Duke Energy Corporation (holding Company) · NYSE:DUK
Duke Energy Corporation (holding Company) — SouthEast Invest 2006
23 slides from Duke Energy Corporation (holding Company)'s conference presentation, Apr 6, 2006
Slide 1: The "New" Duke Energy
The “New” Duke Energy David Hauser, CFO SouthEast Invest 2006 April 6, 2006
Slide 2: Safe Harbor Statement / Reg G Disclosure
Safe Harbor Statement This document includes statements concerning future company performance which are forward-looking statements within the meaning of the securities laws. Actual results may materially differ from those discussed in these forward-looking statements, and you should refer to the add
Slide 3: Agenda
Agenda • Business review • Key challenges for the industry • Merger scorecard • Financial expectations • Commitment to shareholders 3
Slide 4: The "New" Duke Energy
The “New” Duke Energy Total Assets* $ 70+ B Market Capitalization ~ $ 36 B Retail Customers 5.5 million Net Generation Capacity 40,000+ MW * as of 9/30/2005 4
Slide 5: North American Assets
id North American Assets 4 dé : fe Duke Energy. <s » Vcuarit PLAINFIELD Og Shoou Ww CHARLO % oe eS f { SouthEast Invest 2006 Right Action. Right Direction. Right Time. Corporate Headquarters Major Office Location DEGT — Natural Gas Storage DEGT — Natural Gas Processing Plant DEGT — Wholesale Generat
Slide 6: Latin American Assets
Latin American Assets Mexico City Guatemala City • 4,000+ MW • 8 countries: Brazil, Lima Argentina, Peru, Bolivia, Ecuador, El Salvador, Guatemala, and Mexico Sao Paulo Buenos Aires 6
Slide 7: US Franchised Electric & Gas
US Franchised Electric & Gas • 5 states: North Carolina, South Carolina, Indiana, Ohio and Kentucky • 47,000 square miles of service area • ~28,000 MW • 3.8 million retail electric customers • 500,000 retail gas customers 7
Slide 8: 5 Key Power Industry Challenges
5 Key Power Industry Challenges 1 Fuel flexibility 2 Power price shocks 3 Environmental issues 4 Resource adequacy 5 Growth 8
Slide 9: Fuel Flexibility
Meeting Challenge #1 Fuel Flexibility Comparison of Generation Fuel Mix 100% 4% 9% 8% 6% 90% 80% 21% 25% 70% Duke Energy’s diverse 60% 64% fuel mix mirrors the 50% overall industry mix 50% 47% 40% 30% 20% Other 26% Natural Gas 10% 20% 20% Coal 0% Nuclear US Generation Duke Energy Net Duke Energy MW
Slide 10: Power Price Shocks
Meeting Challenge #2 Power Price Shocks Striving to minimize price increases • Fuel diversity across fleet • Economies of scale in fuel purchasing and efficient fuel delivery systems • Retail rates below national average • Focus on energy efficiency and conservation 10
Slide 11: Environmental Issues
Meeting Challenge #3 Environmental Issues Expect to spend approximately $2.4B through 2008 • Install 25 scrubbers Allows for fuel flexibility with different types of coal Cleaner coal gives flexibility with emissions allowances • Aspire to have industry’s cleanest coal fleet by 2009 • Shape US c
Slide 12: Resource Adequacy
Meeting Challenge #4 Resource Adequacy • Exploring new coal plant in the Carolinas • Pursuing IGCC plant in Indiana • Announced plans for a potential new nuclear plant in South Carolina, with Southern Company • Capital commitment will require pre-approval of projects and assurance of adequate cost r
Slide 13: Growth
Meeting Challenge #5 Growth Growth through… Organic growth: 1.5% Merger savings in near-term Investing in new base load generation and environmental compliance longer term with timely recovery of capital 13
Slide 14: Earning the Right
Earning the Right Closed merger ahead of schedule Obtained regulatory approvals in 5 states Increased Duke Energy’s dividend by 12.7% Achieve successful integration & merger savings 14
Slide 15: Measuring Success: Merger Scorecard
Measuring Success e c a rd S c o r erg er sults Approximately Approximately M $650 $650 MM MM ia l Re . F i na nc r kfo r ce 1 otal w o e __ T a c h i ev Aggregate AggregateNetNetSavings Savings sts t o C o during duringinitial initial55years _ _ -fu e l O&M years n lts __ N o l R e s u er ati ona 2
Slide 16: Reporting Segments
Reporting Segments Segment Leaders Businesses Jim Turner Franchised electric & gas utilities in Southeast & US Franchised Tom O’Connor Midwest (Duke Energy Carolinas, Duke Energy Electric & Gas Indiana, Duke Energy Ohio and Kentucky) Ruth Shaw Natural Gas Fred Fowler Natural gas transmission & stora
Slide 17: 2006 Ongoing EBIT Expectations: Merger-related Impacts
Merger-related EBIT Impacts 2006 Ongoing EBIT Expectations Merger-related EBIT Impacts: ($ MM) Cinergy Contribution (9 months) $ 800 Merger-related Savings (9 months) 140 Returned to Customers (7 months) (140) Purchase Accounting 60 Note: Ongoing EBIT excludes Cost to Achieve 17
Slide 18: 2006 Ongoing EBIT Expectations by Reporting Segment
April 1 2006 Ongoing EBIT Expectations Reporting Segment: ($ MM) US Franchised Electric & Gas $ 1,950 Natural Gas Transmission 1,390 Field Services 500 Crescent Resources 250 International 275 North American Nonregulated 325 Generation & Marketing Other (250) 18
Slide 19: Stock Buyback Program
Stock Buyback Program Duke Energy resumed $2.5 B stock buyback program on March 13 Board approved up to $1B in 2006 2006 program is not accelerated As of March 31, repurchased 3 million shares at an average price of $ 29.1275 19
Slide 20: Predictable, Stable Earnings Stream
Predictable, Stable Earnings Stream Largest, most diversified regulated platform in North America Low-risk gas platform: FERC, NEB, OEB Integrated electric platform in 5 states today 2006 Ongoing EBIT* ~$3.34 B Regulated 71.2% Nonregulated 28.8% *Excludes “Other” 20
Slide 21: Unlocking the Value of Our Portfolio
Unlocking the Value of Our Portfolio • Strong balance sheet and solid cash generation from operations • Continuous refinement and assessment of our portfolio • Finding the right combination of assets to increase shareholder value Sum-of-the-parts analysis of our portfolio indicates our share price s
Slide 22: Commitment to Investors
Commitment to Investors Focused on what matters most to you: Growing earnings and dividends over time Achieving the full value of our portfolio Reinvesting in the business Developing a strong leadership team with a deep bench Delivering clear and transparent communications 22
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