Duke Energy Corporation (holding Company) · NYSE:DUK
Duke Energy Corporation (holding Company) — Merger or Acquisition (January 2011)
35 slides from Duke Energy Corporation (holding Company)'s merger presentation, Jan 10, 2011
Slide 1: Creating the Leading U.S. Utility
CREATING THE LEADING U.S. UTILITY Exhibit 99.2 OH KY NC SC FL
Slide 2: Safe Harbor
Creating the Leading U.S. Utility – Safe Harbor
Slide 3: Safe Harbor (cont'd): Additional Information and Where to Find It
Creating the Leading U.S. Utility – Safe Harbor (cont’d) ADDITIONAL INFORMATION AND WHERE TO FIND IT This document does not constitute an offer to sell or the solicitation of an offer to buy any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any j
Slide 4: Safe Harbor (cont'd): Reg G Disclosure
Creating the Leading U.S. Utility – Safe Harbor (cont’d) REG G DISCLOSURE In addition, today's discussion includes certain non-GAAP financial measures as defined under SEC Regulation G. A reconciliation of those measures to the most directly comparable GAAP measures is available on our Investor Rela
Slide 5: Agenda
Creating the Leading U.S. Utility – Agenda Transaction Overview Company Highlights Financial Summary Closing
Slide 6: Transaction Overview
Creating the Leading U.S. Utility – Transaction Overview
Slide 7: Compelling Strategic Transaction
Overall Strategic Benefits Creating the Leading U.S. Utility – Compelling Strategic Transaction Creates largest U.S. utility, supported by substantial, diversified regulated earnings and cash flows Unmatched financial and operational scale, scope and strength Principally regulated earnings base supp
Slide 8: Compelling Strategic Transaction (cont'd)
Investor Benefits Management Expertise Customer Benefits Creating the Leading U.S. Utility – Compelling Strategic Transaction (cont’d) Earnings accretive in year one Attractive total shareholder return proposition supported by strong dividend Maintain Duke Energy dividend and policy Significant rate
Slide 9: Creating the Largest U.S. Utility
Diverse Service Territories Combined Statistics IN NC Creating the Leading U.S. Utility – Creating the Largest U.S. Utility The combined company will create the largest U.S. utility, with unmatched scale and scope Enterprise Value $40.2 B $25.1 B $65.3 B #1 Market Cap. $23.6 B $12.8 B $36.5 B #1 Ele
Slide 10: Key Transaction Terms
Timing/Approvals Headquarters Consideration Pro Forma Ownership Governance Company Name Key Transaction Terms Following shareholder vote and regulatory approvals, targeting closing transaction by end of 2011 Corporate: Charlotte; significant presence in Raleigh Utilities: No change 100% stock 2.6125
Slide 11: Duke Energy Transaction Rationale
Transaction Rationale Progress Energy at a Glance NC FL Duke Energy Transaction Rationale Investor and strategic benefits EPS accretive in year one¹ Creates unmatched financial and operational scale, scope and strength Poised for strong growth and economic recovery Expanded U.S. regulated earnings b
Slide 12: Progress Energy Transaction Rationale
Transaction Rationale Duke Energy at a Glance IN Progress Energy Transaction Rationale ¹ Premium expressed relative to unaffected Progress Energy 1/05/2011 closing share price of $43.39. The premium to the Progress Energy 1/07/2011 closing share price of $44.72 is 3.9%. ² Based on adjusted diluted E
Slide 13: Highly Experienced Leadership Team
Bill Johnson President & CEO Lynn Good Chief Financial Officer Mark Mulhern Chief Administrative Officer Keith Trent Commercial Businesses Jennifer Weber Chief Human Resources Officer Dhiaa Jamil Nuclear Generation John McArthur Regulated Utilities Marc Manly General Counsel Jeff Lyash Energy Supply
Slide 14: Indicative Timeline to Close and Regulatory Approvals
Q1 2011 Q2 2011 Q3 2011 Q4 2011 Indicative Timeline to Close and Regulatory Approvals Merger announcement Make regulatory filings North Carolina, South Carolina, U.S. DOJ, FERC, and NRC File joint proxy statement Secure appropriate state and federal regulatory approvals Duke Energy and Progress Ener
Slide 15: Company Highlights
Pe eietyy. SE Progress Energy
Slide 16: The Leading U.S. Utility
Enterprise Value ($ B) Market Capitalization ($ B) Capacity Owned (GW) 16.0 21.8 23.7 24.9 25.6 27.9 28.3 37.0 42.7 42.9 35.4 57.2 PF DUK SO NEE AEP DUK CPN ETR D EXC FE/AYE PGN PEG $23.6 $24.9 $25.1 $32.5 $33.6 $35.0 $37.8 $40.2 $41.5 $41.6 $65.3 $52.7 PF DUK SO D NEE DUK EXC AEP FE/AYE PCG PGN PEG
Slide 17: Attractive, Diversified Operations
Customer Diversity: 7.1 M regulated customers Rate Base Diversity: $40 B NC Diverse Service Territories IN By Type: 235 TWh By Geography Attractive, Diversified Operations Presence in six attractive growth service territories with constructive regulatory traditions More electric customers than any o
Slide 18: U.S. Generation Diversity
By Actual Generation: 231 TWh¹ By Owned Capacity: 57 GW¹ Highly diversified generation capacity and fuel profile Capacity and fuel diversity projected to increase, migrating the combined fleet to greater gas and less coal exposure Source: SNL Energy, Ventyx, company filings ¹ Note: Capacity owned as
Slide 19: U.S. Generation Well Positioned for Pending Environmental Regulations
Unscrubbed Coal Capacity (GW) Generation Capacity by Technology (GW / %) U.S. Generation Well Positioned for Pending Environmental Regulations Announced Retirements Duke Energy 1.9 Progress Energy 1.5 Subtotal 3.4 Potential Additional Retirements/Investments Duke Energy 2.2 Progress Energy 1.0 Subto
Slide 20: Nuclear Generation Overview
Nuclear Generation Capacity Owned (GW) Combined Nuclear Generation Fleet Source: SNL Energy, Ventyx, company filings Note: Capacity owned as of 09/30/2010 for Duke Energy and Progress Energy; as of 12/31/2009 for other companies Nuclear Generation Overview 17.0 10.1 2.2 2.2 3.7 3.7 3.8 4.0 5.2 5.5 5
Slide 21: Financial Summary
Pe eietyy. SE Progress Energy
Slide 22: Accretive to Earnings in the First Year After Close
Accretive to earnings in the first year after close Joint dispatch and fuel savings will immediately benefit Carolinas’ customers ($600 - M from 2012 - 2016) Non-fuel merger benefits help achieve first year earnings accretion No equity issuance requirements assumed Long-term adjusted diluted EPS CAG
Slide 23: Predominantly Regulated Earnings Base and Cash Flows
Business Mix Predominantly Regulated Earnings Base and Cash Flows Commercial Power 9% Regulated ~100% Duke Energy 2010E EBIT: ~$3.4 B Progress Energy Combined Regulated 77% 2010E EBIT: ~$2.1 B DEI 9% 2010E EBIT: ~$5.5 B Regulated 85% DEI 14% Commercial Power 6% Regulated EBIT contribution of the com
Slide 24: Attractive Rate Base Growth
Projected Rate Base ($ B) $17 $19 $20 $23 $27 $29 $3 $3 $3 $4 $3 $2 $1 $1 $1 $1 $1 Projected Capital Expenditures ($ B) Attractive Rate Base Growth $49 $46 $40 2010E 2011E 2012E 2013E 2014E Progress Energy Duke Energy $8 $8 $7 2010E 2011E 2012E Regulated Maintenance Regulated Growth Non-Regulated Di
Slide 25: Attractive Dividend Policy
DUK Annual Dividend Per Share History Attractive Dividend Policy Duke Energy dividend and policy to be maintained Continued growth in dividend at a rate slower than growth of adjusted diluted EPS Targeting a long-term payout range of 65% to 70% Attractive payout and yield underscores compelling shar
Slide 26: Strong Credit Quality and Liquidity
$0.7 $2.0 $2.7 $1.1 $3.3 $3.6 $0.8 Pro Forma Liquidity ($ B) Projected Debt/Total Capitalization Strong Credit Quality and Liquidity $1.8 $5.3 $6.3 $0.8 Duke Energy Progress Energy 50% 51% 51% Note: Debt/Total Capitalization is unadjusted; 2011E is estimated as transaction is not targeted to close u
Slide 27: Shareholder Value Track Record
Total Shareholder Return (%) Shareholder Value Track Record 15.1% (8.3%) 12.0% 5.7% (15.4%) 20.9% 9.5% 4.7% 44.2% 12.6% 7.9% 32.3% S&P 500 UTY Duke Energy Progress Energy 1 year S&P 500 UTY 3 year S&P 500 UTY 5 year Source: Bloomberg as of 12/31/2010 Duke Energy Progress Energy Duke Energy Progress
Slide 28: Closing
Pe eietyy. SE Progress Energy
Slide 29: Summary Highlights
Summary Highlights Creates largest U.S. utility, supported by substantial, diversified regulated earnings and cash flows Unmatched financial and operational scale, scope and strength Principally regulated earnings base supports dividend Significant scale of operating cash flows Leverages “best-in-cl
Slide 30: Appendix
Pe eietyy. SE Progress Energy
Slide 31: Progress Energy
Progress Energy +) Pee naray.
Slide 32: Duke Energy – Summary of Major Capital Projects
Edwardsport – Indiana Cliffside – Carolinas Buck – Carolinas Dan River – Carolinas US FE&G Major Construction Projects¹ ($ M) Renewables Projects $2,025 $1,550 $350 $225 Duke Energy – Summary of Major Capital Projects Project costs include direct capital and AFUDC 618 MW IGCC facility expected in-se
Slide 33: Progress Energy – Summary of Major Capital Projects
$475 $150 $75 $80 Richmond County CCGT – North Carolina Lee CCGT – North Carolina Sutton CCGT – North Carolina Smart Grid – Carolinas & Florida Progress Energy Major Construction Projects¹ ($ M) Progress Energy – Summary of Major Capital Projects $100 $625 $525 $240 Richmond County Lee Sutton Smart
Slide 34: Dividend Accretion to Progress Energy – Illustrative Example
Example calculation of Progress Energy dividend based on Duke Energy’s current annual dividend per share Duke Energy annual dividend Multiplied by: exchange ratio Progress Energy exchange-ratio adjusted dividend Progress Energy current annual dividend Progress Energy expected dividend accretion Divi
Slide 35: energy. Sa! Progress Energy
energy. Sa! Progress Energy