Duke Energy Corporation (Holding Company) · NYSE:DUK
Duke Energy Corporation (Holding Company) — Q4 2015 Earnings Presentation
82 slides from Duke Energy Corporation (Holding Company)'s earnings presentation, Feb 18, 2016
Slide 1: Fourth Quarter 2015 Earnings Review / Business Update
Presented by Lynn Good, Chairman, President and CEO Steve Young, Executive VP and CFO FOURTH QUARTER 2015 EARNINGS REVIEW // BUSINESS UPDATE
Slide 2: Safe Harbor Statement
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. These fo
Slide 3: Topics for Today's Call
TOPICS FOR TODAY’S CALL Strategic Priorities Lynn Good, Chairman, President & CEO Drivers and principles of our strategic focus Positioning the portfolio Investing in the core businesses 2015 operational highlights Financial Update Steve Young, CFO 2016 adjusted EPS guidance range Confid
Slide 4: Duke Energy's Strategic Priorities
DUKE ENERGY’S STRATEGIC PRIORITIES Context for our strategy Our strategic response Focus on our core domestic regulated and Changing Technology highly-contracted renewables businesses – Drives predictable growth in earnings and cash flows Enhance the customer experience through programs and grid
Slide 5: Pursuing an Exit of Latin American Generation Business
PURSUING AN EXIT OF LATIN AMERICAN GENERATION BUSINESS Duke Energy has retained advisors and Latin American Generation intends to exit the Latin American generation Central America business (excludes the investment in National 650 MW Methanol) Brazil 2,075 MW Ecuador We will be disciplined about
Slide 6: Piedmont Provides Natural Gas Growth Platform
PIEDMONT PROVIDES NATURAL GAS GROWTH PLATFORM Strategic Fit of Piedmont Acquisition Approval Status Low business risk, high quality earnings Stakeholder Filed Approved ~90% regulated Piedmont Shareholders Constructive regulatory jurisdictions Accretive in year one and growing over time F
Slide 7: Repositioning Our Portfolio to Lower-Risk, Higher Quality Core Businesses
REPOSITIONING OUR PORTFOLIO TO LOWER-RISK, HIGHER QUALITY CORE BUSINESSES Exit of merchant Announced plans Duke Energy & Midwest to acquire Progress Energy Generation Piedmont Natural Merge 2014 Business 2Q 2015 Gas 1Q 2016 Duke Energy Began to Announced intent to 2012 enters regulated 1Q 2015 repat
Slide 8: Advancing Our Strategic Investments
ADVANCING OUR STRATEGIC INVESTMENTS Operational Accomplishments Investing in the Core Businesses Improved overall safety measures Regulated Utilities OSHA recordable incidents declined ~20% in Modernize the electric grid to enhance the 2015 vs 2014 customer experience & replace aging infrast
Slide 9: Core Businesses Continue to Deliver Strong Growth into 2016 and Beyond
CORE BUSINESSES CONTINUE TO DELIVER STRONG GROWTH INTO 2016 AND BEYOND Adjusted Diluted Earnings per Share Expectations 2015 Actual 2016 Forecast 2016 – 2020 CAGR Core businesses $4.21 $4.30(1) 4 – 6% International $0.33 $0.30(1) Flat / Modest growth Duke Energy $4.54 $4.50 - $4.70 Core Business Dri
Slide 10: Core Businesses Well-Positioned for 4-6% Adjusted EPS Growth Through 2020
CORE BUSINESSES WELL-POSITIONED FOR 4-6% ADJUSTED EPS GROWTH THROUGH 2020 Incremental Growth Retail load growth >0.5% Opportunities Piedmont Natural Gas acquisition Additional wholesale contracts 5 to 6 % growth Additional capital investments – Commercial & Regulated renewables 4–6% – Fleet
Slide 11: Regulated Investments Drive Earnings Base Growth of 5% Through 2020
REGULATED INVESTMENTS DRIVE EARNINGS BASE GROWTH OF 5% THROUGH 2020 ~$25 B of regulated growth investments Regulated Growth Investments (2016-2020) drive earnings base (2016-2020) (1) $8 billion: Grid investments, providing ($ in billions) $70 enhanced reliability and other customer $67 $61 $63 be
Slide 12: Regulated Utilities Weather-Normal Volume Trends
REGULATED UTILITIES WEATHER-NORMAL VOLUME TRENDS 2016 Retail Load Forecast Summary Retail customer & volume trends Residential (+0.5% 2016E vs. 2015) ~1.3% growth in average number of customers Usage per customer declines are moderating Median household incomes continue to recover 1.3% 1.2% Co
Slide 13: Effective Cost Management Efforts Continue in Low Load Growth Environment
EFFECTIVE COST MANAGEMENT EFFORTS CONTINUE IN LOW LOAD GROWTH ENVIRONMENT Demonstrated ability to control O&M spending Non-Rider recoverable O&M through 2020 (based on “Non-Rider Recoverable O&M”) ($ in billions) GAAP O&M Targeting flat O&M from GAAP O&M GAAP O&M GAAP O&M $5.8 $5.9 $5.9 $6.0 2016
Slide 14: Financing Our Growth Investments
FINANCING OUR GROWTH INVESTMENTS(1) Key Messages Forecasted 2016 Summary Cash Flows (1) Committed to maintaining strong credit Adjusted net income (based on midpoint of 2016 guidance range) $ 3,175 Depreciation & amortization 3,950 quality, including investment-grade ratings Deferred and accrued t
Slide 15: Dividend Commitment Enhances Shareholder Value Proposition
DIVIDEND COMMITMENT ENHANCES SHAREHOLDER VALUE PROPOSITION DUK annualized dividend per share(1) Dividend Central to Value Proposition Paid a quarterly cash dividend for 90 consecutive years Recently doubled dividend growth rate (to 4% annually) Annual dividend growth consistent with long-term
Slide 16: Key Investor Considerations
KEY INVESTOR CONSIDERATIONS Large-scale utility in the U.S. Portfolio of lower risk, with valuable geographic higher-quality diversity & competitive rates core businesses Highly defined & achievable Attractive dividend yield with long-term growth growth commitment − Long-term 4 - 6%(1) Core Business
Slide 17: Key Takeaways
KEY TAKEAWAYS Duke is strategically responding to an evolving landscape Duke will optimize the core domestic regulated utility and energy infrastructure businesses – Investment opportunities in high-quality, growing domestic electric and gas infrastructure businesses – Lower business risk and volati
Slide 18: Appendix Materials
APPENDIX MATERIALS Item Slides 2015 performance against guidance assumptions 20-24 2016 guidance support 25-41 Financing assumptions 42-48 Regulated Utilities supplement 49-51 International Energy supplement 52-57 Commercial Portfolio supplement 58-60 Coal ash supplement 61-64 Upcoming events & othe
Slide 19: Financial Supplement
Financial Supplement FOURTH QUARTER 2015 EARNINGS REVIEW AND BUSINESS UPDATE 19
Slide 20: 2015 Performance Against Guidance Assumptions
2015 performance against guidance assumptions FOURTH QUARTER 2015 EARNINGS REVIEW AND BUSINESS UPDATE 20
Slide 21: Key 2015 Adjusted Earnings Guidance Assumptions
KEY 2015 ADJUSTED EARNINGS GUIDANCE ASSUMPTIONS ($ in millions) Original 2015 2015 Actual assumptions (1) Adjusted segment income / (expense) (2): Regulated Utilities $2,950 $2,972 International Energy $345 $225 Commercial Portfolio $185 $140 Other ($220) ($185) Duke Energy Consolidated $3,260 $3,15
Slide 22: On-Track to Achieve Guaranteed Fuel and Joint Dispatch Savings
ON-TRACK TO ACHIEVE GUARANTEED FUEL AND JOINT DISPATCH SAVINGS AHEAD OF SCHEDULE Fuel and Joint Dispatch (JDA) Savings Quarterly Savings Results ($ in millions) Guaranteed $687 million in fuel and joint $50 $700 dispatch savings to Carolinas customers $600 through mid-2017 (1) $40 $500 – Achieved cu
Slide 23: Weather Normalized Volume Trends, by Jurisdiction
WEATHER NORMALIZED VOLUME TRENDS, BY JURISDICTION Rolling Twelve Months, as of 12/31/2015 Duke Energy Duke Energy Duke Energy Duke Energy Duke Energy Regulated Carolinas Progress Florida Indiana Ohio/Kentucky Utilities 3.5% 2.7% 1.6% 1.4% 0.9% 0.9% 1.0% 0.7% 0.6% 0.6% 0.4% 0.5% 0.5% 0.1% -0.2% -0.1%
Slide 24: Regulated Utilities Quarterly Weather Impacts
REGULATED UTILITIES QUARTERLY WEATHER IMPACTS Weather segment 2015 2014 income to normal: Pretax impact Weighted avg. EPS impact – Pretax impact Weighted avg. EPS impact – diluted shares favorable / diluted shares favorable / (unfavorable) (unfavorable) First Quarter 110 708 $0.10 $100 706 $0.09 Sec
Slide 25: 2016 Guidance Support
2016 guidance support FOURTH QUARTER 2015 EARNINGS REVIEW AND BUSINESS UPDATE 25
Slide 26: Key 2016 Forecast Assumptions
KEY 2016 FORECAST ASSUMPTIONS CORE BUSINESSES Normal weather ~0.6% retail load growth Lower O&M; ~4% below 2015 (without NCEMPA) Normal wind conditions for Commercial Renewables Effective tax rate of ~32-33% INTERNATIONAL ▲Normal hydro dispatch in Brazil beginning in 2H 2016 (after complet
Slide 27: Key 2016 Adjusted Earnings Guidance Assumptions
KEY 2016 ADJUSTED EARNINGS GUIDANCE ASSUMPTIONS ($ in millions) 2015 2016 Actual Assumptions 2016 Interest Expense Assumption (Consolidated Total $1,780) Adjusted segment income (expense) (1): Regulated Utilities $2,972 $3,090 $450 International Energy $225 $210 $60 Commercial Power $140 $140 $70 $1
Slide 28: 2015-2016 Adjusted Diluted EPS Waterfall
2015 – 2016 ADJUSTED DILUTED EPS WATERFALL Favorable Regulated Utilities Commercial DEI Other Sale of 2015 $0.23 Portfolio ($0.03) ($0.12) Midwest Weather $0.12 Generation ($0.06) ($0.08) ▲ Improved hydrology $4.50 - $4.70 ▼ Regulatory ▲ Renewable ▼ FX ▼ Higher $4.54 lag growth capital ▼ NMC interes
Slide 29: Key 2016 Earnings Sensitivities
KEY 2016 EARNINGS SENSITIVITIES Driver EPS Impact Regulated Utilities 100 bps change in earned return on equity +/- $0.40 $1 billion change in rate base +/- $0.08 1% change in Regulated Utilities volumes +/- $0.10 International 10% change in BRL/US$ foreign exchange rate +/- $0.01 - 0.02 $10/barrel
Slide 30: Regulated Adjusted Book Return on Equity
REGULATED ADJUSTED BOOK RETURN ON EQUITY (ROE) (1) 2015 Adjusted Book ROEs 2016 Forecast Adjusted Book ROEs 11.8% 11.0% – 11.5% 10.4% 10.0% 9.9% 10.0% – 10.5% 10.0% – 10.5% 9.5% – 10.0% (2) Carolinas Florida Indiana OH/KY Current retail allowed ROE’s are: – Carolinas – 10.2%(3) – Florida – 9.5% -
Slide 31: 2016 Pension Funding and Costs
2016 PENSION FUNDING AND COSTS Duke Energy’s pension funding policy: – The company is committed to funding its pension obligations and has consistently contributed above legal minimum Pension Costs 2014A 2015A 2016E requirements ($ in millions) – In September 2013, Duke Energy adopted a de-risking
Slide 32: Impact of Extension of Bonus Depreciation Through 2019
IMPACT OF EXTENSION OF BONUS DEPRECIATION THROUGH 2019 High Level Impact of Bonus Depreciation Key Considerations ($ amounts in millions) Cash Flows – The extension of bonus depreciation results in ~$2.7 billion of incremental after-tax deductions from $800 2015-2019 – These deductions will result
Slide 33: Regulated Utilities Weather-Normalized Volume Trends
REGULATED UTILITIES WEATHER-NORMALIZED VOLUME TRENDS (in % change since prior year) Residential Commercial 1.0% 0.8% 0.7% 0.5% 0.5% 0.5% 0.3% -0.1% (1) (1) 2013A 2014A 2015A 2016E 2013A 2014A 2015A 2016E Industrial Regulated Utilities Total 0.9% 1.0% 1.0% 0.8% 0.6% 0.6% 0.6% 0.6% (1) (1) 2013A 2014A
Slide 34: Regulated Utilities End of Year Earnings Base
REGULATED UTILITIES END OF YEAR EARNINGS BASE (1) ($ in billions) 2014A 2015A 2016E 2017E 2018E 2019E 2020E Duke Energy Carolinas $19.8 $20.4 $21.8 $22.6 $23.6 $24.9 $26.3 Duke Energy Progress 11.6 13.6 14.3 15.1 15.8 16.6 17.1 Duke Energy Florida 8.7 9.4 10.2 11.2 11.5 12.3 13.1 Duke Indiana 7.3 7.
Slide 35: Major Capital Projects Timeline and Recovery Mechanisms
MAJOR CAPITAL PROJECTS TIMELINE AND RECOVERY MECHANISMS Spent 2016 2017 2018 2019 2020 Recovery Mechanism (Inception – 2015) Grid Investments Indiana - TDSIC $0 $1.3 billion Rider Recovery Ohio / Kentucky Ongoing $1.6 billion Rider Recovery Carolinas / Florida / Indiana Ongoing $ 5.1 billion Base Ra
Slide 36: Capital Expenditures, by Recovery Mechanism
CAPITAL EXPENDITURES, BY RECOVERY MECHANISM Growth Capital – By Recovery Mechanism Growth Capital by Project – 2016 through 2020 Amount Growth Capital Type ($ in Billions) Recovery Mechanism Generation (including Nuclear Projects) 22% Carolinas / Indiana $3.9 Base Rates Nuclear Fuel $2.4 Fuel Clause
Slide 37: Capital Expenditures Profile
CAPITAL EXPENDITURES PROFILE (1) ($ IN MILLIONS) Regulated Utilities 2015A 2016E 2017E 2018E 2019E 2020E 2016 - 2020 New Generation $ 1,921 $ 1,275 $ 925 $ 825 $ 1,125 $ 950 $ 5,100 Major Nuclear Projects 289 175 200 75 25 25 500 Nuclear Fuel 487 525 425 425 475 550 2,400 Grid Modernization 161 425
Slide 38: Capital Expenditures by Utility
CAPITAL EXPENDITURES BY UTILITY (INCLUDING AFUDC DEBT)(1) ($ in millions) Duke Energy Carolinas 2015A 2016E 2017E 2018E 2019E 2020E 2016 - 2020 New Generation $ 231 $ 400 $ 125 $ 150 $ 350 $ 425 $ 1,450 Major Nuclear Projects 111 50 50 - - - 100 Nuclear Fuel 295 325 225 225 325 350 1,450 Grid Modern
Slide 39: Capital Expenditures by Utility (Cont'd)
CAPITAL EXPENDITURES BY UTILITY, (CONT’D) (1) ($ in millions) Duke Energy Florida 2015A 2016E 2017E 2018E 2019E 2020E 2016 - 2020 New Generation $ 212 $ 675 $ 550 $ 200 $ 125 $ 125 $ 1,675 Major Nuclear Projects 17 - - - - - - Grid Modernization 32 50 25 125 500 500 1,200 T&D Expansion 178 200 400 4
Slide 40: Capital Expenditures by Utility (Cont'd)
CAPITAL EXPENDITURES BY UTILITY, (CONT’D) (1) ($ in millions) Duke Energy OH / KY 2015A 2016E 2017E 2018E 2019E 2020E 2016 - 2020 New Generation $ - $ - $ - $ - $ - $ - $ - Grid Modernization 5 25 50 25 25 - 125 T&D Expansion 226 250 300 300 300 325 1,475 Customer Additions 53 25 25 25 25 25 125 Env
Slide 41: Environmental Compliance Expenditures by Category
ENVIRONMENTAL COMPLIANCE EXPENDITURES BY CATEGORY ($ in millions) Category 2016 – 2018 2019 - 2020 Key Messages Air (MATS) $50 $100 Total estimated Water (316b) $250 environmental compliance expenditures of ~$2.65 Waste (conversions) (1) $950 billion in 2016-2020 Waste (closure) $1,300 – Excludes
Slide 42: Financing Assumptions
Financing assumptions FOURTH QUARTER 2015 EARNINGS REVIEW AND BUSINESS UPDATE 42
Slide 43: 2016 Financing Plan
2016 FINANCING PLAN (AS OF FEBRUARY 18, 2016) (1) ($ in millions) $2,000 $1,800 Represents expected CR3 $1,600 financing of ~$1.3B $1,400 $1,200 $1,000 $800 $600 $400 $200 $- Holding Duke Duke Duke Duke Duke Duke Renewables International Company Energy Energy Energy Energy Energy Energy Carolinas Pr
Slide 44: Liquidity Summary
LIQUIDITY SUMMARY (AS OF DECEMBER 31, 2015) ($ in millions) Duke Duke Duke Duke Duke Duke Duke Energy Energy Energy Energy Energy Energy Energy Carolinas Progress Florida Indiana Ohio Kentucky Total Master Credit Facility (1) $ 3,475 $ 800 $ 1,000 $ 1,200 $ 600 $ 300 $ 125 $ 7,500 Less: Notes payabl
Slide 45: Credit Ratings
CREDIT RATINGS (AS OF FEBRUARY 18, 2016) Holding companies Operating companies Fitch Moody's S&P Fitch Moody's S&P DUKE ENERGY Watch-N Negative Negative DUKE ENERGY CAROLINAS Stable Stable Negative Senior Unsecured Debt BBB+ Baa1 BBB+ Senior Secured Debt AA- Aa2 A Commercial Paper F-2 P-2 A-2 Senior
Slide 46: Simplified Financing Structure
SIMPLIFIED FINANCING STRUCTURE Duke Energy (HoldCo) Cinergy Corp. Duke Energy Progress Energy (HoldCo) International (HoldCo) (1) Duke Energy Duke Energy Duke Energy Duke Energy Duke Energy Carolinas Ohio Indiana Progress Florida Duke Energy Commercial Paper and LT Financings Duke Energy Money Pool
Slide 47: Long-Term Debt Maturities
LONG-TERM DEBT MATURITIES (1) ($ in millions) $2,611 $134 Regulated Utilities Maturities Detail $2,186 2016 2017 2018 $1,997 $258 $173 Duke Energy Carolinas (2) $ 356 $ 115 $ 1,204 Duke Energy Progress (2) 2 452 3 $1,727 $828 Duke Energy Florida (2) 13 257 512 $1,024 Duke Energy Indiana (3) 547 2 3
Slide 48: Credit Metrics
CREDIT METRICS (1) FFO/Debt (4) 31% 32% 31% 30% 27% 27% 27% 25% 25% 24% 23% 22% 22% 20% 19% 19% 17% 17% 2014A 2015A 2016E 2014A 2015A 2016E 2014A 2015A 2016E 2014A 2015A 2016E 2014A 2015A 2016E 2014A 2015A 2016E Duke Carolinas Duke Progress (5) Duke Florida (6) Duke Indiana Duke Ohio / Consolidated
Slide 49: Regulated Utilities Supplement
Regulated Utilities supplement FOURTH QUARTER 2015 EARNINGS REVIEW AND BUSINESS UPDATE 49
Slide 50: Current Rate Information by Jurisdiction
CURRENT RATE INFORMATION BY JURISDICTION North South Ohio Kentucky Florida Indiana Carolina Carolina Electric Gas Electric Gas $15.7B (1) (DEC) Retail Rate Base $9.9B (2) $7.1B (3) $1.1B $900M (4) $600M (5) $200M (6) $7.8B (1) (DEP) $1.2 B (DEC) 2Q 2015 $0.3M Wholesale Rate Base $1.0B (2) $600M N/A
Slide 51: Current Rate Information by Jurisdiction (Cont'd)
CURRENT RATE INFORMATION BY JURISDICTION (CONT’D) General Rate Case Provisions North South Ohio Kentucky Carolina Carolina Florida Indiana Electric Gas Electric Gas Notice of Intent Yes Yes Yes Yes (2) Yes Yes Yes Yes Required? Notice Period 30 Days 30 Days 60 Days Varies 30 Days 30 Days 28 Days 28
Slide 52: International Energy Supplement
International Energy supplement FOURTH QUARTER 2015 EARNINGS REVIEW AND BUSINESS UPDATE 52
Slide 53: Brazil's Reservoir Levels - SE Region
BRAZIL’S RESERVOIR LEVELS – SE REGION 70 63.8 Reservoir Level (% Maximum Volume) 60 62.5 62.9 60.8 (1) 48.4 54.1 55.1 50 44.4 48.7 45.5 45.1 40 37.4 41.6 43.2 29.8 34.1 37.5 36.1 32.3 29.8 36.0 27.6 27.5 30 33.5 28.9 28.5 20 19.4 20.6 16.8 10 0 Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 201
Slide 54: 2015 Rainfall - Southeast Brazil
2015 RAINFALL – SOUTHEAST BRAZIL (% OF LONG TERM AVERAGE) Rainfall – Southeast Region (% of historical average) 350 300 Energy Inflow (% long term average) 250 200 150 134 120 118 104 109 103 99 99 92 92 100 78 89 59 90 92 89 53 82 85 85 75 50 63 63 68 38 38 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct
Slide 55: Brazil - Highly Contracted Business Reduces Risk
BRAZIL – HIGHLY CONTRACTED BUSINESS REDUCES RISK – Highly contracted position in Brazil – average tenor over 5 years – 2016 contracted position similar to 2015, considering the recent drought scenario – Revenue: – New contracts priced at current market prices as contracts mature Avg: Avg: Avg: Avg:
Slide 56: Duke Energy International - Foreign Currency
DUKE ENERGY INTERNATIONAL – FOREIGN CURRENCY Brazil FX – R$ / US$ 6.00 5.50 5.00 4.50 Unfavorable 4.00 3.50 3.00 Favorable 2.50 2.00 1.50 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Real/US Dollar Historical DEI Forecast Brazilian Real – Annual Average Key Earnings Sensitivity to
Slide 57: Duke Energy International - National Methanol Company
DUKE ENERGY INTERNATIONAL – NATIONAL METHANOL COMPANY (NMC) • Background – NMC is a producer of methanol and MTBE in Saudi Arabia – Current ownership: Saudi Basic Industries Corporation (SABIC) - 50%, Celanese - 25%, and Duke Energy - 25% – JV agreement extended to 2032 (effective April 1, 2010) – U
Slide 58: Commercial Portfolio Supplement
Commercial Portfolio supplement FOURTH QUARTER 2015 EARNINGS REVIEW AND BUSINESS UPDATE 58
Slide 59: Duke Energy Renewables - Grown to Scale Since Entry in 2007
DUKE ENERGY RENEWABLES – GROWN TO SCALE SINCE ENTRY IN 2007 Los Vientos Wind Farm Current Operating Portfolio of ~2,500 net owned MW (1) Wind – 2,050 MW (1) 100-percent capacity of the entire portfolio totals 3,040 MW. A full list of generation facilities can by found at http://www.duke- Solar – 450
Slide 60: Duke Energy Commercial Pipeline Investments
DUKE ENERGY COMMERCIAL PIPELINE INVESTMENTS Atlantic Coast Pipeline Harrison Co., WV Duke Energy Share: 40%(1) Total Project Cost: $5 Billion Expected In-Service: late 2018 Project is over 90% subscribed Duke Energy utilities served: DEC & DEP Approval Status: – FERC approval expected la
Slide 61: Coal Ash Supplement
Coal Ash Supplement FOURTH QUARTER 2015 EARNINGS REVIEW AND BUSINESS UPDATE 61
Slide 62: North Carolina Stations and Ash Storage Locations
NORTH CAROLINA STATIONS AND ASH STORAGE LOCATIONS W.S. Lee Excavation – May 2015 FOURTH QUARTER 2015 EARNINGS REVIEW AND BUSINESS UPDATE 62
Slide 63: South Carolina & Midwest Stations and Ash Storage Locations
SOUTH CAROLINA & MIDWEST STATIONS AND ASH STORAGE LOCATIONS FOURTH QUARTER 2015 EARNINGS REVIEW AND BUSINESS UPDATE 63
Slide 64: NC Coal Ash Management Act Next Steps
NC COAL ASH MANAGEMENT ACT (CAMA) NEXT STEPS Timing for final risk classifications for NC coal ash basins: January – DEQ releases proposed basin rankings • February - March – Public comment period (meetings are scheduled) • April – DEQ provides basin ranking information to NC Coal Ash Management C
Slide 65: Upcoming Events & Other
Upcoming Events & Other FOURTH QUARTER 2015 EARNINGS REVIEW AND BUSINESS UPDATE 65
Slide 66: Upcoming Events
UPCOMING EVENTS Event Date 1Q 2016 earnings call (tentative) May 3, 2016 2Q 2016 earnings call (tentative) August 4, 2016 3Q 2016 earnings call (tentative) November 3, 2016 FOURTH QUARTER 2015 EARNINGS REVIEW AND BUSINESS UPDATE 66
Slide 67: Investor Relations App
INVESTOR RELATIONS APP • Free mobile app for Investor Relations materials now available for iPhone, iPad, and Android mobile devices • The Duke Energy app provides mobile access to commonly used IR materials, including: – SEC Filings – Earnings Materials – Company Presentations – Press Releases • Se
Slide 68: Investor Relations Contact Information
INVESTOR RELATIONS CONTACT INFORMATION Bill Currens, Vice President Investor Relations − Bill.Currens@duke-energy.com − (704) 382-1603 Charlie Taft, Manager Investor Relations − Charlie.Taft@duke-energy.com − (704) 382-2516 Chris Bauer, Manager Investor Relations − Chris.Bauer@duke-energy.com − (704
Slide 69: For additional information, visit duke-energy.com/investors
For additional information on Duke Energy, please visit: www.duke-energy.com/investors
Slide 70: Non-GAAP Reconciliations
Duke Energy Corporation Non-GAAP Reconciliations Fourth Quarter Earnings Review & Business Update February 18, 2016 Adjusted Diluted Earnings per Share (EPS) The materials for Duke Energy Corporation’s (Duke Energy) Fourth Quarter Earnings Review and Business Update on February 18, 2016, include a d
Slide 71: Non-GAAP Reconciliations: Guidance Ranges
range of $4.20 - $4.45 per share including International Energy’s approximate expected contribution to this guidance of $0.60 per share, the original forecasted 2015 adjusted diluted EPS outlook range of $4.55 - $4.75 per share, and the forecasted 2016 adjusted diluted EPS outlook range of $4.50 - $
Slide 72: Non-GAAP Reconciliations: Adjusted Effective Tax Rate
materials also include a discussion of the 2015 and 2016 forecasted adjusted ETR. Adjusted ETR is a non- GAAP financial measure as the rate is calculated using a pretax earnings and income tax expense, both adjusted for the impact of special items and the mark-to-market impacts of economic hedges in
Slide 73: Available Liquidity and Business Mix Percentages
Available Liquidity The materials for Duke Energy’s Fourth Quarter Earnings Review and Business Update on February 18, 2016 include a discussion of Duke Energy’s available liquidity balance. The available liquidity balance presented is a non-GAAP financial measure as it represents Cash and cash equi
Slide 74: Adjusted to Reported Earnings Reconciliation, 2015
DUKE ENERGY CORPORATION ADJUSTED TO REPORTED EARNINGS RECONCILIATION Twelve Months Ended December 31, 2015 (Dollars in millions, except per-share amounts) Special Items Ash Basin Costs to Midwest Settlement Cost Adjusted Achieve, Edwardsport Generation and Savings Discontinued Total Reported Earning
Slide 75: Adjusted to Reported Earnings Reconciliation, 2014
DUKE ENERGY CORPORATION ADJUSTED TO REPORTED EARNINGS RECONCILIATION Twelve Months Ended December 31, 2014 (Dollars in millions, except per-share amounts) Special Items Costs to Economic Achieve, Midwest International Hedges Adjusted Progress Asset Generation Litigation Asset Tax (Mark-to- Discontin
Slide 76: Adjusted to Reported Earnings Reconciliation, 2011
DUKE ENERGY CORPORATION ADJUSTED TO REPORTED EARNINGS RECONCILIATION Twelve Months Ended December 31, 2011 (Dollars in millions, except per-share amounts) Special Items Costs to Achieve, Midwest Economic Adjusted Progress Edwardsport Generation Hedges (Mark- Discontinued Total Reported Earnings Merg
Slide 77: Adjusted Effective Tax Reconciliation, 2015
DUKE ENERGY CORPORATION ADJUSTED EFFECTIVE TAX RECONCILIATION Three Months and Years Ended December 31, 2015 (Dollars in Millions) Three Months Ended Years Ended December 31, 2015 December 31, 2015 Balance Effective Tax Rate Balance Effective Tax Rate Adjusted Earnings, Pre-Tax Income* $ 882 $ 4,634
Slide 78: Adjusted Effective Tax Reconciliation, 2014
DUKE ENERGY CORPORATION ADJUSTED EFFECTIVE TAX RECONCILIATION Three Months and Years Ended December 31, 2014 (Dollars in Millions) Three Months Ended Years Ended December 31, 2014 December 31, 2014 Balance Effective Tax Rate Balance Effective Tax Rate Adjusted Earnings, Pre-Tax Income* $ 873 $ 4,715
Slide 79: Available Liquidity Reconciliation
Duke Energy Corporation Available Liquidity Reconciliation As of December 31, 2015 (In millions) Cash and Cash Equivalents $ 857 Less: Certain Amounts Held in Foreign Jurisdictions (508) Less: Unavailable Domestic Cash (37) 312 Plus: Remaining Availability under Master Credit Facility 3,674 Total Av
Slide 80: Operations, Maintenance and Other Expense
Duke Energy Corporation Operations, Maintenance and Other Expense (In millions) Years Ended Pro Forma(a) Actual Actual Forecast December 31, 2011 December 31, 2014 December 31, 2015 December 31, 2016 Operation, maintenance and other (b) $5,806 $5,856 $5,871 $5,960 Adjustments: Costs associated with
Slide 81: 2016 Forecasted Cash Flow Reconciliation
Duke Energy Corporation 2016 Forecasted Cash Flow Reconciliation, Required by SEC Regulation G 2016 Analyst Meeting February 18, 2016 ($ in millions) Forecast 2016 Primary Sources: Adjusted net income (1) (a) $ 3,175 Depreciation & amortization (a) 3,950 Deferred and accrued taxes (a) 1,450 Other so
Slide 82: Adjusted Book Return on Equity (ROEs)
DUKE ENERGY CORPORATION ADJUSTED BOOK RETURN ON EQUITY (ROEs) dollars in millions Duke Energy Duke Energy Duke Energy Duke Energy Duke Energy Ohio Regulated Carolinas Progress Total Carolinas Florida Indiana Utilities Reported Net Income 2015 $ 1,081 $ 566 $ 1,647 $ 599 $ 316 $ 191 (2) Special Items