Duke Energy Corporation (holding Company) · NYSE:DUK
Duke Energy Corporation (holding Company) — Q2 2022 Earnings Presentation
38 slides from Duke Energy Corporation (holding Company)'s earnings presentation, Aug 4, 2022
Slide 1: Q2 2022 Earnings Review and Business Update
Q2 / 2022 Earnings Review and Business Update Lynn Good / Chair, President and CEO Steve Young / Executive Vice President and CFO August 4, 2022 // 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 $1.14 Q2 2022 REPORTED / ADJUSTED EPS RESULTS DRIVEN BY CONTINUED LOAD GROWTH AND WEATHER $5.30 - $5.60 REAFFIRMING 2022 ADJUSTED EPS GUIDANCE RANGE 5% – 7% REAFFIRMING GROWTH RATE THROUGH 2026 OFF MIDPOINT OF ORIGINAL 2021 GUIDANCE RANGE ($5.15)(1) (1) Based on adjusted EPS //
Slide 5: Strategic update: review of Commercial Renewables business
Strategic update ANNOUNCED STRATEGIC REVIEW OF COMMERCIAL RENEWABLES BUSINESS ▪ Since 2007, Commercial Renewables has been Duke Energy’s primary renewables platform and is among the top 10 largest solar and wind businesses in the U.S. ▪ Given the significant growth outlook for regulated renewables a
Slide 6: Carbon plan update
Carbon plan update CONTINUING TO ADVANCE PROPOSED NEAR-TERM CARBON PLAN FILING RESOURCES ▪ Filed proposed Carbon Plan on May 16, which includes four portfolios to meet 70% interim reduction targets ▪ 3,100 MW of new solar (with ▪ All portfolios replace coal with a diverse mix of resources 600 MW of
Slide 7: Regulatory and policy update
Regulatory and policy update ▪ Expect to file a DE Progress rate case in the North fourth quarter of 2022 and a DE Carolinas rate Carolina case in early 2023 ▪ Filing DE Progress rate case in September South Carolina ▪ Storm cost securitization legislation passed in June ▪ 3 of 4 planned 2022 solar
Slide 8: Federal update - Inflation Reduction Act of 2022
Federal update - Inflation Reduction Act of 2022 CLEAN ENERGY TAX PROVISIONS HELP US MEET CUSTOMER EXPECTATIONS FOR AFFORDABLE, RELIABLE AND CLEAN ENERGY ▪ Customers are the real winner – provides for a more affordable transition ▪ Potential for significant customer benefits from nuclear and renewab
Slide 9: Q2 2022 adjusted EPS summary and primary drivers
Q2 2022 adjusted EPS summary and primary drivers REPORTED SEGMENT RESULTS VS. PRIOR YEAR QUARTER(1) EARNINGS PER SHARE Electric Utilities & Infrastructure, +$23 M (+$0.03 per share) $2.21 $2.22 ▲ Weather ($0.09) $0.96 $1.14 ▲ Retail electric volumes and rate increases ▼ O&M, including timing of plan
Slide 10: Retail electric volumes
Retail electric volumes Q2 2022 RETAIL ELECTRIC VOLUMES(1) Q2 2022 RETAIL LOAD TRENDS Residential 1.7% 1.7% ▪ Customer growth remains robust across our 1.5% territories 1.2% ▪ Remote and hybrid work continues, with office occupancy data well below pre-pandemic levels Commercial and Industrial ▪ NC r
Slide 11: Cost management and second half considerations
Cost management and second half considerations 2022 SHAPING CONSIDERATIONS(1) 2023 RESPONSE TO RISING INTEREST RATES AND INFLATION ▪ Timing of key drivers expected to modify shape of third Pursuing $200 million of cost and fourth quarter earnings vs 2021 mitigation across the enterprise ▪ Growth in
Slide 12: 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 2026 COMMITMENT(2) RETURN(3) CONSTRUCTIVE JURISDICTIONS, LOWER-RISK REGULATED INVESTMEN
Slide 13: Appendix
APPENDIX // 13
Slide 14: ESG Day – tentative agenda
ESG Day – tentative agenda OCTOBER 4, 2022 10am – 12pm, this event will be held virtually ▪ ESG vision and commitments ▪ Enterprise trajectory to a zero-emissions future ▪ Customer focus and grid enablement ▪ Investment plans and maintaining customer affordability ▪ Just transition and stakeholder e
Slide 15: Indiana energy transition
Indiana energy transition TRANSITION TO CLEANER ENERGY WITH FOCUS ON RELIABILITY AND AFFORDABILITY ▪ Submitted 2021 Indiana integrated resource plan (IRP) in December ▪ Preferred portfolio reduces carbon emissions from our Indiana fleet by 63% in 2030 and 88% by 2040, compared to 2005 levels ▪ Key c
Slide 16: Economic development
Economic development OUR COMMUNITIES DEPEND ON ECONOMIC GROWTH, AND WE PLAY AN IMPORTANT ROLE ▪ We work with state and local authorities to promote economic growth in our communities, helping attract investment in jobs ▪ Focused on several key business sectors: Aerospace, data centers, advanced manu
Slide 17: Commercial Renewables data points
Commercial Renewables data points (values as of June 30, 2022) CAPACITY BY REGION AND RESOURCE TYPE Gross MWs Solar Wind Battery Total Texas 658 1,981 36 2,675 West 414 421 - 835 Southwest 54 - - 54 Southeast 400 - - 400 Midwest - 872 2 874 Northeast 25 139 - 164 Total Gross MW 1,688(1) 3,413 38 5,1
Slide 18: 2022 Supplemental Financial Information
2022 SUPPLEMENTAL FINANCIAL INFORMATION // 18
Slide 19: Key 2022 adjusted earnings guidance assumptions
Key 2022 adjusted earnings guidance assumptions ($ in millions) Original 2022 2022 YTD Assumptions (1) (thru 6/30/2022) Adjusted segment income/(expense)(2): Electric Utilities & Infrastructure $4,170 $1,854 Gas Utilities & Infrastructure $470 $273 Commercial Renewables $150 $57 Other ($595) ($300)
Slide 20: Electric utilities quarterly weather impacts
Electric utilities quarterly weather impacts Weather segment 2022 2021 income to normal: Pretax Weighted EPS impact Pretax Weighted EPS impact impact avg. shares favorable / impact avg. shares favorable / (unfavorable) (unfavorable) First Quarter ($33) 770 ($0.03) ($17) 769 ($0.02) Second Quarter $1
Slide 21: Key 2022 earnings sensitivities
Key 2022 earnings sensitivities Driver EPS Impact 1% change in earned return on equity +/- $0.53 $1 billion change in rate base +/- $0.07 Electric Utilities & Infrastructure 1% change in Electric Utilities volumes Industrial +/- $0.02 (2) +/- $0.15(1) (2) Commercial +/- $0.05 (2) Residential +/- $0.
Slide 22: Weather normalized volume trends, by electric jurisdiction
Weather normalized volume trends, by electric jurisdiction Duke Energy Duke Energy Duke Energy Duke Energy Duke Energy Electric Carolinas Progress Florida Indiana Ohio/Kentucky Utilities Rolling Twelve Months, as of June 30, 2022 6.0% 6.1% 5.6% 4.8% 3.9% 3.5% 3.1% 2.7% 2.6% 2.6% 2.1% 1.9% 1.8% 2.1%
Slide 23: Financing plan update and current liquidity
FINANCING PLAN UPDATE AND CURRENT LIQUIDITY // 23
Slide 24: 2022 Financing plan
2022 Financing plan(1) Estimated / Actual Completed Issuer Amount Security Date Issued Term Rate 2022 Maturities(2) ($ in millions) ($ in millions) (3) $1,400 Term Loan March 9, 2022 $1,400 2-year Floating $500 (4) $234 5-year (AMT) 4.25% $402 Tax-Exempt Debt June 2, 2022 (4) $168 5-year (Non-AMT) 4
Slide 25: Liquidity summary (as of June 30, 2022)
Liquidity summary (as of June 30, 2022) ($ 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) $ 3,150 $ 1,225 $ 1,200 $ 1,100 $ 750 $ 600 $ 175 $ 800 $
Slide 26: Upcoming events & other
UPCOMING EVENTS & OTHER // 26
Slide 27: Upcoming events
Upcoming events Event Date ESG Day (10am to noon, Eastern) October 4, 2022 3Q 2022 earnings call (tentative) November 4, 2022 2022 EEI Financial Conference November 13-15, 2022 // 27 SECOND QUARTER 2022 EARNINGS REVIEW AND BUSINESS UPDATE // 27
Slide 28: 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 29: Headline goes here
HEADLINE GOES HERE For additional information on Duke Energy, please visit: duke-energy.com/investors // 29 SECOND QUARTER 2022 EARNINGS REVIEW AND BUSINESS UPDATE
Slide 30: Non-GAAP Reconciliations: Adjusted Earnings per Share
Duke Energy Corporation Non-GAAP Reconciliations Second Quarter Earnings Review & Business Update August 4, 2022 Adjusted Earnings per Share (EPS) The materials for Duke Energy Corporation’s (Duke Energy) Second Quarter Earnings Review and Business Update on August 4, 2022, include a discussion of a
Slide 31: 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 4, 2022, 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 32: Available Liquidity
Available Liquidity The materials for Duke Energy’s Second Quarter Earnings Review and Business Update on August 4, 2022, 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 equiva
Slide 33: Reported to Adjusted Earnings Reconciliation, Three Months Ended June 30, 2022
DUKE ENERGY CORPORATION REPORTED TO ADJUSTED EARNINGS RECONCILIATION Three Months Ended June 30, 2022 (Dollars in millions, except per share amounts) Special Items Reported Regulatory Mark-to- Total Adjusted Earnings Matters Market Adjustments Earnings SEGMENT INCOME Electric Utilities and Infrastru
Slide 34: Reported to Adjusted Earnings Reconciliation, Six Months Ended June 30, 2022
DUKE ENERGY CORPORATION REPORTED TO ADJUSTED EARNINGS RECONCILIATION Six Months Ended June 30, 2022 (Dollars in millions, except per share amounts) Special Items Reported Regulatory Mark-to- Total Adjusted Earnings Matters Market Adjustments Earnings SEGMENT INCOME Electric Utilities and Infrastruct
Slide 35: 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 36: 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 37: Effective Tax Reconciliation
DUKE ENERGY CORPORATION EFFECTIVE TAX RECONCILIATION June 2022 (Dollars in millions) Three Months Ended Six Months Ended June 30, 2022 June 30, 2022 Effective Tax Effective Tax Balance Rate Balance Rate Reported Income Before Income Taxes $ 957 $ 1,763 Regulatory Matters — 257 Mark-to-Market 21 21 N
Slide 38: Available Liquidity Reconciliation as of June 30, 2022
Duke Energy Corporation Available Liquidity Reconciliation As of June 30, 2022 (In millions) Cash and Cash Equivalents $ 428 Less: Certain Amounts Held in Foreign Jurisdictions (7) Less: Unavailable Domestic Cash (57) 364 Plus: Remaining Availability under Master Credit Facilities and other faciliti