Duke Energy Corporation (holding Company) · NYSE:DUK
Duke Energy Corporation (holding Company) — Q4 2019 Earnings Presentation
88 slides from Duke Energy Corporation (holding Company)'s earnings presentation, Feb 13, 2020
Slide 1: Earnings Review & Business Update
Earnings Review & Business Update FOURTH QUARTER 2019 Lynn Good Chairman / President and CEO Steve Young Executive Vice President and CFO February 13, 2020
Slide 2: Safe Harbor statement
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 in the Appendix herein and
Slide 3: Delivering on commitments
Delivering on commitments $5.06 IN 2019 DELIVERING ON FINANCIAL RESULTS… 2019 REPORTED AND ADJUSTED EPS ✓ 2019 EPS above guidance range midpoint IN TOP HALF OF GUIDANCE RANGE ✓ Strong year-over-year results represent 7% growth ✓ Well positioned to continue to deliver 4-6% EPS growth ADJUSTED EPS GRO
Slide 4: Rapidly expanding infrastructure needs driven by strong fundamental growth
Rapidly expanding infrastructure needs driven by strong fundamental growth 12% INCREASE IN 5-YEAR CAPITAL PLAN; SERVING THREE OF THE MOST LOW RISK INVESTMENTS VIBRANT STATES IN THE COUNTRY $56B U.S. Rankings: #1 #2 #3 #4 #5 2% 150 2019 Net Migration 3% (in thousands)(1) $50B 4% 100 134 126 2% 91 5%
Slide 5: Our purpose, vision and commitment to stakeholder engagement
Our purpose, vision and commitment to stakeholder engagement DUKE ENERGY’S GUIDING PRINCIPLES Our purpose: Power the lives of our customers and the vitality of our communities Our vision: Lead the way to cleaner, smarter energy solutions that customers value 2019 STAKEHOLDER ENGAGEMENT RESULTS ✓ Rea
Slide 6: ESG is an essential component of Duke Energy's strategy
ESG is an essential component of Duke Energy’s strategy ▪ Industry-leading climate goal of net-zero carbon emissions by 2050 ▪ Announced over 1,500 MW of new wind and solar projects in 2019 ENVIRONMENTAL ▪ Further reduced CO2 emissions by an additional 8% in 2019 from 2005 levels, bringing total dec
Slide 7: Significant investment needs in our communities through 2030 and beyond
Significant investment needs in our communities through 2030 and beyond MODERNIZE THE ENERGY GRID ▪ Improving the largest grid in the United States to support: ‒ Carbon reduction goals / renewables penetration ‒ Hardening and resiliency against storms / grid security ‒ Population and economic growth
Slide 8: 2019 Financial results
2019 Financial results 2019 KEY MESSAGES $5.06 2019 REPORTED AND ADJUSTED EPS ▪ Delivered ~5% adjusted EPS CAGR from 2017 (first year ABOVE MIDPOINT OF ORIGINAL AND REVISED GUIDANCE RANGE(1) of portfolio transition) through 2019 ▪ Achieved solid year-over-year growth in each operating segment: ADJUS
Slide 9: 2020 Financial outlook – adjusted EPS waterfall
2020 Financial outlook – adjusted EPS waterfall Electric Utilities Gas Utilities Commercial Share Other & Infrastructure & Infrastructure Renewables dilution(1)(2) ($0.10) $0.18 $0.10 $0.06 ($0.05) ▲ Shift of solar project in- ▼ Financing costs service from 2019 to 2020 ▼ DRIP/ATM ▲ LDC rate cases ▲
Slide 10: 2021 Primary EPS growth drivers
2021 Primary EPS growth drivers Electric Utilities & Infrastructure • Florida multi-year rate plan and Solar BRA • Rate case full year impact: ‒ Indiana and Kentucky ‒ DEC/DEP NC • Midwest grid investments (DEI/DEO) • Load growth consistent with 0.5% long-term expectation • Cost management through d
Slide 11: Increase in capital plan drives significant earnings base growth
$6B Increase in capital plan drives significant earnings base growth Florida - $1.5B increase REGULATED ELECTRIC AND ▪ Grid hardening supported by Storm Protection Plan GAS EARNINGS BASE(2) regulations (SB 796) ▪ Solar investments $105 Electricnet migration in the U.S.(1) $100 ▪ Underpinned by highe
Slide 12: Balance sheet strength and equity financing plan
Balance sheet strength and equity financing plan KEY MESSAGES PRIMARY ▪ Committed to maintaining strong credit quality, including CREDIT METRICS investment-grade ratings FFO/DEBT ‒ Credit ratings recently affirmed at BBB+/Baa1 (Stable) Target: 15 - 16% ‒ Credit metrics are consistently solid over th
Slide 13: Ongoing commitment to the dividend
Ongoing commitment to the dividend TOP TIER DIVIDEND YIELD(1) …WITH A PROVEN TRACK RECORD OF PROVIDES LOW RISK RETURNS… DIVIDEND GROWTH(3)(4) DUK 3.9% 65 - 75% Top LONG-TERM TARGET Quartile PAYOUT RATIO(2) Median Bottom Quartile 2.0% 2.5% 3.0% 3.5% 4.0% (1) As of Feb. 11, 2020. Compared to UTY const
Slide 14: Focused on investor value creation
Focused on investor value creation A STRONG LONG-TERM RETURN PROPOSITION 3.9% ~8-10% 4 -6% DIVIDEND YIELD(1) zzz ATTRACTIVE HIGHLY WITH DIVIDEND RISK-ADJUSTED ACHIEVABLE GROWTH TOTAL SHAREHOLDER EPS GROWTH COMMITMENT(2) RETURN(3) THROUGH 2024(4) CONSTRUCTIVE JURISDICTIONS, LOW-RISK REGULATED INVESTM
Slide 15: Appendix
Appendix FOURTH QUARTER 2019 EARNINGS REVIEW AND BUSINESS UPDATE // 15 // 15
Slide 16: Advancing our strategic vision
Advancing our strategic vision TRANSFORM THE CUSTOMER EXPERIENCE MODERNIZE THE GENERATE EXPAND NATURAL GAS ENERGY GRID CLEANER ENERGY INFRASTRUCTURE STAKEHOLDER ENGAGEMENT EMPLOYEE ENGAGEMENT AND OPERATIONAL EXCELLENCE ARE FOUNDATIONAL TO OUR SUCCESS FOURTH QUARTER 2019 EARNINGS REVIEW AND BUSINESS
Slide 17: Atlantic Coast Pipeline – project update
Atlantic Coast Pipeline – project update FINANCIAL CONSIDERATIONS ▪ Expect mechanical completion of the project in late 2021 with full in- service in the first half of 2022 Electric ▪ Estimated cost of approximately $8.0 billion(1) Distribution – ACP represents ~ 4% of Duke Energy’s 5-year capital p
Slide 18: Coal ash settlement provides clarity on closure method and costs
Coal ash settlement provides clarity on closure method and costs ▪ NCDEQ issued order April 1, 2019 requiring remaining 9 low risk basins be fully excavated ▪ Settlement reached with NCDEQ and community groups on December 31, 2019: ▪ ~70% of remaining ash at 7 of the 9 basins to be excavated, with a
Slide 19: Commercial renewables
Commercial renewables KEY ASSUMPTIONS ▪ Commercial renewables segment income relatively flat over the five-year plan (2020-2024) at approximately $200-$250 million per year ▪ Line-of-sight to all net income prospects for 2020; and ~60% of the five-year plan (2020-2024) ▪ Abundant opportunities exist
Slide 20: 2019 performance and 2020 guidance supplemental information
2019 performance and 2020 guidance supplemental information FOURTH QUARTER 2019 EARNINGS REVIEW AND BUSINESS UPDATE // 20 // 20
Slide 21: Key 2020 adjusted earnings guidance assumptions
Key 2020 adjusted earnings guidance assumptions 2020 Interest Expense Assumption (Consolidated Total $2,234) ($ in millions) Orig. 2019 2019 2020 Assumptions Actual Assumptions Adjusted segment income/(expense) (1): $650 Electric Utilities & Infrastructure $3,480 $3,509 $3,640 $76 $1,393 Gas Utiliti
Slide 22: Electric utilities quarterly weather impacts
Electric utilities quarterly weather impacts Weather segment 2019 2018 income to normal: Pretax impact Weighted avg. EPS impact Pretax impact Weighted avg. EPS impact shares favorable / shares favorable / (unfavorable) (unfavorable) First Quarter ($55) 727 ($0.06) $10 701 $0.01 Second Quarter $80 72
Slide 23: Key 2020 earnings sensitivities
Key 2020 earnings sensitivities Driver EPS Impact 1% change in earned return on equity +/- $0.52 Electric Utilities & $1 billion change in rate base +/- $0.07 Infrastructure 1% change in volumes(1) +/- $0.15 1% change in earned return on equity +/- $0.07 Gas Utilities & $200 million change in rate b
Slide 24: Regulated utilities end of year earnings base
Regulated utilities end of year earnings base(1) Electric Utilities Earnings Base ($ in billions) 2019A 2020E 2021E 2022E 2023E 2024E Duke Energy Carolinas $25.3 $26.9 $28.7 $30.3 $32.1 $33.9 Duke Energy Progress 17.9 18.6 18.4 19.5 20.7 21.6 Duke Energy Florida 14.1 15.5 16.6 17.7 18.8 20.2 Duke In
Slide 25: Capital expenditures profile
Capital expenditures profile(1) ($ in millions) Electric Utilities & Infrastructure 2019A 2020E 2021E 2022E 2023E 2024E 2020 - 2024 Electric Generation(2) 1,417 1,500 1,375 1,475 1,600 1,775 7,725 Electric T ransmission 1,070 1,325 1,350 1,425 1,525 1,200 6,825 Electric Distribution 2,574 2,650 3,12
Slide 26: Capital expenditures by utility
Capital expenditures by utility(1) ($ in millions) Duke Energy Carolinas 2019A 2020E 2021E 2022E 2023E 2024E 2020 - 2024 Electric Generation $ 535 $ 725 $ 525 $ 425 $ 575 $ 850 $ 3,100 Electric T ransmission 197 350 400 425 375 350 1,900 Electric Distribution 809 925 1,475 1,300 1,600 1,475 6,775 (2
Slide 27: Capital expenditures by utility (continued)
Capital expenditures by utility (continued)(1) ($ in millions) Duke Energy Florida 2019A 2020E 2021E 2022E 2023E 2024E 2020 - 2024 Electric Generation $ 401 $ 325 $ 325 $ 200 $ 200 $ 200 $ 1,250 Electric T ransmission 425 575 450 400 300 300 2,025 Electric Distribution 471 500 525 925 925 925 3,800
Slide 28: Capital expenditures by utility (continued)
Capital expenditures by utility (continued)(1) ($ in millions) Duke Energy OH/KY Electric 2019A 2020E 2021E 2022E 2023E 2024E 2020 - 2024 Electric Generation $ 14 $ 25 $ - $ 75 $ - $ - $ 100 Electric T ransmission 189 150 100 100 100 100 550 Electric Distribution 338 300 250 250 225 225 1,250 (2) En
Slide 29: Environmental compliance expenditures
Environmental compliance expenditures Coal Ash Closure Total Project Spend 2020 – 2024 Costs Costs To Date(1) Plan Duke Energy Carolinas $5,025 $1,228 $1,025 ($ in millions) Duke Energy Progress $3,650 $1,092 $1,200 Category 2020 – 2024 Duke Energy Indiana $1,100 $202 $530 Coal ash closure $2,775 Du
Slide 30: 2019 Electric customer growth and weather-normal volume trends
2019 Electric customer growth and weather-normal volume trends ANNUAL GROWTH IN NUMBER OF RESIDENTIAL RESIDENTIAL ELECTRIC CUSTOMERS ▪ Increase in average number of customers in our 1.8% attractive service territories drives long-term volume 1.7% 1.6% 1.5% growth for electric and gas utilities 1.0%
Slide 31: Weather normalized volume trends, by electric jurisdiction
Weather normalized volume trends, by electric jurisdiction Rolling Twelve Months, as of Dec. 31, 2019 Duke Energy Duke Energy Duke Energy Duke Energy Duke Energy Electric Carolinas Progress Florida Indiana Ohio/Kentucky Utilities Estimated impact of utility sponsored energy efficiency efforts on res
Slide 32: Strong O&M cost management
Strong O&M cost management O&M COST MANAGEMENT ($ IN BILLIONS) TOP TIER COST MANAGEMENT CONTINUES $5.0 ▪ Outstanding track record of cost management $4.9 $4.9 $4.9 $4.9 ▪ Since 2015, we have kept non-recoverable O&M flat Flat to declining O&M – Includes absorbing ~$300 million of O&M from the Piedmo
Slide 33: Managing regulatory lag and customer rate impacts
Managing regulatory lag and customer rate impacts ADJUSTED BOOK ROEs(1) COMPETITIVE CUSTOMER RATES(2) 10.4% U.S. AVG. 14.16 10.6% Carolinas DEP (SC) 13.01 10.5% 9.5–10.0% DEF 12.86 11.0% DEP (NC) 12.41 10.5% DEC (SC) 12.25 Florida 10.3% DEI 12.18 10.5–11.0% DEC (NC) 10.59 10.1% 9.5% DEK 9.01 Indiana
Slide 34: Renewables projects announcements
Renewables projects announcements REGULATED COMMERCIAL RENEWABLES Solar Megawatts Site Megawatts COD Location Site Solar Wind Fuel Cell Total COD Location Lake Placid 45 Q4 2019 FL Cleveland County(1) 50 - - 50 2020 NC Trenton 74.9 Q4 2019 FL Surry County(1) 23 - - 23 2020 NC DeBary 74.5 Q1 2020 FL
Slide 35: Financing assumptions
Financing assumptions FOURTH QUARTER 2019 EARNINGS REVIEW AND BUSINESS UPDATE // 35 // 35
Slide 36: Simplified financing structure
Simplified financing structure Duke Energy (HoldCo) Cinergy Corp. Progress Energy (HoldCo) (HoldCo) (1) Duke Energy Duke Energy Duke Energy Duke Energy Duke Energy Piedmont Natural Carolinas Ohio Indiana Progress Florida Gas Commercial Paper and LT Financings Duke Energy Duke Energy Money Pool and L
Slide 37: Forecasted 2020 summary cash flows
Forecasted 2020 summary cash flows(1) (2) Adjusted net income $ 3,870 Depreciation & amortization 5,470 Deferred and accrued taxes(3) 805 Issuances & Maturities Summary (4) (2020 Estimate) Other sources / (uses), net (235) $3,525 Primary sources 9,910 Capital expenditures (11,825) $1,765 $1,550 $1,5
Slide 38: 2020 Financing plan
2020 Financing plan(1) Planned Amount Completed 2020 Issuer Security Date Issued Term Rate ($ in millions) ($ in millions) Maturities(4) Holding Company $1,000 - $1,500 Debt/hybrid securities - - - - $330 Common Equity $0 – ATM Holding Company $500 (2) YTD - - - (ATM/DRIP) $5 – DRIP $500 10-year Fix
Slide 39: Credit ratings and cash flow metrics
Credit ratings (as of February 13, 2020) and cash flow metrics(1) (2) Rated Issuers HoldCo Debt / Total Debt FFO/Debt Moody's S&P 34% ~ 14.5% 15% DUKE ENERGY CORPORATION Stable Stable 33% Senior Unsecured Debt Baa1 BBB+ Commercial Paper P-2 A-2 2019A 2020E 2019A 2020E (3) PROGRESS ENERGY, INC. Stabl
Slide 40: Liquidity summary (as of Dec. 31, 2019)
Liquidity summary (as of Dec. 31, 2019) ($ 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 $ 1,500 $ 1,250 $ 800 $ 600 $ 450 $ 150 $ 600 $ 8
Slide 41: 2020 Pension funding and costs
2020 Pension funding and costs ▪ On a consolidated basis, Duke Energy pension Pension plans funding status is 107% as of 12/31/2019 Contributions 2018A 2019A 2020E ($ in millions) on a PBO basis All plans $141 $77 $0 ▪ Duke Energy’s pension funding policy: ▪ Duke Energy’s policy is to fund amounts o
Slide 42: Sustainability / Environmental Social and Governance (ESG)
Sustainability / Environmental Social and Governance (ESG) FOURTH QUARTER 2019 EARNINGS REVIEW AND BUSINESS UPDATE // 42 // 42
Slide 43: Duke Energy's industry-leading climate plan
Duke Energy’s industry-leading climate plan Companywide CO2 Emissions Cut CO2 emissions by at least 50% by 2030 Reduction Goals(1) Attain net-zero CO2 emissions by 2050 ✓ Exceeded 2025 reduction benchmarks agreed to by the U.S. CO2 Reductions for the Paris climate accord Already Achieved(2) ✓ Me
Slide 44: Environmental and climate accomplishments
Environmental and climate accomplishments SIGNIFICANT CARBON REDUCTIONS AND FUEL DIVERSITY RENEWABLE POWER EXPANSION (MWh OUTPUT) 1% ▪ Since 2005, decreased CO2 emissions by 39%, sulfur dioxide emissions by 97% and nitrogen oxides emissions by 79%(1) 33% 60% ▪ 51 coal units retired (~6.5 GW) since 2
Slide 45: Social responsibility – commitment to safe and inclusive workplace
Social responsibility – commitment to safe and inclusive workplace SAFETY – OUR NUMBER ONE PRIORITY ▪ Total Incident Case Rate (TICR) of 0.38 in 2019; one of the industry leaders for 5th year in a row EMPLOYEES ▪ Named one of Fortune’s “World’s Most Admired Companies” for 3rd consecutive year ▪ Name
Slide 46: Governance and transparency
Governance and transparency ▪ Dow Jones Sustainability Index for 14 years in a row BOARD DIVERSITY ▪ Over a decade of annual Sustainability reports Diverse(1) (6 directors) ▪ Climate Report issued in 2018 analyzes 2-degree scenario – Utilizes Task Force on Climate-related Financial Disclosures (“TCF
Slide 47: Regulatory overview
Regulatory overview FOURTH QUARTER 2019 EARNINGS REVIEW AND BUSINESS UPDATE // 47 // 47
Slide 48: Update on general rate case activity
Update on general rate case activity FILING DOCKET KEY STATUS TYPE NO. DRIVERS ▪ ROE 10.3%; 53% equity cap. structure DUKE ENERGY ▪ Hearings scheduled Mar 23, ‘20 ▪ Grid investments, including AMI NC Base Rate Case CAROLINAS E-7 Sub 1214 ▪ Requested new rates effective ▪ Dual fuel plant upgrades fil
Slide 49: Regulatory calendar
Regulatory calendar Pending rate case Planned/Evaluating rate case Modern recovery mechanism JURISDICTION 2019 2020 2021 2022 2023 2024 H.B. 589 rider – NC - Filed annually DEC Pending – NC Planning for multiple rate cases – NC / SC H.B. 589 rider – NC - Filed annually DEP Pending – NC Planning for
Slide 50: Overview of state commissions by jurisdiction
Overview of state commissions by jurisdiction North Carolina South Carolina Florida Indiana Ohio Kentucky Tennessee Number of 7 7 5 5 5 3 5 Commissioners Term (years) 6 4 4 4 5 4 6 Appointed by Appointed by Elected by the Appointed by Appointed by Appointed by Appointed by Appointed/Elected Governor
Slide 51: Current electric rate information by jurisdiction
Current electric rate information by jurisdiction North South(1) Ohio Kentucky Florida Indiana Carolina Carolina (Electric) (Electric) $13.5 B (2) (DEC) $5.4 B (DEC) $1.3 B Retail Rate Base $13.5 B (3) $7.1 B (4) $650 M (5) $8.2 B (2) (DEP) $1.5 B (DEP) (dist. only) $1.8 B (DEC) 3Q 2019 $0.6 B Whole
Slide 52: General Rate Case Provisions
Current electric rate information by jurisdiction (continued) General Rate Case Provisions North South Ohio Kentucky Florida Indiana Carolina Carolina (Electric) (Electric) Notice of Intent Required? Yes Yes Yes Yes (1) Yes Yes Notice Period 30 Days 30 Days 60 Days Varies 30 Days 30 Days Historical
Slide 53: Current gas rate information by jurisdiction
Current gas rate information by jurisdiction North South Ohio Kentucky Tennessee Carolina Carolina (Gas) (Gas) Rate Base ($M) $3.5 billion $366 million $349 million $900 million(1) $313 million (2) Allowed ROE 9.7% 9.9% 10.2% 9.84% 9.7% Allowed Equity 52% 55.35% 52.7% 53.3% 50.8% Effective Date of 1
Slide 54: Segment overviews
Segment overviews FOURTH QUARTER 2019 EARNINGS REVIEW AND BUSINESS UPDATE // 54 // 54
Slide 55: Duke Energy business segment structure
Duke Energy business segment structure Duke Energy Electric Utilities Gas Utilities Commercial Other & Infrastructure & Infrastructure Renewables North and South Duke Energy Carolinas Piedmont Natural Gas Carolina North and South Commercial Duke Energy Progress Carolina Pipelines Duke Energy Florida
Slide 56: Duke Energy – a large scale, highly regulated energy infrastructure company
Duke Energy – a large scale, highly regulated energy infrastructure company HEADQUARTERED IN ELECTRIC UTILITIES CHARLOTTE, NC & INFRASTRUCTURE ▪ Operating in six constructive jurisdictions, with attractive allowed ROEs, serving 7.8 million retail customers ▪ Customer rates below the national average
Slide 57: Complementary businesses with strong growth opportunities
Complementary businesses with strong growth opportunities ELECTRIC UTILITIES 2020 ADJUSTED 2020-2024 2020 – 2024 & INFRASTRUCTURE EPS CONTRIBUTION(1) CAPEX ADJUSTED EPS CAGR(2) 83% $45.6 B Consolidated 4-6% GAS UTILITIES & INFRASTRUCTURE 8-10% 12% $7.3 B 5-6% COMMERCIAL RENEWABLES 5% $2.2 B(3) Elect
Slide 58: Electric utilities & infrastructure
Electric utilities & infrastructure COMPETITIVE CUSTOMER RATES(1) REGULATED ELECTRIC EIGHT UTILITIES IN 2019 EARNINGS BASE RESIDENTIAL HIGH-QUALITY U.S. AVG. 14.16 DEO - Electric DEK - Electric REGIONS OF THE U.S. DEP (SC) 13.01 4% 1% DEF 12.86 DEP (NC) 12.41 DEI CAROLINAS DEC (SC) 12.25 12% DEI 12.
Slide 59: Grid improvement programs overview
Grid improvement programs overview TARGETED AMI DEPLOYMENT UNDERGROUNDING DEC SELF- TRANSMISSION DEP (1) OPTIMIZATION IMPROVEMENTS (1) DEF DEI DEO DEK DISTRIBUTION ENTERPRISE 0% 50% 100% HARDENING & SYSTEM Previously Added To be added RESILIENCY UPGRADES Completed In 2019 In 2020 COMMUNICATION ADVAN
Slide 60: Gas utilities & infrastructure
Gas utilities & infrastructure GAS UTILITIES WITH LOW VOLUMETRIC EXPOSURE DUE TO MOSTLY FIXED MARGINS… 9% 12% MARGIN STABILIZING MECHANISMS 1. Purchased Gas Adjustment All States 79% 91% MOSTLY 2. Uncollectible Recovery All States FIXED 3. Integrity Management Rider North Carolina and MARGINS (“IMR”
Slide 61: Commercial Renewables asset locations
Commercial Renewables asset locations A full list of generation facilities can be found at: https://www.duke-energy.com//_/media/pdfs/our-company/investors/duke-energy-generation-portfolio.pdf FOURTH QUARTER 2019 EARNINGS REVIEW AND BUSINESS UPDATE //// 61 61
Slide 62: Upcoming events & other
Upcoming events & other FOURTH QUARTER 2019 EARNINGS REVIEW AND BUSINESS UPDATE // 62 // 62
Slide 63: Upcoming events
Upcoming events Event Date 1Q 2020 earnings call (tentative) May 1, 2020 May 2020 ESG Investor day (tentative) Mid to late May 2020 2Q 2020 earnings call (tentative) August 6, 2020 3Q 2020 earnings call (tentative) November 5, 2020 FOURTH QUARTER 2019 EARNINGS REVIEW AND BUSINESS UPDATE //// 63 63
Slide 64: Investor relations contact information
Investor relations contact information BRYAN BUCKLER, VICE PRESIDENT INVESTOR RELATIONS ▪ Bryan.Buckler@duke-energy.com ▪ (704) 382-2640 CINDY LEE, DIRECTOR INVESTOR RELATIONS ▪ Cynthia.Lee@duke-energy.com ▪ (980) 373-4077 ABBY MOTSINGER, MANAGER INVESTOR RELATIONS ▪ Abby.Motsinger@duke-energy.com ▪
Slide 65: 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 66: For additional information on Duke Energy, please visit duke-energy.com/investors
For additional information on Duke Energy, please visit: duke-energy.com/investors
Slide 67: Duke Energy Corporation Non-GAAP Reconciliations
Duke Energy Corporation Non-GAAP Reconciliations Fourth Quarter Earnings Review & Business Update February 13, 2020 Adjusted Earnings per Share (EPS) The materials for Duke Energy Corporation’s (Duke Energy) Fourth Quarter Earnings Review and Business Update on February 13, 2020, include a discussio
Slide 68: Adjusted EPS Guidance
Adjusted EPS Guidance The materials for Duke Energy’s Fourth Quarter Earnings Review and Business Update on February 13, 2020, include a reference to the forecasted 2020 adjusted EPS guidance range of $5.05 to $5.45 per share and the midpoint of forecasted 2020 adjusted EPS guidance range of $5.25.
Slide 69: Effective Tax Rate Including Impacts of Noncontrolling Interests
Effective Tax Rate Including Impacts of Noncontrolling Interests and Preferred Dividends and Excluding Special Items The materials for Duke Energy’s Fourth Quarter Earnings Review and Business Update on February 13, 2020, include a discussion of the effective tax rate including impacts of noncontrol
Slide 70: Dividend Payout Ratio
Dividend Payout Ratio The materials for Duke Energy’s Fourth Quarter Earnings Review and Business Update on February 13, 2020, include a discussion of Duke Energy’s forecasted dividend payout ratio of 65% - 75% based upon adjusted EPS. This payout ratio is a non-GAAP financial measure as it is based
Slide 71: Holdco Debt Percentage
Holdco Debt Percentage The materials for Duke Energy’s Fourth Quarter Earnings Review and Business Update on February 13, 2020 include a reference to a historical and projected Holdco debt percentage. This percentage reflects a non- GAAP financial measure. The numerator of the Holdco debt percentage
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Slide 74: Reported to Adjusted Earnings Reconciliation, Twelve Months Ended December 31, 2017
DUKE ENERGY CORPORATION REPORTED TO ADJUSTED EARNINGS RECONCILIATION Twelve Months Ended December 31, 2017 (Dollars in millions, except per-share amounts) Special Items Costs to Achieve Commercial Reported Piedmont Regulatory Renewables Impacts of Discontinued Total Adjusted Earnings Merger Settleme
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Slide 76: Available Liquidity Reconciliation
Duke Energy Corporation Available Liquidity Reconciliation As of December 31, 2019 (In millions) Cash and Cash Equivalents $ 311 Less: Certain Amounts Held in Foreign Jurisdictions (1) Less: Unavailable Domestic Cash (33) 277 Plus: Remaining Availability under Master Credit Facilities and other faci
Slide 77: Operations, Maintenance and Other Expense
Duke Energy Corporation Operations, Maintenance and Other Expense (In millions) Actual Actual Actual Actual Forecast December 31, 2016 December 31, 2017 December 31, 2018 December 31, 2019 December 31, 2020 Operation, maintenance and other(a) $6,223 $5,944 $6,463 $6,066 $6,061 Adjustments: Costs to
Slide 78: Adjusted Book Return on Equity (ROEs), 2019
DUKE ENERGY CORPORATION ADJUSTED BOOK RETURN ON EQUITY (ROEs) For the period ended December 31, 2019 dollars in millions Duke Energy Duke Energy Duke Energy Duke Energy Duke Energy Ohio Reportable Carolinas Progress Total Carolinas Florida Indiana Segments Piedmont Reported Net Income 2019 $ 1,403 $
Slide 79: Adjusted Book Return on Equity (ROEs), 2018
DUKE ENERGY CORPORATION ADJUSTED BOOK RETURN ON EQUITY (ROEs) For the period ended December 31, 2018 dollars in millions Duke Energy Duke Energy Duke Energy Duke Energy Duke Energy Ohio Reportable Carolinas Progress Total Carolinas Florida Indiana Segments Piedmont Reported Net Income 2018 $ 1,071 $
Slide 80: Adjusted Book Return on Equity (ROEs), 2017
DUKE ENERGY CORPORATION ADJUSTED BOOK RETURN ON EQUITY (ROEs) For the period ended December 31, 2017 dollars in millions Duke Energy Duke Energy Duke Energy Duke Energy Duke Energy Ohio Reportable Carolinas Progress Total Carolinas Florida Indiana Segments Piedmont Reported Net Income 2017 $ 1,214 $
Slide 81: 2020 Forecasted Cash Flow Reconciliation
Duke Energy Corporation 2020 Forecasted Cash Flow Reconciliation, Required by SEC Regulation G February 13, 2020 ($ in millions) Forecast 2020 Primary Sources: Adjusted net income (1) (a) $3,870 Depreciation & amortization (a) 5,470 Deferred and accrued taxes (a) 805 Other sources / (uses), net (a)
Slide 82: FFO to Debt Calculation – Duke Energy Corporation
FFO to Debt Calculation Duke Energy Corporation (in millions) Year Ended December 31, 2019 Actual Cash From Operations $ 8,209 Adjust for Working Capital 250 Coal ash ARO spend 746 Include Capitalized Interest as cost (159) Hybrid interest adjustment 10 Preferred stock adjustment (21) CR3 securitiza
Slide 83: FFO to Debt Calculation – Duke Energy Carolinas
FFO to Debt Calculation Duke Energy Carolinas (in millions) Year Ended December 31, 2019 Actual Cash From Operations $ 2,709 Adjust for Working Capital 144 ARO spend 278 Include Capitalized Interest as cost (30) Lease‐imputed FFO adjustment (D&A) 43 Funds From Operations $ 3,144 Current maturities o
Slide 84: FFO to Debt Calculation – Duke Energy Progress
FFO to Debt Calculation Duke Energy Progress (in millions) Year Ended December 31, 2019 Actual Cash From Operations $ 1,823 Adjust for Working Capital (92) Coal ash ARO spend 390 Include Capitalized Interest as cost (28) Lease‐imputed FFO adjustment (D&A) 56 Funds From Operations $ 2,149 Notes payab
Slide 85: FFO to Debt Calculation – Duke Energy Florida
FFO to Debt Calculation Duke Energy Florida (in millions) Year Ended December 31, 2019 Actual Cash From Operations $ 1,478 Adjust for Working Capital (178) Coal ash ARO spend 22 Include Capitalized Interest as cost (3) Adjust for CR3 (54) Lease‐imputed FFO adjustment (D&A) 79 Funds From Operations $
Slide 86: FFO to Debt Calculation – Duke Energy Indiana
FFO to Debt Calculation Duke Energy Indiana (in millions) Year Ended December 31, 2019 Actual Cash From Operations $ 997 Adjust for Working Capital 2 Coal ash ARO spend 48 Include Capitalized Interest as cost (26) Lease‐imputed FFO adjustment (D&A) 18 Funds From Operations $ 1,039 Notes payable to a
Slide 87: FFO to Debt Calculation – Duke Energy Ohio
FFO to Debt Calculation Duke Energy Ohio (in millions) Year Ended December 31, 2019 Actual Cash From Operations $ 526 Adjust for Working Capital (19) Coal Ash ARO spend 8 Include capitalized Interest as cost (22) Lease‐imputed FFO adjustment (D&A) 10 Funds From Operations $ 503 Notes payable to affi
Slide 88: FFO to Debt Calculation – Piedmont Natural Gas
FFO to Debt Calculation Piedmont Natural Gas (in millions) Year Ended December 31, 2019 Actual Cash From Operations $ 409 Adjust for Working Capital 88 Include Capitalized Interest as cost (26) Lease‐imputed FFO adjustment (D&A) 4 Funds From Operations $ 475 Notes payable to affiliated companies $ 4