Duke Energy Corporation (Holding Company) · NYSE:DUK
Duke Energy Corporation (Holding Company) — Debt Investor Presentation (February 2003)
15 slides from Duke Energy Corporation (Holding Company)'s debt investor presentation, Feb 28, 2003
Slide 1: Monthly Chat
Monthly Chat David Hauser Senior Vice President and Treasurer February 28, 2003
Slide 2: Today's Topics
Today’s Topics Q Q Review financing nodes of Duke Energy Q Q Discuss ratings of various financing nodes Q Q Review 2003 cash flow projections O O Asset dispositions O O Financing plan Q Q Discuss outstanding credit facilities and provide liquidity update Q Q Review 2004 conversion of equity units
Slide 3: Key Goals
Key Goals Duke Energy is focused on reducing risks and restructuring for future success: O O Focus on positive net cash generation O Invest in our strongest business sectors O O O Right-size businesses to market realities O Address merchant energy issues O O O Strengthen relationships with customers
Slide 4: Financing Nodes
Financing Nodes Corporate credit ratings for corporate debt and/or CP Duke Energy Corporate credit rating for trading and marketing activities Duke Capital Duke Duke Energy Gas Field Ventures North America Transmission Services X Duke Energy X Texas Eastern X Duke Energy Trading & Marketing Transmis
Slide 5: Current Credit Ratings
Current Credit Ratings S&P Moody's Fitch Duke Energy Negative Outlook Negative Outlook Negative Outlook Senior Unsecured / Commercial Paper A- / A-2 A3 / P-2 A- / F2 Duke Capital Negative Outlook Negative Outlook Negative Outlook Senior Unsecured / Commercial Paper BBB+ / A-2 Baa2 / P-2 BBB / F2 Tex
Slide 6: 2003 Cash Flow Expectations
2003 Cash Flow Expectations ($ Millions) Duke Energy Duke Capital Primary Sources: Consolidated Consolidated Income $ 1,400 $ 750 Depreciation & Amortization 1,900 1,100 NBV of Crescent inventory sales 500 500 NBV of other asset sales 600 600 Subtotal 4,400 2,950 Equity (DRIP, etc) 250 250 Total Sou
Slide 7: Cash Flow Discussion
Cash Flow Discussion Q Q Consistent cash flows produced from the regulated businesses, delivering approximately 80% of total earnings before interest and taxes (EBIT) in 2003: O O Franchised Electric $ 1.6 billion O O Natural Gas Transmission 1.2 billion Q Q Interest Expense O O Duke Energy Consolid
Slide 8: Asset Dispositions
Asset Dispositions Q Q Almost half of expected $600 million in non-strategic asset sales are complete O O Empire State Pipeline $240 million (includes $58 million in debt) O Sale of Northern Border units and portion of Duke O Capital Partners’ loan portfolio resulted in approximately $50 million of
Slide 9: Financing Plan
Financing Plan Q Q Reduce leverage in 2003 O O Plan to refinance some of our $1.3 billion of debt maturities and reduce the size of our commercial paper programs Q Q Issued $500 million 3.75% 5-year First Mortgage Bonds at Duke Energy to refund $100 million of bonds that matured in early February, t
Slide 10: Liquidity Position
Liquidity Position (as of February 26, 2003) Duke Duke Energy Capital Other * Credit Facilities $950 million $1.9 billion $1.7 billion LOC Facilities n/a $1.0 billion n/a TOTAL CAPACITY $5.6 billion CP Outstanding $650 million $800 million $475 million LOC Outstanding n/a $800 million n/a Other Borr
Slide 11: Credit Facilities
Credit Facilities Q Q Key credit facility covenants O O Duke Energy – 65% Debt to Capitalization O O Duke Capital X X 65% 65% Debt Debt to to Capitalization Capitalization X X Adjusted Adjusted EBITDA EBITDA // Interest Interest Coverage Coverage ratio ratio of of 2.5 2.5 times times (EBITDA (EBITDA
Slide 12: 2004 Conversion of Equity Units
2004 Conversion of Equity Units With Without Remarketing Remarketing Debt Component of No Impact $1.6 billion Equity Units Other Debt (1) $1.6 billion No Impact Equity $1.6 billion $1.6 billion (1) Cash proceeds from successful remarketing of debt component of equity units gives the company the flex
Slide 13: Adjusted Capitalization Reflects Conversion of Equity Units
Adjusted Capitalization Reflects Conversion of Equity Units ($ Millions) 12/31/2002 Adjusted (2) Debt (1) $ 20,840 51% $ 20,840 51% Equity Units 1,625 4% -- -- Total Debt $ 22,465 55% $ 20,840 51% Trust Preferred Securities 1,408 3% 1,408 3% Preferred Stock (1) 159 -- 159 -- Minority Interests 1,904
Slide 14: Summary
Summary The 2003 Financial Plan will: Q Q Generate positive net cash flow Q Reduce balance sheet leverage Q Q Q Maintain a strong liquidity position for the company Q Fully support the annual dividend at $1.10 per share Q
Slide 15: Q&A
Q&A
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