Duke Energy Corporation (holding Company) · NYSE:DUK
Duke Energy Corporation (holding Company) — Investor Presentation (June 2004)
31 slides from Duke Energy Corporation (holding Company)'s investor presentation, June 2004
Slide 1: Crescent Resources
Picture(s) here Crescent Resources Art Fields President and CEO June 2004
Slide 2: Safe Harbor Statement
Safe Harbor Statement Under the Private Securities Litigation Act of 1995 This document contains forward looking information which is subject to risks and uncertainties, including, but not limited to, changes in real estate markets, competition, the effect of accounting pronouncements, growth in opp
Slide 3: Charter
Charter We are Duke Energy, a leading energy company located in the Americas with an affiliated real estate operation. 3
Slide 4: Proven Business Plan
Proven Business Plan Crescent delivers disciplined earnings through focus on existing business lines and execution of a proven development strategy without significantly increasing our risk profile. While opportunity-driven, Crescent manages risk and is a consistent provider of earnings and cash flo
Slide 5: Crescent's Strengths
Crescent’s Strengths ● Experienced development team ● Reputation for quality, integrity, honesty and exceeding expectations ● Credibility with: ► Customers ► Regulators ► Partners ► Shareholders ► Competitors ● Financial strength ● Fiscal responsibility 5
Slide 6: Not Just a Liquidator of Land, We Create Value
Not Just a Liquidator of Land, We Create Value Revenues $900 $800 Multifamily Residential $700 Commercial ($ in millions) $600 Land Management $500 $400 $300 $200 $100 $0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Est 6
Slide 7: Basic Strategy in 4 Steps
Basic Strategy in 4 Steps Step 1: Land sales Step 2: Section 1031 exchange and condemnation dollars - warehouse funds or immediately redeploy Step 3: Creating value by development of original and purchased properties Step 4: Harvest value by sale Step 5: Repeat steps 1 through 4 7
Slide 8: Crescent Locations by Product Type
Crescent Locations by Product Type Residential Commercial - Office and ● Charlotte, NC; Hilton Head, SC; Industrial Atlanta, GA; Austin, TX; Payson, AZ; ● Charlotte, NC; Nashville, TN; Jacksonville, FL; Palm Coast, FL; Atlanta, GA; Orlando, FL; St. Mary's, GA Tampa, FL; Washington DC Multi-Family ●
Slide 9: Market Cycles
Market Cycles ● Crescent Resources chooses to diversify because market cycles vary ► By product type ► By geographic location 9
Slide 10: Investment by Product Type
Investment by Product Type 1999 2003 Multi- Commercial Residential 10% Retail 28% Family 15% 15% Commercial Residential 72% 60% 10
Slide 11: Crescent's Portfolio
Crescent’s Portfolio ● High-end, country club developments ► Legacy land ► Purchased land ● Amenitized custom home developments ► Legacy land ► Purchased land ● Tract and superpad development ● Resort golf developments on purchased land ● Suburban mid-rise Class A office buildings ● Warehouse and fl
Slide 12: Commercial Inventory
Commercial Inventory Inventory @ 12/31/03 Sq Ft Total Cost Number (millions) (millions) % Leased Office Buildings 9 1.4 $ 167.2 45% Industrial Buildings 5 0.4 $ 19.7 77% Retail Centers 7 0.4 $ 45.2 58% Total 21 2.2 $ 232.1 53% Projected Inventory @ 12/31/04 10 1.5 $ 230.0 57% York County, SC Tampa,
Slide 13: Crescent's Commercial Development Cycle
Crescent’s Commercial Development Cycle 1 Acquire “path of progress” land with “1031 dollars” 2 Replicate proven building designs 3 Lease aggressively to Class A tenants and provide unequalled property management 4 Hold leased-up buildings until cap rates justify sale 5 Sell and reinvest tax-free vi
Slide 14: Commercial Activity
Commercial Activity 3.5 Sold 3.0 Started Completed Millions of square feet 2.5 2.0 1.5 1.0 0.5 0.0 1999 2000 2001 2002 2003 14
Slide 15: Potomac Yard – Alexandria and Arlington, VA
Potomac Yard – Alexandria and Arlington, VA 15
Slide 16: Potomac Yard – Alexandria and Arlington, VA
Potomac Yard – Alexandria and Arlington, VA ($ in millions) 2003A 2004E Total Total Sales $ 57 $ 181 $ 238 Alexandria Arlington 16
Slide 17: Multi-family
Multi-family Be Duke Energy. [ oa — z= —~ ah lites URLADIEEA8) Of el te rr ne 17
Slide 18: Multi-family Activity
Multi-family Activity ● Crescent began multi-family development in 2000 ● Developed over 1,400 units in four apartment communities in Charlotte, Jacksonville and Tampa ● Sold 453-unit Crosswynde community in Tampa in 2003 for $36 million ● Sold 501-unit Lighthouse Court community in Jacksonville in
Slide 19: Multi-family Inventory
Multi-family Inventory ($ in millions) Inventory @ 12/31/03 Number Units Total Cost Apartment Communities 4 880 $ 75.2 Condominium Properties 1 104 $ 36.2 (1) Total 5 984 $111.4 Projected Inventory @ 12/31/04 Number Units Total Cost Apartment Communities 2 424 $ 32.7 Condominium Properties 1 104 $ 3
Slide 20: Multi-family – Parkside at One Bayshore
Multi-family – Parkside at One Bayshore ● 104 condominium units for sale ● 100 units under contract ● Delivery of initial units: February 2005 20
Slide 21: Crescent Residential Communities
Crescent Residential Communities ● High-End First Home Segment ► The Point – Charlotte (Lake Norman) ► Ballantyne – Charlotte ► Sugarloaf – Atlanta ► The River Club – Atlanta ► Twin Creeks – Austin, TX ● High-End Second Home Segment ► Palmetto Bluff – Bluffton, SC (Hilton Head) ► Oldfield – Beaufort
Slide 22: Residential Inventory
Residential Inventory ($ in millions) Inventory @ 12/31/03 Lots Sales Price High-End First Home Segment 629 $ 77.7 High-End Second Home Segment 381 127.5 LandMar 234 13.9 Total 1,244 $ 219.1 Projected 2004 Sales 1,205 $ 324.0 Projected Inventory @ 12/31/04 High-End First Home Segment 880 $ 109.1 Hig
Slide 23: Residential Marketing Statistics
Residential Marketing Statistics Crescent maintained strong market share in 2003 ● Sold 57% of the total value of homesites with an average price of $50,000 or more in new communities in the greater Charlotte area ● 55% of homes sold over $1,000,000 in the greater Charlotte area were sold in Crescen
Slide 24: Gross Residential Developed Lot Sales
Gross Residential Developed Lot Sales ($ in millions) $300 $250 $200 $150 $100 $50 $0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 24
Slide 25: Palmetto Bluff – Bluffton, SC
Palmetto Bluff – Bluffton, SC 25
Slide 26: Palmetto Bluff – Bluffton, SC
Palmetto Bluff – Bluffton, SC ($ in millions) 2003A 2004E Total Total Sales $ 52 $ 64 $ 116 26
Slide 27: Land Management
Land Management ● Approximately 115,000 remaining acres of legacy land from Duke ● Potential land buyers include governmental entities, real estate developers, recreational enthusiasts, speculative investors and adjoining land owners 27
Slide 28: Land Management – Linville River
Land Management – Linville River 28
Slide 29: Management Philosophy
Management Philosophy ● Build / develop and sell – turn capital ● Maintain experienced development team ● Been through ups and downs of real estate cycles ● Diversify by region and product type ● Market and opportunity driven ● Keep employees fulfilled ► Fulfilled employees satisfy customers ► Satis
Slide 30: Why Crescent Resources?
Why Crescent Resources? ● Crescent is “self-sufficient” in every way; maximum flexibility; a fully-integrated real estate business run by real estate professionals ● Strong earnings and cash flow ● Well capitalized; enhancing land values by use of pre-tax sales proceeds ● Not a consumer of Duke Capi
Slide 31: Duke Energy Corporation Reg G reconciliation
Duke Energy Corporation Reg G reconciliation ($ in millions) Return on Crescent EBIT Annualized Capital Full Year 2003 EBIT Growth Rate Employed Crescent Base Segment EBIT $152 0 - 2% 12% Less discontinued operations (18) Crescent Reported EBIT from continuing operations $ 134 12 - 14% 10%