Duke Energy Corporation (holding Company) · NYSE:DUK
Duke Energy Corporation (holding Company) — Q2 2021 Earnings Presentation
41 slides from Duke Energy Corporation (holding Company)'s earnings presentation, Aug 5, 2021
Slide 1: Q2 2021 Update: Earnings Review and Business Update
Q2 / 2021 UPDATE EARNINGS REVIEW AND BUSINESS Lynn Good / Chair, President and CEO Steve Young / Executive Vice President and CFO August 5, 2021 // 1
Slide 2: Safe Harbor statement and 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 $0.96 / $1.15 Q2 2021 REPORTED / ADJUSTED EPS GROWTH DRIVEN BY CONTINUED STRENGTH IN ELECTRIC UTILITIES $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 SECOND QUARTER
Slide 5: Advancing our clean energy strategy
Advancing our clean energy strategy PASSED 10,000 MEGAWATTS OF FILED OCONEE SUBSEQUENT LICENSE RENEWABLE ENERGY RENEWAL WITH NRC ▪ Duke Energy Sustainable Solutions placed the 182 ▪ Filed an application in June to renew Oconee MW Maryneal wind and 144 MW Pflugerville solar Nuclear Station’s operatin
Slide 6: Regulatory and policy update
Regulatory and policy update NEAR-TERM INITIATIVES ▪ Collaborating with NC policymakers and stakeholders to support the state’s energy Carolinas transition ▪ Advancing IRP process in both states ▪ MYRP order issued in June; advancing grid, Florida solar and EV infrastructure ▪ Actively working with
Slide 7: Q2 2021 EPS summary and primary drivers
Q2 2021 EPS summary and primary drivers REPORTED SEGMENT RESULTS VS. PRIOR YEAR QUARTER(1) ($0.13) EARNINGS PER SHARE $0.47 Electric Utilities & Infrastructure, +$182 M (+$0.24 per share)(2) $2.21 ▲ Contribution from base rate changes ($0.45) ▲ Retail and wholesale electric volumes $0.96 $5.12 ▲ $0.
Slide 8: Retail electric volumes
Retail electric volumes Q2 2021 RETAIL ELECTRIC VOLUMES(1) Q2 2021 RETAIL LOAD TRENDS 11.7% 11.8% ▪ ~15% of workers continue to work from home due to the pandemic(2), supporting elevated residential volumes 6.5% ‒ Customer growth continues to trend above historical averages ▪ Retail and dining, leis
Slide 9: Financing plan update
Financing plan update FINANCING PLAN ON TRACK 15TH CONSECUTIVE YEAR OF DIVIDEND GROWTH ▪ Received CFIUS clearance for DEI minority interest sale in June ‒ Awaiting FERC ruling ▪ No common equity issuances in 5-year plan ▪ NC storm cost securitization of ~$1 billion on track to close this Fall ▪ Issu
Slide 10: Cost management and second half considerations
Cost management and second half considerations BUSINESS TRANSFORMATION CONTINUES TO PRODUCE SUSTAINABLE SAVINGS ▪ Total 2020 O&M mitigation of ~$320 million, of which ~$200 million expected to be sustainable(1) ▪ In 2021, key mitigation drivers include a versatile workforce, enhanced digital capabil
Slide 11: Our investor value proposition
Our investor value proposition A STRONG LONG-TERM RETURN PROPOSITION 3.7% ~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 12: Appendix
APPENDIX // 12
Slide 13: Long-standing history of strong governance driven from diverse Board of Directors
Long-standing history of strong governance driven from diverse Board of Directors FOCUSED ON BOARD COMPOSITION TO OVERSEE THE COMPANY’S LONG-TERM STRATEGY ▪ 9 out of 13 directors were first appointed in the last five years(1) ▪ 12 out of 13 directors are independent (all directors except Chair, Pres
Slide 14: Cost management continues to be a core competency
Cost management continues to be a core competency Sustained savings across all jurisdictions Favorable O&M metrics benefit our customers ▪ Lowered electric utility O&M by $450 million ▪ Rank #2 across various operating metrics since 2016, while growing earnings base $20 billion ▪ O&M efficiency keep
Slide 15: Transmission and distribution investments shaping our grid modernization
Transmission and distribution investments shaping our grid modernization INVESTING OVER $30 BILLION TO MODERNIZE OUR GRID ▪ Enables connectivity of clean energy resources ▪ Improves reliability and resiliency, including storm hardening ▪ Includes targeted investments that support state economic deve
Slide 16: Operational excellence on behalf of our customers
Operational excellence on behalf of our customers SAFETY ▪ Duke Energy was an industry leader for the sixth year in a row - Total incident case rate (TICR) of 0.33 in 2020 ▪ TICR nearly 50% lower (better) than 2013 levels, the first full year after the Progress merger NUCLEAR PERFORMANCE ▪ 22nd cons
Slide 17: 2021 guidance supplemental information
2021 guidance supplemental information // 17
Slide 18: Key 2021 adjusted earnings guidance assumptions
Key 2021 adjusted earnings guidance assumptions ($ in millions) Original 2021 2021 YTD Assumptions (1) (thru 6/30/2021) Adjusted segment income/ (expense) (2): Electric Utilities & Infrastructure $3,900 $1,755 Gas Utilities & Infrastructure $415 $279 Commercial Renewables $220 $74 Other ($575) ($252
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 +/- $0.08 (2) 1% c
Slide 21: Weather normalized volume trends, by electric jurisdiction
Weather normalized volume trends, by electric jurisdiction Duke Energy Duke Energy Duke Energy Duke Energy Duke Energy Electric Carolinas Progress Florida Indiana Ohio/Kentucky Utilities Rolling Twelve Months, as of June 30, 2021 8.8% 2.9% 2.0% 2.3% 2.1% 1.7% 1.6% 1.7% 1.2% 0.3% 0.4% 0.7% 0.2% 0.3%
Slide 22: Financing plan update and current liquidity
Financing plan update and current liquidity // 22
Slide 23: 2021 Financing plan
2021 Financing plan(1) Estimated / Completed 2021 Issuer Actual Amount Security Date Issued Term Rate ($ in millions) Maturities(2) ($ in millions) $500 2-year SOFR + 25 bps $1,000 10-year Fixed – 2.55% $1,750 Holding Company $3,000 Senior Notes June 2021 $750 20-year Fixed – 3.30% (May & Sept) $750
Slide 24: Liquidity summary (as of June 30, 2021)
Liquidity summary (as of June 30, 2021) ($ 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 $ 1,325 $ 1,150 $ 850 $ 600 $ 550 $ 175 $ 700 $ 8
Slide 25: Upcoming Events & Other
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Slide 26: Upcoming events
Upcoming events Event Date 3Q 2021 earnings call (tentative) November 4, 2021 SECOND QUARTER 2021 EARNINGS REVIEW AND BUSINESS UPDATE //// 26 26
Slide 27: 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 LINDA MILLER, MANAGER INVESTOR RELATIONS ▪ Linda.Miller@duke-energy
Slide 28: For additional information on Duke Energy, please visit duke-energy.com/investors
For additional information on Duke Energy, please visit: duke-energy.com/investors SECOND QUARTER 2021 EARNINGS REVIEW AND BUSINESS UPDATE //// 28 28
Slide 29: Non-GAAP Reconciliations: Adjusted Earnings per Share
Duke Energy Corporation Non-GAAP Reconciliations Second Quarter Earnings Review & Business Update August 5, 2021 Adjusted Earnings per Share (EPS) The materials for Duke Energy Corporation’s (Duke Energy) Second Quarter Earnings Review and Business Update on August 5, 2021, include a discussion of a
Slide 30: Adjusted Segment Income (Loss) and Adjusted Other Net Loss
Adjusted Segment Income (Loss) and Adjusted Other Net Loss The materials for Duke Energy’s Second Quarter Earnings Review and Business Update on August 5, 2021, include a discussion of adjusted segment income (loss) and adjusted other net loss for the quarter and year-to- date periods ended June 30,
Slide 31: Net regulated Electric and Gas O&M and effective tax rate
Management believes the presentation of net regulated Electric and Gas O&M provides useful information to investors, as it provides a meaningful comparison of financial performance across periods. The most directly comparable GAAP financial measure for net regulated Electric and Gas O&M is reported
Slide 32: Reported to Adjusted Earnings Reconciliation, Three Months Ended June 30, 2021
DUKE ENERGY CORPORATION REPORTED TO ADJUSTED EARNINGS RECONCILIATION Three Months Ended June 30, 2021 (Dollars in millions, except per share amounts) Special Items Workplace and Reported Gas Pipeline Workforce Total Adjusted Earnings Investments Realignment Adjustments Earnings SEGMENT INCOME Electr
Slide 33: Reported to Adjusted Earnings Reconciliation, Six Months Ended June 30, 2021
DUKE ENERGY CORPORATION REPORTED TO ADJUSTED EARNINGS RECONCILIATION Six Months Ended June 30, 2021 (Dollars in millions, except per share amounts) Special Items Workplace and Reported Gas Pipeline Workforce Total Adjusted Earnings Investments Realignment Adjustments Earnings SEGMENT INCOME Electric
Slide 34: Reported to Adjusted Earnings Reconciliation, Three Months Ended June 30, 2020
DUKE ENERGY CORPORATION REPORTED TO ADJUSTED EARNINGS RECONCILIATION Three Months Ended June 30, 2020 (Dollars in millions, except per share amounts) Special Item Reported Gas Pipeline Total Adjusted Loss Investments Adjustments Earnings SEGMENT INCOME (LOSS) Electric Utilities and Infrastructure $
Slide 35: Reported to Adjusted Earnings Reconciliation, Six Months Ended June 30, 2020
DUKE ENERGY CORPORATION REPORTED TO ADJUSTED EARNINGS RECONCILIATION Six Months Ended June 30, 2020 (Dollars in millions, except per share amounts) Special Items Reported Gas Pipeline Total Adjusted Earnings Investments Severance Adjustments Earnings SEGMENT INCOME (LOSS) Electric Utilities and Infr
Slide 36: Effective Tax Reconciliation June 2021
DUKE ENERGY CORPORATION EFFECTIVE TAX RECONCILIATION June 2021 (Dollars in millions) Three Months Ended Six Months Ended June 30, 2021 June 30, 2021 Effective Tax Effective Tax Balance Rate Balance Rate Reported Income Before Income Taxes $ 734 $ 1,759 Gas Pipeline Investments 16 22 Workplace and Wo
Slide 37: Available Liquidity Reconciliation as of June 30, 2021
Duke Energy Corporation Available Liquidity Reconciliation As of June 30, 2021 (In millions) Cash and Cash Equivalents $ 367 Less: Certain Amounts Held in Foreign Jurisdictions (6) Less: Unavailable Domestic Cash (102) 259 Plus: Remaining Availability under Master Credit Facilities and other facilit
Slide 38: Operations, Maintenance and Other Expense
Duke Energy Corporation Operations, Maintenance and Other Expense (In millions) Actual Actual Actual Actual Actual Forecast(f) December 31, 2016 December 31, 2017 December 31, 2018 December 31, 2019 December 31, 2020 December 31, 2021 Operation, maintenance and other(a) $6,223 $5,944 $6,463 $6,066 $
Slide 39: Duke Energy Carolinas Jurisdictions Operations, Maintenance and Other Expense
Duke Energy - Carolinas Jurisdictions Operations, Maintenance and Other Expense (In millions) Actual Actual Actual Actual Actual Forecast(e) December 31, 2016 December 31, 2017 December 31, 2018 December 31, 2019 December 31, 2020 December 31, 2021 Operation, maintenance and other(a) - Duke Energy C
Slide 40: Duke Energy Florida Operations, Maintenance and Other Expense
Duke Energy - Florida Operations, Maintenance and Other Expense (In millions) Actual Actual Actual Actual Actual Forecast(e) December 31, 2016 December 31, 2017 December 31, 2018 December 31, 2019 December 31, 2020 December 31, 2021 Operation, maintenance and other(a) - Duke Energy Florida $884 $853
Slide 41: Duke Energy Midwest Jurisdictions Operations, Maintenance and Other Expense
Duke Energy - Midwest Jurisdictions Operations, Maintenance and Other Expense (In millions) Actual Actual Actual Actual Actual Forecast(e) December 31, 2016 December 31, 2017 December 31, 2018 December 31, 2019 December 31, 2020 December 31, 2021 Operation, maintenance and other(a) - Duke Energy Ind