Duke Energy Corporation (Holding Company) · NYSE:DUK
Duke Energy Corporation (Holding Company) — Q4 2007 Earnings Presentation
26 slides from Duke Energy Corporation (Holding Company)'s earnings presentation, Feb 5, 2008
Slide 1: Fourth Quarter Earnings Review and 2008 Outlook
February 5, 2008 FOURTH QUARTER EARNINGS REVIEW AND 2008 OUTLOOK Jim Rogers Chairman, President and Chief Executive Officer David Hauser Group Executive and Chief Financial Officer
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: 2007 Earnings Summary
2007 EARNINGS SUMMARY 4Q07 4Q06 2007 2006 Reported Diluted EPS $ 0.21 $ 0.31 $ 1.21 $ 1.57 Special Items - 0.08 0.03 0.08 Discontinued Operations 0.06 (0.16) 0.01 (0.66) Ongoing Diluted EPS $ 0.27 $ 0.23 $1.25 $0.99 Increase in annual ongoing earnings due to: Full year of former Cinergy companies
Slide 4: 2008 Ongoing EBIT Expectations
2008 ONGOING EBIT EXPECTATIONS ($ millions) U.S. Franchised Electric & Gas $ 2,420 Commercial Power 385 Duke Energy International 380 Crescent Resources1 75 Total Ongoing Segment EBIT $ 3,260 Other (Net Expense) (265) Total Ongoing Segment EBIT and Other $ 2,995 EARNINGS PER SHARE EMPLOYEE INCENTIVE
Slide 5: 2007 Highlights – U.S. Franchised Electric & Gas
2007 HIGHLIGHTS – U.S. FRANCHISED ELECTRIC & GAS Reported & Ongoing Segment EBIT ($ millions) 4Q07 4Q06 2007 2006 Reported Segment EBIT $ 519 $ 423 $ 2,305 $ 1,811 Special Items - - - - Ongoing Segment EBIT $ 519 $ 423 $ 2,305 $1,811 FOR THE QUARTER Improvement primarily driven by completion of me
Slide 6: 2007 Highlights – Commercial Power
2007 HIGHLIGHTS – COMMERCIAL POWER Reported & Ongoing Segment EBIT ($ millions) 4Q07 4Q06 2007 2006 Reported Segment EBIT $ 38 $ (19) $ 278 $ 47 Special Items - - - - Ongoing Segment EBIT $ 38 $ (19) $ 278 $ 47 FOR THE QUARTER Improved earnings due primarily to a reduction in net purchase accounti
Slide 7: 2007 Highlights – DEI
2007 HIGHLIGHTS – DEI Reported & Ongoing Segment EBIT ($ millions) 4Q07 4Q06 2007 2006 Reported Segment EBIT $ 105 $ (15) $ 388 $ 163 Special Items - 95 - 150 Ongoing Segment EBIT $ 105 $ 80 $ 388 $ 313 FOR THE QUARTER Ongoing segment EBIT increased due primarily to higher margins at National Meth
Slide 8: 2007 Highlights – Crescent Resources
2007 HIGHLIGHTS – CRESCENT RESOURCES Reported & Ongoing Segment EBIT ($ millions) 4Q07 4Q06 2007 2006 Reported Segment EBIT $ 32 $ 17 $ 61 $ 532 Special Items - - - (246) Ongoing Segment EBIT $ 32 $ 17 $ 61 $ 286 FOR THE QUARTER Higher results due largely to increased legacy land sales and a gain
Slide 9: 2007 Highlights – Other
2007 HIGHLIGHTS – OTHER Reported & Ongoing Net Expense ($ millions) 4Q07 4Q06 2007 2006 Reported Net Expense $ 83 $ 182 $ 277 $ 537 Special Items 9 (96) (42) (193) Ongoing Net Expense $ 92 $ 86 $ 235 $ 344 FOR THE QUARTER 4Q07 ongoing results were essentially flat compared to 4Q06 FOR THE YEAR I
Slide 10: 2007 Highlights – Other Items
2007 HIGHLIGHTS – OTHER ITEMS Net cash balance of approximately $400 million as of 12/31/07 ~$1.1 billion of cash, cash equivalents and short-term investments Net of ~$700 million in short-term commercial paper 2007 interest expense was $685 million compared to $632 million for 2006 Increa
Slide 11: 2008 Financial Assumptions
2008 FINANCIAL ASSUMPTIONS U.S. FE&G key assumptions Normal weather Includes impact of North Carolina rate order Rate reduction effective 1/1/2008 net of one-year rider for shareholders’ portion of merger savings Clean Air amortization ended Effective tax rate of 33% in 2008 Interest e
Slide 12: 2008 Capital Expenditures
2008 CAPITAL EXPENDITURES ($ millions) U.S. Franchised Electric & Gas System Growth $ 1,725 Environmental 475 Nuclear Fuel 250 Maintenance and Other 1,450 Total U.S. Franchised Electric & Gas 3,900 Commercial Businesses Wind 350 International, primarily expansion 350 Environmental1 125 Maintenance a
Slide 13: 2008 Cash Flows
2008 CASH FLOWS ($ millions) Primary Sources Net income $ 1,600 Depreciation & amortization 1,800 Total Sources $ 3,400 Primary Uses Capital and investment expenditures $ (5,100) Dividends (1,150) Other sources/(uses), net (250) Total Uses $ (6,500) Net Cash, Short-term Investments Used and Debt Fin
Slide 14: Resolving Regulatory Uncertainty
RESOLVING REGULATORY UNCERTAINTY Activity Comments Status N.C. energy legislation Passed S.C. energy legislation Passed N.C. rate case Settled Ohio RSP Remand order received IGCC Received CPCN and air permit Cliffside Received CPCN and air permit Ohio energy legislation Working to achi
Slide 15: Internal Scorecard
INTERNAL SCORECARD Operational Current Target Status Generation Nuclear Capacity Factor 92.36% 92.43% FE&G Fossil Commercial Availability 87.03% 86.96% Reliability Power Delivery System Average Interruption Duration Index 133 160 (SAIDI)1 System Average Interruption Frequency (SAIFI)2 1.13 1.30 Gas
Slide 16: Focus for 2008
FOCUS FOR 2008 Asset modernization Proactive regulatory and legislative strategy Focus on operations and costs 16
Slide 17: Value Proposition
VALUE PROPOSITION Proactive regulatory strategy Annual Total Return Profile 5% to 7% CAGR in ongoing diluted 15% EPS through 2012 Annual dividend growth No anticipated equity offerings 10% through 2012 excluding internal plans (e.g., dividend reinvestment plan “DRIP”) 5% Strong balance she
Slide 18: Fourth Quarter Earnings Review and 2008 Outlook
FOURTH QUARTER EARNINGS REVIEW AND 2008 OUTLOOK
Slide 19: Non-GAAP Reconciliations
Duke Energy Corporation Non-GAAP Reconciliations 2007 Earnings Review and 2008 Outlook February 5, 2008 Ongoing Diluted Earnings per Share (“EPS”) The materials for Duke Energy Corporation’s (“Duke Energy”) 2007 Earnings Review and 2008 Outlook presentation include a discussion of ongoing diluted EP
Slide 20: Ongoing Segment EBIT and Other Net Expenses
Ongoing Segment EBIT and Other Net Expenses for 2006 and 2007 and Forecasted Ongoing Segment EBIT and Other Net Expenses for 2008 The materials for Duke Energy’s 2007 Earnings Review and 2008 Outlook presentation include a discussion of ongoing segment EBIT and Other net expenses for the quarterly a
Slide 21: Ongoing to Reported Earnings Reconciliation – December 2006 Quarter
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 Costs to to Impairment Achieve, Ongoing Settlement of Campeche Cinergy Tax Discontinued Total Reported Earnings Reserves
Slide 22: Ongoing to Reported Earnings Reconciliation – December 2006 YTD
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 Sale of Impairment of Achieve, Ongoing Settlement Interest in Campeche Cinergy Tax Discontinued Total Reported Earnin
Slide 23: Ongoing to Reported Earnings Reconciliation – December 2007 Quarter
DUKE ENERGY CORPORATION ONGOING TO REPORTED EARNINGS RECONCILIATION December 2007 Quarter-to-Date (Dollars in millions, except per-share amounts) Special Items (Note 1) Costs to Achieve, Settlement Ongoing Cinergy Reserve Discontinued Total Reported Earnings Merger Adjustment Operations Adjustments
Slide 24: Ongoing to Reported Earnings Reconciliation – December 2007 YTD
DUKE ENERGY CORPORATION ONGOING TO REPORTED EARNINGS RECONCILIATION December 2007 Year-to-Date (Dollars in millions, except per-share amounts) Special Items (Note 1) Costs to Convertible Achieve, Settlement Ongoing Debt Costs, Cinergy IT Severance Reserve Discontinued Total Reported Earnings Gas Spi
Slide 25: Net Cash Balance Reconciliation
Duke Energy Corporation Net Cash Balance Reconciliation As of December 31, 2007 (in millions) Cash and Cash Equivalents $678 Short-Term Investments 437 Subtotal 1,115 Short-term Commercial Paper Outstanding (a) (729) Net Cash Balance (b) $386 (a) Excludes approximately $300 million of commercial pap
Slide 26: Cash Flow Reconciliation Required by SEC Regulation G
Duke Energy Corporation 2007 Earnings Review and 2008 Outlook February 5, 2008 Cash Flow Reconciliation Required by SEC Regulation G ($ in Millions) Forecast 2008 Primary Sources: Net income (1) a $ 1,600 Depreciation & amortization a 1,800 Total Sources 3,400 Primary Uses: Capital and Investment Ex