Duke Energy Corporation (Holding Company) · NYSE:DUK
Duke Energy Corporation (Holding Company) — Q1 2015 Earnings Presentation
43 slides from Duke Energy Corporation (Holding Company)'s earnings presentation, May 1, 2015
Slide 1: Earnings Review and Business Update, First Quarter 2015
Earnings Review and Business Update May 1, 2015 | First Quarter 2015 Lynn Good, President and CEO | Steve Young, Executive VP and CFO
Slide 2: Safe Harbor
Safe Harbor 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 t
Slide 3: Topics for today's call
Topics for today’s call First quarter 2015 highlights Update on strategic and regulatory initiatives 1Q 2015 adjusted diluted EPS drivers Update on Brazil generation & market conditions Economic conditions and retail customer load growth trends Mechanics of the Accelerated Stock Repurcha
Slide 4: First quarter 2015 highlights
First quarter 2015 highlights 1Q 2015 Financial Update Operational performance Achieved 1Q 2015 adjusted diluted EPS of $1.24 Set new all-time system peak demand in the Carolinas Strong earnings in Regulated Utilities and Achieved record generation for the regulated natural Commercial Power,
Slide 5: First quarter 2015 highlights, cont'd
First quarter 2015 highlights, cont’d Update on Generation Growth Initiatives Strategic & Regulatory Initiatives $1.2 billion NCEMPA asset acquisition on track to Closed sale of MW Generation businesses for close in 2015 $2.8 billion North Carolina legislation (SB 305) was passed Executed th
Slide 6: 1Q 2015 adjusted diluted EPS summary and primary drivers
1Q 2015 adjusted diluted EPS summary and primary drivers 2015 Adjusted Diluted EPS Segment results vs. prior year quarter(1) Regulated utilities, +$37 M (+$0.05 per share) ▲ Wholesale net margins $1.24 ▲ Favorable rider adjustments, including energy efficiency $1.17 ▼ Higher O&M expenses ▼ Lower wea
Slide 7: Brazil Generation & Market Update
Brazil Generation & Market Update Primary factors impacting our results in Brazil Brazil – Net Hydro and Thermal Generation (System wide GW) Beginning in 2Q’14, the dispatch order changed 14 with thermal dispatching ahead of hydro 42 46 50 42 40 – Expect this to continue throughout 2015 – Hydro th
Slide 8: Regulated Utilities weather-normal volume trends
Regulated Utilities weather-normal volume trends Residential Rolling 12 Month Retail Sales Growth (1) ~1.2% growth in average number of customers; offset by lower usage per customer due to: 1.2% 0.2% – Changes in energy efficiency and conservation – Polar Vortex impact in 2014 -0.2% – Higher use o
Slide 9: Duke Energy commences $1.5 billion Accelerated Stock Repurchase program (ASR)
Duke Energy commences $1.5 billion Accelerated Stock Repurchase program (ASR) Start Date Settlement Date April 6, 2015 Daily Volume weighted average price (VWAP) of Duke Energy Common Stock By the end of 3Q 2015 from start date to final settlement Duke paid $1.5bn to banks Banks must finish Du
Slide 10: Financial objectives
Financial objectives Current year Long-term Balance Dividend earnings earnings sheet growth guidance growth strength – Achieve 2015 earnings – Deliver earnings – Continue growing – Maintain strong, per share within per share growth of the dividend within investment-grade guidance range of 4 - 6% (1)
Slide 11: Appendix materials
Appendix materials Item Slides Update on Key 2015 Assumptions 12-14 1Q 2015 Supplemental Data 15-19 Regulatory Proceedings 20-22 Update on Brazil Operations 23-26 Financial Supplement 27-31 Other Information 32-35 11 | First Quarter 2015 Earnings Review and Business Update
Slide 12: Update on Key 2015 Assumptions
Update on Key 2015 Assumptions 12 | First Quarter 2015 Earnings Review and Business Update
Slide 13: Key 2015 adjusted earnings guidance assumptions
Key 2015 adjusted earnings guidance assumptions ($ in millions) Original 2015 2015 YTD assumptions (1) (thru 3/31/2015) Adjusted segment income / (expense) (2): Regulated Utilities $2,950 $774 International Energy $345 $36 Commercial Power $185 (4) $95 Other ($220) ($24) Duke Energy Consolidated $3,
Slide 14: Key 2015 earnings sensitivities
Key 2015 earnings sensitivities Driver Full-Year EPS Impact Regulated Utilities 100 bps change in earned return on equity +/- $0.40 $1 billion change in rate base +/- $0.08 1% change in Regulated Utilities volumes +/- $0.10 International 10% change in BRL/US$ foreign exchange rate* +/- $0.02 - 0.03
Slide 15: 1Q 2015 Supplemental Data
1Q 2015 Supplemental Data 15 | First Quarter 2015 Earnings Review and Business Update
Slide 16: Weather normalized volume trends, by jurisdiction
Weather normalized volume trends, by jurisdiction Rolling Twelve Months, as of 3/31/2015 Duke Energy Duke Energy Duke Energy Duke Energy Duke Energy Regulated Carolinas Progress Florida Indiana Ohio/Kentucky Utilities 3.9% 3.2% 2.2% 1.5% 1.5% 1.2% 0.4% 0.3% 0.1% 0.2% -0.2% -0.1% -0.1% -0.2% -0.5% -0
Slide 17: Regulated Utilities quarterly weather impacts
Regulated Utilities quarterly weather impacts Weather segment 2015 2014 income to normal: Pretax impact Weighted avg. EPS impact – Pretax impact Weighted avg. EPS impact – diluted shares favorable / diluted shares favorable / (unfavorable) (unfavorable) First Quarter 110 708 $0.10 $100 706 $0.09 Sec
Slide 18: Fuel and Joint Dispatch savings update
Fuel and Joint Dispatch savings update Fuel and Joint Dispatch (JDA) Savings Quarterly Savings Results ($ in millions) Guaranteed $687 million in fuel and joint $50 $600 dispatch savings to Carolinas customers over $500 $40 5 years (1) $400 – Cumulative savings of ~$490 million $30 through 1Q 2015 $
Slide 19: Nuclear KPIs by year
Nuclear KPIs by year Top Quartile Second Quartile Third Quartile Fourth Quartile Our goal is to achieve top-quartile performance in each KPI (1) Represents full-year combined Duke Energy and Progress Energy results 19 | First Quarter 2015 Earnings Review and Business Update
Slide 20: Regulatory Proceedings
Regulatory Proceedings 20 | First Quarter 2015 Earnings Review and Business Update
Slide 21: Open Major Regulatory Proceedings
Open Major Regulatory Proceedings Entity Filing Docket Status Intervener Staff Filing Evidentiary Expected number filings Hearings Order Indiana IGCC-11 43114-IGCC 11 Fully briefed, awaiting order Oct. 31, 2013 Oct. 31, 2013 Dec. 17, 2013 3Q 2015 Indiana IGCC-12 43114-IGCC 12 Post hearing briefs in
Slide 22: Edwardsport IGCC rider summary
Edwardsport IGCC rider summary Six-Month Revenue Tracker Costs Thru (1) Rates Effective Status Requirement IGCC-1 Feb. 2008 Jan. 2009 Approved $ 8 million IGCC-2 Sept. 2008 May 2009 Approved $ 17 million IGCC-3 Mar. 2009 Dec. 2009 Approved $ 27 million IGCC-4 Sept. 2009 July 2010 Approved $ 49 milli
Slide 23: Update on Brazil Operations
Update on Brazil Operations 23 | First Quarter 2015 Earnings Review and Business Update
Slide 24: Illustrative Brazilian Generation Dispatch and Demand Reduction
Illustrative Brazilian Generation Dispatch and Demand Reduction Normal Conditions vs. Dry Conditions Total Brazil System Dispatch (GW Average) Normal reservoir 10 5 conditions with limited need for thermal generation 65 60 Reduction in 55 55 demand impacts thermal generation Normal reservoir Demand
Slide 25: Effects of Conservation Measures on the Brazilian Assets
Effects of Conservation Measures on the Brazilian Assets Normal Conditions Voluntary Conservation Formal Conservation Reduction in Reduced allocated contracted energy energy … … 65.000 48.000 48.000 43.000 Contracts Hydro Gen. Annual Long Contracts 2.000 Hydro Gen. Annual Short 2.000 Contracts Hydro
Slide 26: Brazil's reservoir levels – SE region
Brazil’s reservoir levels – SE region 90 80 Reservoir Level (% Maximum Volume) 70 60 50 43.2 40.3 38.8 37.4 40 34.6 36.3 36.3 28.5 30 33.5 34.4 30.3 25.3 19.4 20.6 19.4 16.8 20 16.0 18.7 10 0 Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2001 2012 2014 2015 2015 [EST] Reservoir levels are be
Slide 27: Financial Supplement
Financial Supplement 27 | First Quarter 2015 Earnings Review and Business Update
Slide 28: 2015 financing plan (as of May 1, 2015)
2015 financing plan (as of May 1, 2015) (1) ($ in millions) $1,200 $1,000 $800 $600 $400 $200 $- Holding Duke Duke Duke Duke Duke Duke Renewables International Company Energy Energy Energy Energy Energy Energy Carolinas Progress Florida Indiana Ohio Kentucky 2015 Maturities & Debt Reduction Expected
Slide 29: Access to capital – 2015 long-term debt financing activity
Access to capital – 2015 long-term debt financing activity Amount Credit Ratings ($ in Entity Date Issued Term Type Rate (M/S&P/F) millions) $500 DE Carolinas March 2015 Aa2/A/A+ 30 Year First Mortgage Bond Fixed – 3.75% 29 | First Quarter 2015 Earnings Review and Business Update
Slide 30: Liquidity summary (as of March 31, 2015)
Liquidity summary (as of March 31, 2015) ($ in millions) Duke Duke Duke Duke Duke Duke Duke Energy Energy Energy Energy Energy Energy Energy Carolinas Progress Florida Indiana Ohio Kentucky Total Master Credit Facility (1) $ 3,200 $ 1,200 $ 1,000 $ 900 $ 600 $ 475 $ 125 $ 7,500 Less: Notes payable a
Slide 31: Credit ratings (as of May 1, 2015)
Credit ratings (as of May 1, 2015) Holding companies Operating companies Fitch Moody's S&P Fitch Moody's S&P DUKE ENERGY Stable Stable Stable DUKE ENERGY CAROLINAS Positive Stable Stable Corporate Credit / Issuer Rating BBB+ A3 A- Senior Secured Debt A+ Aa2 A Senior Unsecured Debt BBB+ A3 BBB+ Senio
Slide 32: Other Information
Other Information 32 | First Quarter 2015 Earnings Review and Business Update
Slide 33: Ash Basins: Dedicated company website
Ash Basins: Dedicated company website Visit: www.duke-energy.com/ash-management for up-to-date information 33 | First Quarter 2015 Earnings Review and Business Update
Slide 34: Investor Relations App
Investor Relations App Free mobile app for Investor Relations materials now available for iPhone, iPad, and Android mobile devices The Duke Energy app provides mobile access to commonly used IR materials, including: – SEC Filings – Earnings Materials – Company Presentations – Press Releases Se
Slide 35: Upcoming events
Upcoming events Event Date 2Q 2015 earnings call (tentative) August 6, 2015 3Q 2015 earnings call (tentative) November 5, 2015 35 | First Quarter 2015 Earnings Review and Business Update
Slide 36: For additional information on Duke Energy, please visit
For additional information on Duke Energy, please visit: www.duke-energy.com/investors 36 | First Quarter 2015 Earnings Review and Business Update
Slide 37: Non-GAAP Reconciliations: Adjusted Diluted EPS
Duke Energy Corporation Non-GAAP Reconciliations First Quarter Earnings Review & Business Update May 1, 2015 Adjusted Diluted Earnings per Share (EPS) The materials for Duke Energy Corporation’s (Duke Energy) First Quarter Earnings Review and Business Update on May 1, 2015 include a discussion of ad
Slide 38: Non-GAAP Reconciliations (continued)
possible such charges and credits could recur. Mark-to-market adjustments reflect the impact of derivative contracts, which are used in Duke Energy’s hedging of a portion of the economic value of its generation assets in the Commercial Power segment. The mark-to-market impact of derivative contracts
Slide 39: Non-GAAP Reconciliations: Adjusted ETR and Dividend Payout Ratio
and the mark-to-market impacts of economic hedges in the Commercial Power segment. The most directly comparable GAAP measure for adjusted ETR is reported effective tax rate, which includes the impact of special items and the mark-to-market impacts of economic hedges in the Commercial Power segment.
Slide 40: Adjusted to Reported Earnings Reconciliation, Three Months Ended March 31, 2015
DUKE ENERGY CORPORATION ADJUSTED TO REPORTED EARNINGS RECONCILIATION Three Months Ended March 31, 2015 (Dollars in millions, except per-share amounts) Special Items Costs to Achieve, Midwest Adjusted Progress Generation Discontinued Total Reported Earnings Merger Operations Operations Adjustments Ea
Slide 41: Adjusted to Reported Earnings Reconciliation, Three Months Ended March 31, 2014
DUKE ENERGY CORPORATION ADJUSTED TO REPORTED EARNINGS RECONCILIATION Three Months Ended March 31, 2014 (Dollars in millions, except per-share amounts) Special Items Costs to Economic Achieve, Midwest Hedges Adjusted Progress Asset Generation (Mark-to- Discontinued Total Reported Earnings Merger Impa
Slide 42: Adjusted Effective Tax Reconciliation, Three Months Ended March 31, 2015
DUKE ENERGY CORPORATION ADJUSTED EFFECTIVE TAX RECONCILIATION Three Months Ended March 31, 2015 (Dollars in millions) Three Months Ended March 31, 2015 Balance Effective Tax Rate Adjusted Earnings, Pre-Tax Income* $ 1,308 Costs to Achieve, Progress Energy Merger (21) Midwest Generation Operations (1
Slide 43: Available Liquidity Reconciliation as of March 31, 2015
Duke Energy Corporation Available Liquidity Reconciliation As of March 31, 2015 (In millions) Cash and Cash Equivalents $ 2,821 Less: Certain Amounts Held in Foreign Jurisdictions (393) Less: Unavailable Domestic Cash (98) 2,330 Plus: Remaining Availability under Master Credit Facility 4,062 Total A