Duke Energy Corporation (holding Company) · NYSE:DUK
Duke Energy Corporation (holding Company) — Q1 2021 Earnings Presentation
37 slides from Duke Energy Corporation (holding Company)'s earnings presentation, May 10, 2021
Slide 1: Q1 2021 Earnings Review and Business Update
Q1 / 2021 UPDATE EARNINGS REVIEW AND BUSINESS Lynn Good / Chair, President and CEO Steve Young / Executive Vice President and CFO May 10, 2021 // 1
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
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
Slide 4: Financial highlights
Financial highlights $1.25 / $1.26 Q1 2021 REPORTED / ADJUSTED EPS ELECTRIC UTILITIES KEY GROWTH DRIVER $5.00 - $5.30 REAFFIRMING 2021 ADJUSTED EPS GUIDANCE RANGE 5% – 7% REAFFIRMING GROWTH RATE THROUGH 2025 OFF 2021 MIDPOINT OF $5.15(1) (1) Based on adjusted EPS DELIVERING STRONG RESULTS TO START T
Slide 5: Recent accomplishments provide clarity and momentum
Recent accomplishments provide clarity and momentum ADVANCED STRATEGY WHILE MAINTAINING OPERATIONAL EXCELLENCE ✓ Moved past ACP ✓ Hosted inaugural ESG day, clearly articulating our clean energy transition and investment opportunity ✓ Participated in stakeholder meetings in the Carolinas focused on t
Slide 6: Clear vision for the future – to lead the energy transition
Clear vision for the future – to lead the energy transition Our Clean Energy Transformation ≥50% REDUCTION IN CO2 EMISSIONS AND NET-ZERO METHANE EMISSIONS BY 2030 ON THE WAY TO NET-ZERO CO2 BY 2050 Near-term initiatives Carolinas • Collaborating with NC policymakers Transform the system and stakehol
Slide 7: Making investments to accelerate our pace of change
Making investments to accelerate our pace of change GROWING FIVE-YEAR CAPITAL … AS WE EXECUTE THE LARGEST PLAN DRIVES SIGNIFICANT COAL CLOSURE IN THE INDUSTRY EARNINGS BASE GROWTH… Capex plan $65B - $75B 50 TO 70% $59B REDUCTION IN ACTIVE $56B COAL UNITS BY 2030(1) 2020 – 2024 2021 – 2025 2025 – 202
Slide 8: Leading the way in ESG
Leading the way in ESG ENVIRONMENTAL ▪ Retired Allen coal unit (270 MW, DEC) in NC on March 31, marking 52 units retired since 2010. In IN, accelerating retirement of Gallagher station (280 MW) from Dec. 2022 to June 2021 ▪ 570 MW wind and solar generation placed in service in Q1 ▪ Advancing EV infr
Slide 9: Q1 2021 adjusted EPS summary and primary drivers
Q1 2021 adjusted EPS summary and primary drivers SEGMENT RESULTS VS. PRIOR YEAR QUARTER(1) ($0.13) REPORTED $0.47 EARNINGS PER SHARE Electric Utilities & Infrastructure, +$115 M (+$0.15 per share)(2) $0.47 ▲ Contribution from base rate changes (+$0.10 per share) $1.24 ($0.45) $1.25 $0.45 ▲ Weather (
Slide 10: Retail electric volumes
Retail electric volumes Q1 2021 RETAIL ELECTRIC VOLUMES(1) RESIDENTIAL ▪ Work from home and remote learning continue to drive strong volume results 2.6% ▪ Strongest residential growth trend in the last (1.1%) decade, particularly in the Southeast (2.0%) COMMERCIAL (5.0%) ▪ Winter surge of COVID-19 i
Slide 11: Regulatory calendar and financing plan remain on track
Regulatory calendar and financing plan remain on track SUCCESSFUL EXECUTION OF ACTIVE REGULATORY CALENDAR… ✓ DEC and DEP North Carolina orders received, approving all major settlements − Resolves coal ash recovery issues through early 2030 − Approves deferral of $1.2 billion grid improvement program
Slide 12: 2021 EPS guidance and balance of the year consideration
2021 EPS guidance and balance of the year consideration SHAPING CONSIDERATIONS COMPARED TO 2020 $5.00 - $5.30(1) 2Q21 3Q21 4Q21 Load O&M timing driven by 2020 mitigation efforts ACP -- -- 2021 Guidance Range Other 2020 mitigation timing, -- including tax optimization Q4 2020 storms -- -- ON TRACK TO
Slide 13: Our investor value proposition
Our investor value proposition A STRONG LONG-TERM RETURN PROPOSITION 3.8% ~10% 5 -7% DIVIDEND YIELD(1) ATTRACTIVE zzz LONG-TERM WITH LONG-TERM RISK-ADJUSTED EPS GROWTH(4) DIVIDEND GROWTH TOTAL SHAREHOLDER THROUGH 2025 COMMITMENT(2) RETURN(3) CONSTRUCTIVE JURISDICTIONS, LOWER-RISK REGULATED INVESTMEN
Slide 14: Appendix
APPENDIX // 14
Slide 15: Board of Directors
Board of Directors BOARD DIVERSITY BOARD TENURE Diverse(1) 6 – 10 Years 0 – 5 Years (3 directors) (5 directors) (9 directors) 38% Avg. Diverse Tenure: rep. ~5 years Other 11+ Years (8 directors) (1 directors) New Board Members Name Caroline Dorsa Michael J. Pacilio W. Roy Dunbar Work Retired EVP and
Slide 16: Advancing EV Infrastructure
Advancing EV Infrastructure ▪ Investing $100M to support decarbonization of the transportation sector across the Southeast. Approved programs include: ▪ FL: building 700 charging stations by 2026 (590 in service) ▪ NC pilot: building 310 charging stations by 2023 ▪ SC pilot: building 60 charging sta
Slide 17: 2020 performance and 2021 guidance supplemental information
2020 performance and 2021 guidance supplemental information // 17
Slide 18: Key 2021 adjusted earnings guidance assumptions
Key 2021 adjusted earnings guidance assumptions ($ in millions) Original 2021 2021 YTD Assumptions (1) (thru 3/31/2021) Adjusted segment income/ (expense) (2): Electric Utilities & Infrastructure $3,900 $820 Gas Utilities & Infrastructure $415 $250 Commercial Renewables $220 $27 Other ($575) ($139)
Slide 19: Electric utilities quarterly weather impacts
Electric utilities quarterly weather impacts Weather segment 2021 2020 income to normal: Pretax Weighted EPS impact Pretax Weighted EPS impact impact avg. shares favorable / impact avg. shares favorable / (unfavorable) (unfavorable) First Quarter ($17) 769 ($0.02) ($110) 734 ($0.11) Second Quarter (
Slide 20: Key 2021 earnings sensitivities
Key 2021 earnings sensitivities Driver EPS Impact 1% change in earned return on equity +/- $0.55 $1 billion change in rate base +/- $0.06 Electric Utilities & Infrastructure 1% change in retail volumes: Industrial +/- $0.02 (2) +/- $0.15(1) (2) Commercial +/- $0.05 (2) Residential +/- $0.08 (2) 1% c
Slide 21: Weather normalized volume trends, by electric jurisdiction
Weather normalized volume trends, by electric jurisdiction Duke Energy Duke Energy Duke Energy Duke Energy Duke Energy Electric Carolinas Progress Florida Indiana Ohio/Kentucky Utilities Rolling Twelve Months, as of Mar. 31, 2021 5.0% 4.6% 3.7% 4.0% 3.3% 3.5% 2.7% -0.8% -1.9% -2.6% -2.5% -3.2% -3.9%
Slide 22: Regulatory update
Regulatory update NC RATE CASE ORDERS – DUKE ENERGY FLORIDA LDC RATE CASES FILINGS DEC AND DEP SETTLEMENT PIEDMONT-NC/DEK ▪ Approved Partial Stipulations: ▪ FPSC approved the Settlement on PNG-NC RATE CASE FILING − ROE of 9.6%; 52% equity May 4 ▪ Filed on March 22, 2021 component of cap structure ▪
Slide 23: Recent strategic decisions have been in the best interest of shareholders
Recent strategic decisions have been in the best interest of shareholders 2016 PIEDMONT ACQUISITION HAS … AND GOOD FOR PIEDMONT BEEN GOOD FOR SHAREHOLDERS… CUSTOMERS 772 Satisfaction Scores Rate Base 18% $6.1 45 pt ($B) Customer CAGR increase $3.2 727 2016 2020 2016 2020 $1.34 $1.23 Avg Customer Rat
Slide 24: Financing plan update and current liquidity
Financing plan update and current liquidity // 24
Slide 25: 2021 Financing plan
2021 Financing plan(1) Estimated / Completed 2021 Issuer Actual Amount Security Date Issued Term Rate ($ in millions) Maturities(2) ($ in millions) $1,750 Holding Company $2,750 – $3,250 - - - - - (May & Sept) $550 10-year Fixed – 2.55% $500 DE Carolinas $900 - $1,100 First Mortgage Bonds April 2021
Slide 26: Liquidity summary (as of March 31, 2021)
Liquidity summary (as of March 31, 2021) ($ in millions) Duke Duke Duke Duke Duke Duke Piedmont Duke Energy Energy Energy Energy Energy Energy Natural Energy Carolinas Progress Florida Indiana Ohio Kentucky Gas Total Master Credit Facility (1) $ 2,650 $ 1,475 $ 1,250 $ 700 $ 600 $ 450 $ 175 $ 700 $
Slide 27: Upcoming Events & Other
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Slide 28: Upcoming events
Upcoming events Event Date 2Q 2021 earnings call (tentative) August 5, 2021 3Q 2021 earnings call (tentative) November 4, 2021 FIRST QUARTER 2021 EARNINGS REVIEW AND BUSINESS UPDATE //// 28 28
Slide 29: Investor relations contact information
Investor relations contact information JACK SULLIVAN, VICE PRESIDENT INVESTOR RELATIONS ▪ Jack.Sullivan@duke-energy.com ▪ (980) 373-3564 CHRIS JACOBI, DIRECTOR INVESTOR RELATIONS ▪ Christopher.Jacobi@duke-energy.com ▪ (704) 382-8397 ABBY MOTSINGER, MANAGER INVESTOR RELATIONS ▪ Abby.Motsinger@duke-en
Slide 30: For additional information on Duke Energy, please visit duke-energy.com/investors
For additional information on Duke Energy, please visit: duke-energy.com/investors FIRST QUARTER 2021 EARNINGS REVIEW AND BUSINESS UPDATE //// 30 30
Slide 31: Non-GAAP Reconciliations
Duke Energy Corporation Non-GAAP Reconciliations First Quarter Earnings Review & Business Update May 10, 2021 Adjusted Earnings per Share (EPS) The materials for Duke Energy Corporation’s (Duke Energy) First Quarter Earnings Review and Business Update on May 10, 2021, include a discussion of adjuste
Slide 32: Adjusted Segment Income (Loss) and Adjusted Other Net Loss
Adjusted Segment Income (Loss) and Adjusted Other Net Loss The materials for Duke Energy’s First Quarter Earnings Review and Business Update on May 10, 2021, include a discussion of adjusted segment income (loss) and adjusted other net loss for the quarter ended March 31, 2021 and a discussion of 20
Slide 33: Available Liquidity
Available Liquidity The materials for Duke Energy’s First Quarter Earnings Review and Business Update on May 10, 2021, 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 equivale
Slide 34: Reported to Adjusted Earnings Reconciliation, Three Months Ended March 31, 2021
DUKE ENERGY CORPORATION REPORTED TO ADJUSTED EARNINGS RECONCILIATION Three Months Ended March 31, 2021 (Dollars in millions, except per share amounts) Special Item Reported Gas Pipeline Total Adjusted Earnings Investments Adjustments Earnings SEGMENT INCOME Electric Utilities and Infrastructure $ 82
Slide 35: Reported to Adjusted Earnings Reconciliation, Three Months Ended March 31, 2020
DUKE ENERGY CORPORATION REPORTED TO ADJUSTED EARNINGS RECONCILIATION Three Months Ended March 31, 2020 (Dollars in millions, except per share amounts) Special Item Reported Total Adjusted Earnings Severance Adjustments Earnings SEGMENT INCOME Electric Utilities and Infrastructure $ 705 $ — $ — $ 705
Slide 36: Effective Tax Reconciliation
DUKE ENERGY CORPORATION EFFECTIVE TAX RECONCILIATION March 2021 (Dollars in millions) Three Months Ended March 31, 2021 Effective Tax Balance Rate Reported Income Before Income Taxes $ 1,025 Exit Obligations for Gas Pipeline Investments 6 Noncontrolling Interests 51 Preferred Dividends (39) Pretax I
Slide 37: Available Liquidity Reconciliation as of March 31, 2021
Duke Energy Corporation Available Liquidity Reconciliation As of March 31, 2021 (In millions) Cash and Cash Equivalents $ 379 Less: Certain Amounts Held in Foreign Jurisdictions (4) Less: Unavailable Domestic Cash (134) 241 Plus: Remaining Availability under Master Credit Facilities and other facili