the quarter was $73 million, compared to $21 million for 3Q06 Increase
Slide 10: Five-Year Outlook
Five-Year Outlook 5% to 7% ongoing diluted EPS growth through 2012 from 2007 employee incentive target base of $1.15 CapEx from 2008 to 2012 ~$23 billion total $19 billion USFE&G Significant expansion of generation portfolio Proactive regulatory strategy 10
Slide 11: Resolving Regulatory Uncertainty
Resolving Regulatory Uncertainty Activity Comments Status N.C. energy legislation Passed S.C. energy legislation Passed N.C. rate case Pending settlement Ohio RSP Remand order received Ohio energy legislation Working to achieve legislation by early 2008 Cliffside Received CPCN; awaiting
Slide 12: N.C. Rate Case Update
N.C. Rate Case Update Partial settlement filed October 5 11% ROE 53% common equity BPM sharing in N.C. from 50% to 90% N.C. Clean Air Capitalize all expenditures above $1.05 billion • ~$800 million remaining Not expected to have a material impact on earnings Expect Commission order b
Slide 13: Ohio Update
Ohio Update Senate Bill 221 Amended bill provides workable framework for Technology development New generation Environmental improvement Energy efficiency Working to achieve passage by early 2008 RSP remand Order received in October Affirmed existing RSP 13
Slide 14: New Generation Update
New Generation Update Facility / Program Comments Cliffside Final air permit expected 4Q07 IGCC Anticipate order 4Q07 Final air permit expected 1Q08 Buck and Dan River Combined-Cycle* Expect to file CPCN in N.C. 4Q07 Lee Nuclear Station* COL to be filed 4Q07 CPCN in S.C. to be filed in 2
Slide 15: Climate Change
Climate Change Ideal legislation Economy-wide, market-based cap and trade program Safety valve price mechanism Proper allocation of allowances Support development of new technologies Remove barriers to deployment of nuclear energy Lieberman / Warner legislation Does not adequately pr
Slide 16: Commercial Business Update
Commercial Business Update Projecting 8% to 10% CAGR in combined ongoing segment EBIT from 2008 base Strong operational performance Commercial Power Continue to see PJM market tightening Favorable PJM capacity auction pricing Improved performance of Midwest gas-fired plants Internation
Slide 17: Value Proposition
Value Proposition Proactive regulatory strategy Annual Total Return Profile 5% to 7% ongoing diluted EPS 15% growth through 2012 from 2007 employee incentive target base of $1.15 10% Annual dividend growth No anticipated equity offerings 5% through 2012 excluding internal plans (e.g., divide
Slide 18: Slide 18
Slide 19: Non-GAAP Reconciliations Third Quarter 2007 Earnings Review
Duke Energy Corporation Non-GAAP Reconciliations Third Quarter 2007 Earnings Review November 2, 2007 Ongoing Diluted Earnings per Share (“EPS”) The materials for Duke Energy Corporation’s (“Duke Energy”) Third Quarter 2007 Earnings Review include a discussion of ongoing diluted EPS for the three and
Slide 20: Ongoing Segment EBIT and Other Expenses, Net
growth rates, for future periods, information to reconcile such non-GAAP financial measure to the most directly comparable GAAP financial measure is not available at this time, as management is unable to forecast any special items for future periods. Ongoing Segment EBIT and Other Expenses, Net The
Slide 21: Ongoing to Reported Earnings Reconciliation September 2006 Quarter-to-Date
DUKE ENERGY CORPORATION ONGOING TO REPORTED EARNINGS RECONCILIATION September 2006 Quarter-to-Date (Dollars in millions, except per-share amounts) Special Items (Note 1) Gain on Costs to Sale of Achieve, Ongoing Interest in Cinergy Discontinued Total Reported Earnings Crescent Merger Operations Adju
Slide 22: Ongoing to Reported Earnings Reconciliation September 2006 Year-to-Date
DUKE ENERGY CORPORATION ONGOING TO REPORTED EARNINGS RECONCILIATION September 2006 Year-to-Date (Dollars in millions, except per-share amounts) Special Items (Note 1) Gain on Costs to Sale of Impairment Achieve, Ongoing Interest in of Campeche Cinergy Discontinued Total Reported Earnings Crescent In
Slide 23: Ongoing to Reported Earnings Reconciliation December 2006 Quarter-to-date
DUKE ENERGY CORPORATION ONGOING TO REPORTED EARNINGS RECONCILIATION December 2006 Quarter-to-date (Dollars in millions, except per-share amounts) Special Items (Note 1) Adjustment Costs to to Impairment Achieve, Ongoing Settlement of Campeche Cinergy Tax Discontinued Total Reported Earnings Reserves
Slide 24: Ongoing to Reported Earnings Reconciliation December 2006 Year-to-date
DUKE ENERGY CORPORATION ONGOING TO REPORTED EARNINGS RECONCILIATION December 2006 Year-to-date (Dollars in millions, except per-share amounts) Special Items (Note 1) Gain on Costs to Sale of Impairment Achieve, Ongoing Settlement Interest in of Campeche Cinergy Tax Discontinued Total Reported Earnin
Slide 25: Ongoing to Reported Earnings Reconciliation September 2007 Quarter-to-Date
DUKE ENERGY CORPORATION ONGOING TO REPORTED EARNINGS RECONCILIATION September 2007 Quarter-to-Date (Dollars in millions, except per-share amounts) Special Items (Note 1) Costs to Achieve, Settlement Ongoing Cinergy Reserve Discontinued Total Reported Earnings Merger Adjustment Operations Adjustments
Slide 26: Ongoing to Reported Earnings Reconciliation September 2007 Year-to-Date
DUKE ENERGY CORPORATION ONGOING TO REPORTED EARNINGS RECONCILIATION September 2007 Year-to-Date (Dollars in millions, except per-share amounts) Special Items (Note 1) Costs to Convertible Achieve, Settlement Ongoing Debt Costs, Cinergy IT Severance Reserve Discontinued Total Reported Earnings Gas Sp
Slide 27: Net Cash Balance Reconciliation As of September 30, 2007
Duke Energy Corporation Net Cash Balance Reconciliation As of September 30, 2007 (in millions) Cash and Cash Equivalents $675 Short-Term Investments 909 Subtotal 1,584 Short-term Commercial Paper Outstanding (a) (504) Net Cash Balance (b) $1,080 (Approximately $1,100) (a) Excludes approximately $300