Duke Energy Corporation (holding Company) · NYSE:DUK
Duke Energy Corporation (holding Company) — FY2006 Earnings Presentation
27 slides from Duke Energy Corporation (holding Company)'s earnings presentation, Feb 6, 2007
Slide 1: 2006 Earnings Review and 2007 Outlook
2006 Earnings Review and 2007 Outlook February 6, 2007 \ gem | . ~ Jim¢Rogers | Chairman, President-and Chief ke: Officer f F ) Group Executive and Chief Financial Officer 4 vid Hauser |
Slide 2: Safe Harbor Statement
Safe Harbor Statement Some of the statements in this document concerning future company performance will be forward-looking within the meanings of the securities laws. Actual results may materially differ from those discussed in these forward-looking statements, and you should refer to the additiona
Slide 3: Earnings Summary
Earnings Summary 4Q06 4Q05 2006 2005 Reported Diluted EPS $ 0.31 $ 0.63 $ 1.57 $ 1.88 Discontinued Operations 0.01 (0.18) 0.13 0.73 Special Items 0.11 (0.02) 0.11 (0.88) Ongoing Diluted EPS $ 0.43 $ 0.43 $ 1.81 $ 1.73 Annual results Ongoing earnings per share up due to addition of Cinergy and lo
Slide 4: Special Items for 4Q 2006
Special Items for 4Q 2006 EPS Impacts, ($ millions except per share amounts) Pre-Tax After Tax Diluted Settlement reserves $ (165) $ (107) $ (0.08) Adjustment to Campeche investment 5 5 0.00 Impairment of Bolivia investment (28) 3 0.00 Costs to achieve, Cinergy merger (31) (20) (0.01) Costs to achie
Slide 5: U.S. Franchised Electric & Gas
U.S. Franchised Electric & Gas Reported & Ongoing Segment EBIT ($ millions) 4Q06 4Q05 2006 2005 Reported Segment EBIT $ 423 $ 279 $ 1,811 $ 1,495 Special Items - - - - Ongoing Segment EBIT $ 423 $ 279 $ 1,811 $ 1,495 4Q06 Segment EBIT increased by $144 million over 4Q05 The addition of Cinergy’s
Slide 6: Commercial Power
Commercial Power Reported & Ongoing Segment EBIT ($ millions) 4Q06 4Q05 2006 2005 Reported Segment EBIT (Loss) $ (29) $ (74) $ 21 $ (118) Special Items - 75 - 75 Ongoing Segment EBIT (Loss) $ (29) $1 $ 21 $ (43) Commercial Power segment includes non-regulated generation assets in the Midwest and D
Slide 7: Commercial Power (cont.)
Commercial Power (cont.) Ongoing Segment EBIT Bridge ($ millions) 2006 Actual $ 21 Adjustments to bridge to 2007 Projected: Addition of Q1 Cinergy (before purchase accounting) 100 Prior year under collections of fuel and purchased power 40 Purchase accounting 20 Improvement of Midwest gas-fired asse
Slide 8: International Energy
International Energy Reported & Ongoing Segment EBIT ($ millions) 4Q06 4Q05 2006 2005 Reported Segment EBIT (Loss) $ (42) $ 97 $ 139 $ 314 Special Items 123 - 178 20 Ongoing Segment EBIT $ 81 $ 97 $ 317 $ 334 4Q06 ongoing segment EBIT declined $16 million compared to 4Q05 Decrease is primarily d
Slide 9: Crescent Resources
Crescent Resources Reported & Ongoing Segment EBIT ($ millions) 4Q06 4Q05 2006 2005 Reported Segment EBIT $ 17 $ 104 $ 532 $ 314 Special Items - - (246) - Ongoing Segment EBIT $ 17 $ 104 $ 286 $ 314 4Q06 equity earnings declined due to change in ownership (effective 50% ownership), lower residenti
Slide 10: Other
Other Reported & Ongoing EBIT ($ millions) 4Q06 4Q05 2006 2005 Reported EBIT (Loss) $ (228) $ (64) $ (581) $ (518) Special Items 137 (55) 251 7 Ongoing EBIT (Loss) $ (91) $ (119) $ (330) $ (511) Includes cost of corporate governance, merger and gas spin-off costs-to- achieve, captive insurance and
Slide 11: Natural Gas Transmission
Natural Gas Transmission Reported & Ongoing Segment EBIT ($ millions) 4Q06 4Q05 2006 2005 Reported Segment EBIT $ 336 $ 344 $ 1,438 $ 1,388 Special Items 2 - (37) - Ongoing Segment EBIT $ 338 $ 344 $ 1,401 $ 1,388 4Q06 ongoing segment results were down $6 million primarily due to higher O&M costs
Slide 12: Field Services
Field Services Reported & Ongoing Segment EBIT ($ millions) 4Q06 4Q05 2006 2005 Reported Segment EBIT $ 119 $ 162 $ 569 $ 1,946 Special Items - (35) (14) (1,441) Ongoing Segment EBIT $ 119 $ 127 $ 555 $ 505 Represents Duke Energy’s 50% ownership in DCP Midstream LLC 4Q06 equity earnings were pri
Slide 13: Other Items
Other Items Q4 2006 Interest expense for the quarter was $325 million compared to $250 million for 4Q05 Primarily due to the Cinergy merger Lower effective tax rate due to several factors Tax settlements, Bolivia impairment, reversal of taxes and synfuel credits Estimated Duke / Spectra sp
Slide 14: Looking Back / Measuring Success
Looking Back / Measuring Success Merger Scorecard Financial Status Operational Status Workforce reductions Safety: Merger Costs-to-achieve Total incidents / lost workday Non-fuel O&M: Reliability: Franchised Electric SAIDI / SAIFI DEA Availability (fossil / hydro) Corporate Governance Capacity facto
Slide 15: Current Regulatory Calendar
Current Regulatory Calendar Activity 2007 2008 2009 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Carolinas 1. New generation – Cliffside Pursue CPCN Pursue recovery of financing costs on CWIP 2. New generation – Nuclear Pursue recovery of upfront costs Pursue recovery of financing costs on CWIP File COL appl
Slide 16: Current Regulatory Calendar (cont.)
Current Regulatory Calendar (cont.) Activity 2007 2008 2009 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Ohio 1. RSP Supreme Court remand Current program ends 2. Merger-related rate credit ends - Ended December 31, 2006 - 3. Transmission cost recovery filing 4. Fuel & purchased power and SRT filing - Filed 1
Slide 17: Federal Regulatory Strategy
Federal Regulatory Strategy YTD through September 30 Key Congressional issue Carbon Duke Energy MWh Dispatched 65% 33% Hearings currently underway Duke Energy Net MW Capacity 52% 18% 18% 12% Potential impact to Duke Third-largest consumer of coal Coal Nuclear Gas/Oil Hydro Note: Excludes C
Slide 18: Value Proposition
Value Proposition Growth Annual Total Return Profile Sales growth 15% Cost reductions Return on capital investments Value 10% Proactive regulatory strategy 2007 EPS incentive target of $1.15 per share, based on ongoing 5% diluted EPS 4 – 6% ongoing diluted EPS growth through 2009 0%
Slide 19: Slide 19
Slide 20: Non-GAAP Reconciliation Schedules
Duke Energy Corporation Non-GAAP Reconciliation Schedules 2006 Earnings Review and 2007 Outlook February 6, 2007 Ongoing Diluted Earnings per Share (“EPS”) The slides and prepared remarks for Duke Energy’s 2006 Earnings Review and 2007 Outlook include a discussion of ongoing diluted EPS for the quar
Slide 21: Ongoing Diluted EPS Growth Rates through 2009
Ongoing Diluted EPS Growth Rates through 2009 The slides and prepared remarks for Duke Energy’s 2006 Earnings Review and 2007 Outlook include a discussion of the expected range of growth in ongoing diluted EPS through 2009. These percentages are based on anticipated ongoing diluted EPS amounts for f
Slide 22: Ongoing to Reported Earnings Reconciliation, December 2005 Quarter-to-date
DUKE ENERGY CORPORATION ONGOING TO REPORTED EARNINGS RECONCILIATION December 2005 Quarter-to-date (Dollars in millions, except per-share amounts) Special Items (Note 1) Discontinued MTM change on Loss on MTM impact of de- Operations/ Field Services de-designated Ongoing Southeast designated Cumulati
Slide 23: Ongoing to Reported Earnings Reconciliation, December 2005 Year-to-date
DUKE ENERGY CORPORATION ONGOING TO REPORTED EARNINGS RECONCILIATION December 2005 Year-to-date (Dollars in millions, except per-share amounts) Special Items (Note 1) Initial gain and Discontinued Loss on Gain on Gains (Losses) Mutual Field Services subsequent Operations/ Southeast transfer of on sal
Slide 24: Ongoing to Reported Earnings Reconciliation, December 2006 Quarter-to-date
DUKE ENERGY CORPORATION ONGOING TO REPORTED EARNINGS RECONCILIATION December 2006 Quarter-to-date (Dollars in millions, except per-share amounts) Special Items (Note 1) Adjustment to Costs to Costs to Impairment of Impairment Achieve, Achieve, Ongoing Settlement Campeche of Bolivia Cinergy Anticipat
Slide 25: Ongoing to Reported Earnings Reconciliation, December 2006 Year-to-date
DUKE ENERGY CORPORATION ONGOING TO REPORTED EARNINGS RECONCILIATION December 2006 Year-to-date (Dollars in millions, except per-share amounts) Special Items (Note 1) Gain on Costs to Costs to Sale of Net Gain on Impairment Impairment Achieve, Achieve, Ongoing Settlement Gain on Sales Interest in Set
Slide 26: Illustrative Ongoing Diluted EPS Split Between Duke Energy and Spectra Energy
Duke Energy Corporation Presentation of Illustrative Ongoing Diluted EPS Split Between Duke Energy and Spectra Energy Year-Ended December 31, 2006 (Unaudited) Consolidated Ongoing Earnings (for the Year-Ended December 31, 2006) (Amounts in millions, except per share data) Duke Energy Corporation Duk
Slide 27: Net Cash Balance Reconciliation
Duke Energy Corporation Net Cash Balance Reconciliation As of December 31, 2006 (Dollars in millions) Less Amounts Duke Energy Included in Duke Energy Before Spin-Off Spin-Off After Spin-off of Spectra of Spectra of Spectra Cash and Cash Equivalents $ 948 $ 387 $ 561 Short-Term Investments 1,514 - 1