Duke Energy Corporation (Holding Company) · NYSE:DUK
Duke Energy Corporation (Holding Company) — Investor Day (February 2010)
94 slides from Duke Energy Corporation (Holding Company)'s investor day presentation, Feb 16, 2010
Slide 1: Duke Energy Investor and Analyst Meeting
DUKE ENERGY INVESTOR AND ANALYST MEETING February 16, 2010
Slide 2: Welcome and Safe Harbor Statement
WELCOME AND SAFE HARBOR STATEMENT Stephen De May Senior Vice President, Investor Relations and Treasurer
Slide 3: 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 addition
Slide 4: Today's Agenda
TODAY’S AGENDA Welcome & Safe Harbor Stephen De May Opening Remarks Jim Rogers U.S. Franchised Electric & Gas Jim Turner Regulated Generation Dhiaa Jamil Commercial Businesses Keith Trent Financial Overview Lynn Good Q&A and Wrap-Up Jim Rogers 4 Investor and Analyst Meeting, February 16, 2010
Slide 5: Duke Energy Overview: Business Mix
DUKE ENERGY OVERVIEW DUKE ENERGY BUSINESS MIX * 77% 14% 9% U.S. Franchised Electric & Gas Commercial Power International > 27,000 MW of regulated generation > 4,000 MW of primarily Latin American > 7,600 MW of unregulated generation > Electric transmission & distribution generation assets > Wind and
Slide 6: Overview of Corporate Structure
OVERVIEW OF CORPORATE STRUCTURE Duke Energy U.S. FRANCHISED ELECTRIC AND GAS COMMERCIAL POWER INTERNATIONAL North and South Wind Business DE Carolinas Carolina Duke Energy Retail DE Indiana Indiana Sales (DERS) DE Ohio Midwest Coal Ohio T&D Generation (1) (including DE Kentucky) Ohio Gas Midwest Gas
Slide 7: Today's Presenters
TODAY’S PRESENTERS Jim Dhiaa Keith Trent, Lynn Turner, Jamil, Group Group Executive and President — Good, Group Group Executive; Executive, Chief Commercial Executive and Chief President and Chief Generation Officer Businesses Financial Officer Operating Officer — and Chief Nuclear U.S. Franchised O
Slide 8: Investor and Analyst Meeting, February 16, 2010
Investor and Analyst Meeting, February 16, 2010 8
Slide 9: Opening Remarks
OPENING REMARKS Jim Rogers Chairman, President and Chief Executive Officer
Slide 10: 2009 Financial Highlights
2009 FINANCIAL HIGHLIGHTS 4Q09 4Q08 2009 2008 Reported Diluted EPS $ 0.26 $ 0.26 $0.83 $ 1.07 Adjustments 0.02 0.06 0.40 0.20 Discontinued Operations - - (0.01) (0.01) Extraordinary Items - (0.05) - (0.05) Adjusted Diluted EPS $ 0.28 $ 0.27 $1.22 $1.21 Measure Target Result Adjusted Diluted EPS $1.2
Slide 11: 2010 Earnings Outlook
2010 EARNINGS OUTLOOK 2010 Adjusted Diluted EPS Outlook Range $1.35 $1.25 – $1.30 $1.25 – $1.30 $1.30 $1.25 $1.22 $1.21 $1.20 $1.15 2008A 2009A 2010E 3 Investor and Analyst Meeting, February 16, 2010
Slide 12: Our Accomplishments for 2009
OUR ACCOMPLISHMENTS FOR 2009 Doing what we said we would do > Continued to modernize our regulated infrastructure and obtain recovery of those costs > NC, SC, OH and KY rate case orders > Progress on Cliffside and Edwardsport major construction projects > Smart Grid approval in Ohio > Continued to m
Slide 13: Strategic Focus – 2010 and Beyond
STRATEGIC FOCUS – 2010 AND BEYOND Modernization, Portfolio Diversification and Financial Strength Regulated Operations Commercial Businesses > Build new generation > Effectively compete in Ohio; accelerate > Maintain operational excellence DERS activity > Build a smart grid > Grow renewables; underp
Slide 14: Goals for Today
GOALS FOR TODAY Drill down into the business > Generation and grid modernization strategies > Outlook for future ratemaking activity > Preparations for an uncertain future, especially for new environmental regulations > Strategic positioning of our commercial businesses > Long-term growth and financ
Slide 15: Investor and Analyst Meeting, February 16, 2010
Investor and Analyst Meeting, February 16, 2010 7
Slide 16: U.S. Franchised Electric and Gas
U.S. FRANCHISED ELECTRIC AND GAS Jim Turner Group Executive; President and Chief Operating Officer, U.S. Franchised Electric and Gas
Slide 17: Franchised Electric and Gas Value Proposition
FRANCHISED ELECTRIC AND GAS VALUE PROPOSITION Fleet and grid • Successful deployment of capital to modernize the generation fleet and power delivery system modernization Constructive • Timely and constructive rate recovery of capital regulatory outcomes investments and operating expenses Operational
Slide 18: Fleet Modernization
FLEET MODERNIZATION Carolinas Modernization Indiana Modernization Capacity (through 2020) Capacity (through 2020) (MW) (MW) 2,500 1,200 Renewables 1,000 Remaining 2,000 Unscrubbed Units to be Buck and 800 Evaluated for Other Planned 1,500 Dan River Renewables Retirement/ Retirements Gas Plants Contr
Slide 19: Status of Modernization Projects
STATUS OF MODERNIZATION PROJECTS $2,500 $2,000 2 $1,050 $1,200 $1,500 $ - Million1 Estimated expenditures to complete project $1,000 Spent as of 12/31/2009 $1,300 $1,200 4 $500 3 $910 $440 $600 $220 $110 $0 $90 Edwardsport Cliffside Buck CC Dan River CC SmartGrid 1 Project costs include direct capit
Slide 20: Constructive Regulatory Outcomes
CONSTRUCTIVE REGULATORY OUTCOMES Key Regulatory Accomplishments – 2009 > Favorable rate case outcomes will increase base rates by nearly $460 million upon full implementation Regulatory Research Associates > CWIP recovery enabled/updated for Cliffside and State Regulatory Evaluations Edwardsport pro
Slide 21: Projected Rate Base Growth
PROJECTED RATE BASE GROWTH Projected Rate Base – Franchised Electric and Gas ($ in billions) $28.9 $26.7 2.8 $23.3 2.6 $20.9 2.3 7.1 Projected Rate Base = 2.1 7.0 Prior Period Rate Base 6.5 5.6 Add: Capital Expenditures Less: Depreciation & Amortization 16.3 18.2 12.5 13.8 Less: Deferred Income Taxe
Slide 22: Focus on Regulatory Returns
FOCUS ON REGULATORY RETURNS Projected Earned vs. Allowed Return on Equity ROE% (2010) 12% 10.7%(1) 10.5% 10.63%(2) Current 10.375%(3) Allowed ROE 9% 9.5 – 10.0% 9.0 – 9.5% 8.5 – 9.0% 6% 6.5 – 7.0% Projected Earned ROE 3% Range 0% Carolinas Indiana Ohio T&D Kentucky Key Levers to Address Regulatory L
Slide 23: Frequent Rate Case Activity to Recover Costs
FREQUENT RATE CASE ACTIVITY TO RECOVER COSTS 2010 2011 2012 2013-2014 North Carolina South Carolina Indiana or Under Consideration Ohio Generation, T&D, Gas T&D Kentucky Gas Electric Electric Indicates rate case has concluded and new rates have been implemented Indicates year of projected re
Slide 24: Regulatory and Legislative Focus (2010–2011)
REGULATORY AND LEGISLATIVE FOCUS (2010–2011) North Carolina and South Carolina > Expect to file general rate cases in 2011; rates effective 2012 > Advance legislative initiatives to address regulatory lag > CWIP outside of a rate case for new nuclear Indiana > Review need for filing general rate cas
Slide 25: Operational Excellence Enables Constructive Outcomes
OPERATIONAL EXCELLENCE ENABLES CONSTRUCTIVE OUTCOMES ¢/kWh Retail Average Rates for 12 Months Ending June 30, 2009 12.00 10.00 8.00 6.00 4.00 2.00 0.00 Duke Energy Duke Energy Duke Energy Indiana Duke Energy Kentucky Duke Energy Ohio U. S. Average South Carolina North Carolina % outage highly Custom
Slide 26: Sharp Focus on Cost Control
SHARP FOCUS ON COST CONTROL Franchised Electric and Gas $ - Billion Annual O&M Costs1 $2.4 $2.34B $2.34B $2.33B $2.3 Significant O&M cost reductions achieved during 2009 Efforts ongoing to deliver sustainable $2.2 O&M reductions in 2010 and beyond Operational excellence and system reliability
Slide 27: Growth and Diversification
GROWTH AND DIVERSIFICATION Energy Efficiency Wholesale Origination Economic Development 1. Save-a-watt model places 1. Our competitive rates 1. Site Selection magazine has investments in energy efficiency on and reliable service named Duke Energy a "Top more level footing with investments create an
Slide 28: Delivering Superior Value
DELIVERING SUPERIOR VALUE > Establish a strong earnings platform through the modernization of our fleet and grid and the deployment of innovative products and services that expand the boundaries of our regulated business > Achieve sustainable cost reductions while Key Objective maintaining operation
Slide 29: Appendix
APPENDIX Investor and Analyst Meeting, February 16, 2010
Slide 30: U.S. Franchised Electric and Gas At-a-glance
U.S. FRANCHISED ELECTRIC AND GAS At-a-glance > 5 states: North Carolina, South Carolina, Indiana, Ohio and Kentucky > 50,000 square miles of service area > Approximately 27,000 MW of regulated generating capacity > 4 million retail electric customers > 500,000 retail gas customers 15 Investor and An
Slide 31: U.S. Franchised Electric and Gas Diversity
U.S. FRANCHISED ELECTRIC AND GAS Diversity in geography, customer mix, and fuel mix GEOGRAPHIC DIVERSITY 1 CUSTOMER DIVERSITY 1 FUEL DIVERSITY 1 58% Carolinas 33% Residential 59% Coal 42% Midwest 33% Commercial 39% Nuclear 22% Industrial (excl. Textiles) 2% Hydro 2% Textiles 0% Natural Gas / Oil 10%
Slide 32: Carolinas' Rate Cases
CAROLINAS’ RATE CASES Shaping constructive outcomes in difficult economic times North Carolina Order South Carolina Order • $315 million increase in base rates (65% of request) • $74 million increase in base rates (58% of request) • Riders reduce impact to customers in first 2 years • Riders reduce
Slide 33: Rate Base and Regulatory Mechanisms
RATE BASE AND REGULATORY MECHANISMS Effective Use of Riders Reduces Volatility in Regulated Earnings Ohio Kentucky North South Carolina Carolina Indiana Electric Gas Electric Gas Current $13.7B(6) $5.3B $1B $700M $600M (1) $200M (2) Rate Base N/A N/A Current 10.63% 10.7% 11.0%(3) 10.50% per per 10.3
Slide 34: State Regulatory Jurisdictions
STATE REGULATORY JURISDICTIONS Commission Overviews North South Indiana Ohio Kentucky Carolina Carolina Number 7 commissioners 7 commissioners 5 commissioners 5 commissioners 3 commissioners Term 8 year terms 4 year terms 4 year terms 5 year terms 4 year terms Appointed/ Appointed by Elected by the
Slide 35: Investor and Analyst Meeting, February 16, 2010
Investor and Analyst Meeting, February 16, 2010 20
Slide 36: Regulated Generation
REGULATED GENERATION Dhiaa M. Jamil Group Executive, Chief Generation Officer and Chief Nuclear Officer Belews Creek – “Most Efficient Coal Plant in America” (2008)
Slide 37: Regulated Generation Value Proposition
REGULATED GENERATION VALUE PROPOSITION Fleet operational Maximize operational performance of the regulated generation fleet, resulting in lower costs to customers excellence Environmental Position regulated generation fleet for compliance with compliance pending environmental regulations New nuclear
Slide 38: Maximizing Diversity of Regulated Generation
MAXIMIZING DIVERSITY OF REGULATED GENERATION Installed Capacity MW Coal Nuclear Gas/Oil Hydro NC/SC 19,204 40% 27% 16% 17% IN OH IN/KY 7,773 70% 0% 29% 1% Total 26,977 49% 19% 20% 12% Actual 2009 Generation Coal Nuclear Gas/Oil Hydro NC/SC 44% 54% 0% 2% KY IN/KY 98% 0% 1% 1% Total 59% 39% 0% 2% NC S
Slide 39: Fleet Operational Excellence – Reliability
FLEET OPERATIONAL EXCELLENCE – RELIABILITY Nuclear Generation Capacity Factor Fossil Generation Commercial Availability 100% 100% 95% 90% 90% 80% 85% 70% 2006A 2007A 2008A 2009A 2010E* 2006A 2007A 2008A 2009A 2010E* Duke Energy Industry Averages Duke Energy > 2009 capacity factor second best in flee
Slide 40: Fleet Operational Excellence – Operating Costs
FLEET OPERATIONAL EXCELLENCE – OPERATING COSTS Nuclear Total Operating Cost – $/MWh Total Fossil Production Costs – $/MWh $30 $50 $25 $40 $20 $30 $15 $20 $10 $10 (1) 2006A 2007A 2008A 2009A 2010E* 2006A 2007A 2008A 2009A 2010E* Duke Energy Industry Averages Duke Energy Industry Averages > Low operat
Slide 41: Duke Energy's Aging Generation Fleet
DUKE ENERGY’S AGING GENERATION FLEET (MW) In-Service Dates of Duke’s Regulated Generation Fleet 8,000 7,000 6,000 Fleet modernization will result in 5,000 the retirement of all coal plants put 4,000 into service in the 1940s and earlier, and more than 30% of the 3,000 plants put into service in the
Slide 42: Reducing Emissions Intensity
REDUCING EMISSIONS INTENSITY SO2 Emissions Intensity NOx Emissions Intensity 12 2.5 10 2.0 8 1.5 6 1.0 4 2 0.5 0 0.0 2006 2007 2008 2009 2006 2007 2008 2009 Pounds per net MWh Pounds per net MWh > Approximately 75% of our current coal fleet has scrubbers and/or SCRs installed > After completion of f
Slide 43: Well-Positioned for Pending Environmental Regulations
WELL-POSITIONED FOR PENDING ENVIRONMENTAL REGULATIONS Pending Regulations Coal Regulation > Coal Combustion Byproducts (CCB) Coal Ash – designation forthcoming by EPA, final regulation expected Q1 2011 Air Pollutant Regulation by EPA > Clean Air Transport Rule (CATR) – final rule expected in mid-201
Slide 44: Maintaining New Nuclear Options
MAINTAINING NEW NUCLEAR OPTIONS Cherokee County, SC – Lee Nuclear > Two Westinghouse AP 1000 reactors Piketon, OH > 2,234 megawatts – two 1,117 megawatt units > Filed COL with NRC in 2007 – under review > Estimated commercial operation date of 2021 Piketon, OH > Formed development alliance > Evaluat
Slide 45: Southeast Nuclear Development
SOUTHEAST NUCLEAR DEVELOPMENT Key Considerations and Milestones Federal License Approval > Submitted license application in 2007; addressing requests for additional information Supportive State Regulatory Frameworks > Pre-approval of construction costs and schedule > Cash return on recovery of const
Slide 46: Duke Energy's Generation Strategy
DUKE ENERGY’S GENERATION STRATEGY Generation Environmental Nuclear > Duke’s regulated generation > ~75% of the coal fleet already > In anticipation of a low-carbon fleet has diversity in geography has environmental controls and future, we continue to keep the and fuel sources plans are in place to i
Slide 47: Investor and Analyst Meeting, February 16, 2010
Investor and Analyst Meeting, February 16, 2010 12
Slide 48: Commercial Businesses
COMMERCIAL BUSINESSES Keith Trent Group Executive and President, Commercial Businesses
Slide 49: Commercial Businesses Value Proposition
COMMERCIAL BUSINESSES VALUE PROPOSITION Diversified Sources of Earnings Growth and Cash Midwest Generation Ohio generation (~4,000 MW) Midwest gas-fired generation (~3,600 MW) ►A tale of three businesses > Midwest Generation - mature Wind – 735 MW Renewables business with strong historical cash Wind
Slide 50: Midwest Generation: Asset Profile
MIDWEST GENERATION Asset Profile Gwh Coal- and Gas-Fired Generation ►Midwest primarily coal-fired generation 30,000 (~4,000 MW) 25,000 > Primarily low-cost base load coal plants 3,050 6,150 > Serves native-load customers in Ohio (via ESP) 20,000 and wholesale markets 2,100 > All plants have SCR and
Slide 51: Midwest Generation: Navigating Ohio's Competitive Environment
MIDWEST GENERATION NAVIGATING OHIO’S COMPETITIVE ENVIRONMENT CIN Hub Cal 10 ATC Power Prices ► A competitive market in Ohio since deregulation $65 ESP development period in 2000 $60 Over 30% >Dramatic drop in demand and power prices $55 reduction occurred in early 2009 $50 $/MWhr >Current market pri
Slide 52: Midwest Generation: Our Competitive Response
MIDWEST GENERATION Our Competitive Response ►DERS Strategy > Attract customers within the DE Ohio service territory (“defensive”) > Attract customers outside the DE Ohio service territory (“offensive”) ►DERS has acquired approximately 60 percent 2009 Monthly Ohio Retail Load Switching Trend of DE Oh
Slide 53: Midwest Generation: What to Expect in 2010
MIDWEST GENERATION What to Expect in 2010 ►2010 earnings challenges > Increased customer switching in Ohio > Customer switching in 2010 expected to average approximately 45%; an incremental 5% over December 2009 levels > Estimated incremental EPS impact of $0.04 to $0.07 in 2010 vs. 2009 > Fewer opp
Slide 54: Midwest Generation: Looking Beyond 2011
MIDWEST GENERATION Looking Beyond 2011 ►Entering another ESP is a likely option post-2011 > ESP price will be market-based > Will also include additional ESP features embedded in SB 221 ►Under any framework, we have multiple options for our generation to maximize margin > Dedicate to DE Ohio load in
Slide 55: Renewables: Growth Opportunities
RENEWABLES Growth Opportunities ►Public policy drives growth prospects ►Natural extension of our business > Energy infrastructure provider > Proven construction management North Allegheny > Operational excellence ►Attractive financial performance Top of the World Campbell Hill > ITC and MACRS return
Slide 56: Renewables: Proven Track Record in Wind
RENEWABLES Proven Track Record of Attractive Growth in Wind ►Proven execution in the wind business since 2007 > Over $1 billion invested to date > 2009 wind projects will generate approximately $300 million in cash from operations and tax benefits, principally ITC and bonus depreciation > Principall
Slide 57: Duke Energy International: Clean and Contracted Energy
DUKE ENERGY INTERNATIONAL Focused on Clean and Contracted Energy Brazil – Contractible Capacity Under Firm Contract ►Clean, self-funding electric generation 98% 94% 95% business principally focused on Brazil and 83% 78% Peru > Principally hydro generation > Annual free cash flow ~ $200 – 300 million
Slide 58: Duke Energy International: Sustained Earnings Growth
DUKE ENERGY INTERNATIONAL Sustained Earnings Growth ►DEI has produced long term EBIT ($ in millions) growth > Mature regulatory regimes in Brazil Duke Energy International Adjusted Segment EBIT and Peru 600 485 > Brazil and Peru are stable/growing 500 388 411 409 400 313 economies with strong electr
Slide 59: Key Take-Aways
KEY TAKE-AWAYS ►Commercial businesses - diverse earnings and growth opportunities, strong cash flows and solid returns ►Midwest Generation ►Managing through the current economic environment ►Maintaining options to maximize margin beyond 2012 ►Renewables ►Growth opportunities driven by public policy
Slide 60: Appendix
APPENDIX Investor and Analyst Meeting, February 16, 2010
Slide 61: Non-Regulated Midwest Generation
NON-REGULATED MIDWEST GENERATION Midwest Primarily Coal Midwest Gas Fired Beckjord (MISO) 1,074 MW Hanging Rock (PJM) 1,240 MW Type: 6 Coal Units, 4 CT Units Type: 2 Combined Cycle Units Fuel: Coal, Oil Fuel: Natural Gas Ownership: Unit 6 37.5%; 100% Ownership: 100% Location: New Richmond, OH Locati
Slide 62: Non-Regulated Renewables Portfolio
NON-REGULATED RENEWABLES PORTFOLIO Wind In Service Wind In Service (Cont.) Sweetwater 1-5 283 MW Silver Sage 42 MW Type: 175 GE 1.5 MW, 135 Mitsubishi 1 MW, & Type: 20 Suzlon 2.1 MW turbines North Allegheny 81 Siemens 2.3 MW Ownership: 100% Ownership: 1-3 50%; 4-5 47% PPA: 20 yr Platte River Auth,Ch
Slide 63: Duke Energy International
DUKE ENERGY INTERNATIONAL Houston MEXICO BELIZE GUATEMALA 2009 Net Capacity HONDURAS Guatemala NICARAGUA San Salvador COSTA RICA PANAMA 6% VENEZUELA Guatemala 283 MW GUYANA FRENCH SURINAME COLOMBIA GUYANA 22% El Salvador 296 MW ECUADOR PERU Ecuador 160 MW 72% BRAZIL Peru – Egenor 501 MW Lima BOLIVIA
Slide 64: International – National Methanol and FX
INTERNATIONAL – NATIONAL METHANOL (NMC) AND FX ► National Methanol (NMC) Partnership Structure: SABIC (50%), Celanese (25%) and Duke Energy (25%) Duke Energy interest acquired thru acquisition of PanEnergy (Texas Eastern an original investor) Joint Venture agreement signed in 1981, license to
Slide 65: Investor and Analyst Meeting, February 16, 2010
Investor and Analyst Meeting, February 16, 2010 18
Slide 66: Financial Overview
FINANCIAL OVERVIEW Lynn Good Group Executive and Chief Financial Officer
Slide 67: 2009 Financial Highlights
2009 FINANCIAL HIGHLIGHTS 2009 Actual vs. Plan Adjusted Diluted EPS ($ millions) 2009 Plan 2009 Actual $1.22 USFE&G Adjusted Segment EBIT $ 2,400 $ 2,321 $1.21 Commercial Power Adjusted Segment EBIT 470 500 $0.28 International Adjusted Segment EBIT 370 409 $0.27 Other Adjusted Net Expense (250) (200
Slide 68: USFE&G 2009 Volume Trends
USFE&G 2009 VOLUME TRENDS Residential Commercial 2.6% 1.7% 1.6% 1.3% -0.4% 0.6% -0.9% -0.8% -1.0% -1.1% 1Q09 2Q09 3Q09 4Q09 2009 1Q09 2Q09 3Q09 4Q09 2009 Industrial USFE&G Total -4.5% -1.5% -12.3% -3.3% -4.1% -14.3% -5.3% -6.2% -20.3% -19.4% 1Q09 2Q09 3Q09 4Q09 2009 1Q09 2Q09 3Q09 4Q09 2009 Volume t
Slide 69: Key Assumptions for 2010
KEY ASSUMPTIONS FOR 2010 ►Reflects impact of 2009 rate cases in NC, SC, OH and KY ►Weather-normalized 2010 load forecast relatively flat to 2009 • Residential and Commercial load flat to 2009 • Continued textile decline in Carolinas • Slight improvement in non-textile industrial sales in both Caroli
Slide 70: 2010 Outlook – Adjusted Segment EBIT
2010 OUTLOOK – ADJUSTED SEGMENT EBIT 2010 Adjusted Segment EBIT Expectations ($ millions) 2009 2010E * U.S. Franchised Electric & Gas $2,321 $2,630 Commercial Power 500 315 International 409 485 Total Adjusted Segment EBIT $3,230 $3,430 Other (Net Expense) (200) (255) Total Adjusted Segment EBIT and
Slide 71: Long-Term Growth Expectations of 4-6%
LONG-TERM GROWTH EXPECTATIONS OF 4-6%* Lower Load Growth > $1.25 - $1.30* adjusted EPS range for 2010 136,000 > Represents 4-5% increase from 2009 134,000 > Economic downturn and the extent and timing 132,000 of economic recovery have impacted our 130,000 GWh growth expectations 128,000 126,000 > Lo
Slide 72: 2010 Summary Cash Flows
2010 SUMMARY CASH FLOWS ($ in Millions) 2010E Primary Sources: 2010E Segment CapEx Adjusted Net Income (1) $ 1,700 Depreciation & Amortization 1,800 Deferred and Accrued Taxes 600 Total Sources 4,100 Primary Uses: Capital Expenditures (5,200) Dividends (1,300) Total Uses (6,500) Other Sources/(Uses)
Slide 73: Capital Expenditure Profile
CAPITAL EXPENDITURE PROFILE ($ in millions) 2010E 2011E 2012E Cumulative Committed Capital Edwardsport IGCC $ 910 $ 280 $ 80 $ 1,270 CC / CT Additions – Carolinas 420 380 170 970 Nuclear Fuel 240 390 310 940 Cliffside 440 240 80 760 Smart Grid (1) 130 310 290 730 Renewables 430 - - 430 Environmental
Slide 74: Continued Dividend Growth
CONTINUED DIVIDEND GROWTH > Dividend expected to grow at a slower rate than growth in adjusted-diluted EPS > Dividend payout ratio to trend downward (based on adjusted-diluted EPS) > 2% increase assumed for 2010 > $1.3 billion of expected dividend payments in 2010 Indicative Annual Dividend Rate as
Slide 75: Expected 2010 Debt Issuances
EXPECTED 2010 DEBT ISSUANCES ($ in millions) DE DE DE DE Duke Carolinas Ohio Indiana Kentucky DEGS DEI Energy Total Estimated Debt $600 $ - $510 $ - $315 $315 $535 $2,275 Issuances (1) (2) Scheduled Debt (505) (5) (5) (5) (30) (225) - (775) Maturities Potential Debt - - (125) - - (225) (275) (625) R
Slide 76: Balance Sheet Strength
BALANCE SHEET STRENGTH > Committed to current credit ratings > Ratings have stable or positive outlooks > Plan maintains strong credit metrics in line with current ratings > Strong liquidity and access to capital support our business plan > Available liquidity of approximately $2.8 billion at year-e
Slide 77: Summary – Financial Objectives
SUMMARY – FINANCIAL OBJECTIVES Allocate Capital Efficiently Grow Earnings and Maintain a Strong and Earn Competitive Dividends Balance Sheet Returns > Adjusted diluted EPS CAGR > Deploy capital consistent with > Management is committed to of 4-6% off a 2009 base is our business mix (maintain maintai
Slide 78: Appendix
APPENDIX Investor and Analyst Meeting, February 16, 2010
Slide 79: 2009 Highlights – U.S. Franchised Electric & Gas
2009 HIGHLIGHTS – U.S. FRANCHISED ELECTRIC & GAS Reported & Adjusted Segment EBIT ($ millions) 4Q09 4Q08 2009 2008 Reported Segment EBIT $548 $ 532 $2,321 $ 2,398 Adjustments - - - - Adjusted Segment EBIT $548 $ 532 $2,321 $2,398 FOR THE QUARTER FOR THE YEAR Adjusted segment EBIT increased primarily
Slide 80: Industrial Volume Quarterly Trends
INDUSTRIAL VOLUME QUARTERLY TRENDS Q1 Q2 Q3 Q4 (Billed GwH) Primary Metals (Billed GwH) Textiles 1,500 1,500 1,000 1,000 500 500 0 0 2007 2008 2009 2007 2008 2009 (Billed GwH) 1,250 Chemicals (Billed GwH) Total Industrial 1,000 12,000 750 9,000 500 6,000 250 3,000 0 0 2007 2008 2009 2007 2008 2009 N
Slide 81: 2009 Financial Highlights – Commercial Power
2009 FINANCIAL HIGHLIGHTS – COMMERCIAL POWER Reported & Adjusted Segment EBIT ($ millions) 4Q09 4Q08 2009 2008 Reported Segment EBIT $68 ($ 9) $27 $ 264 Adjustments 32 110 473 157 Adjusted Segment EBIT $100 $ 101 $500 $ 421 FOR THE QUARTER FOR THE YEAR Adjusted segment EBIT was relatively flat prima
Slide 82: 2009 Financial Highlights – DEI
2009 FINANCIAL HIGHLIGHTS – DEI Reported & Adjusted Segment EBIT ($ millions) 4Q09 4Q08 2009 2008 Reported Segment EBIT $104 $ 104 $365 $ 411 Adjustments 18 - 44 - Adjusted Segment EBIT $122 $ 104 $409 $ 411 FOR THE QUARTER FOR THE YEAR Adjusted segment EBIT increased primarily Adjusted segment EBIT
Slide 83: 2009 Financial Highlights – Other
2009 FINANCIAL HIGHLIGHTS – OTHER Reported & Adjusted Net Expense ($ millions) 4Q09 4Q08 2009 2008 Reported Net Expense $58 $ 108 $251 $ 568 Adjustments (2) (10) (51) (258) Adjusted Net Expense $ 56 $ 98 $ 200 $ 310 FOR THE QUARTER FOR THE YEAR Adjusted net expense decreased due to Adjusted net expe
Slide 84: Other Financial Items - 2009
OTHER FINANCIAL ITEMS - 2009 • Interest expense, net of debt AFUDC and capitalized interest, for 2009 was $751 million • Debt AFUDC and capitalized interest for 2009 was $102 million • Equity AFUDC for 2009 was $153 million • Interest income and other was $120 million during 2009 • Effective tax rat
Slide 85: Capital Expenditures – USFE&G
CAPITAL EXPENDITURES – USFE&G ($ in millions) 2010E 2011E 2012E Cumulative US Franchised Electric & Gas System Growth $ 2,250 $ 1,630 $ 1,120 $ 5,000 Maintenance and Other 1,570 1,720 1,670 4,960 Nuclear Fuel 240 390 310 940 Environmental 90 10 50 150 Total US Franchised Electric & Gas $ 4,150 $ 3,7
Slide 86: Capex – System Growth and Maintenance (by Utility)
CAPEX – SYSTEM GROWTH AND MAINTENANCE (BY UTILITY) ($ in millions) 2010E 2011E 2012E Cumulative System Growth Carolinas $ 1,120 $ 940 $ 630 $ 2,690 Indiana 960 450 280 1,690 Ohio 150 220 200 570 Kentucky 20 20 10 50 Total System Growth $ 2,250 $ 1,630 $ 1,120 $ 5,000 Maintenance and Other Carolinas
Slide 87: Simplified Financing Structure (Dec. 31, 2009)
SIMPLIFIED FINANCING STRUCTURE (DEC. 31, 2009) Duke Energy Corporation Revolver Sublimit: $1.097 B LTD Outstanding: $2.6 B Total Consolidated LTD: $17.0 B Duke Energy Carolinas DE International Revolver Sublimit: $840 M Cinergy Corp. LTD Outstanding: $0.9 B LTD Outstanding: $7.7 B Duke Energy Ohio D
Slide 88: Liquidity Summary
LIQUIDITY SUMMARY As of December 31, 2009 ($ in millions) Duke DE DE DE Energy Carolinas Ohio DE Indiana Kentucky Total Facility Size (1) $ 1,097 $ 840 $ 650 $ 450 $ 100 $ 3,137 Less: Notes Payable and Commercial Paper (2) - (300) - (150) - (450) Drawdown (274) - - (123) - (397) Outstanding Letters
Slide 89: 2009 Financings Completed
2009 FINANCINGS COMPLETED ($ in millions) 2009 Fixed Rate Financings Date Issuer Security Amount January Duke Energy 6.30% Unsecured due 2/2014 $ 750 March DE Ohio 5.45% FMB due 4/2019 450 March DE Indiana 6.45% FMB due 4/2039 450 August Duke Energy 3.95% Unsecured due 9/2014 500 August Duke Energy
Slide 90: Long-Term Debt Maturities (2010 – 2012)
LONG-TERM DEBT MATURITIES (2010 – 2012) (1) ($ in millions) $1,850 $775 $600 (1) Excludes outstanding borrowings under the master credit facility and potential debt refinancings/refundings. 25 Investor and Analyst Meeting, February 16, 2010
Slide 91: Credit Ratings Summary
CREDIT RATINGS SUMMARY Moody's S&P Duke Energy Stable Positive Issuer Rating / Corporate Credit Rating Baa2 A- Senior Unsecured Baa2 BBB+ Commercial Paper P-2 A-2 DE Carolinas Stable Positive Senior Secured A1 A Senior Unsecured A3 A- DE Ohio Positive Positive Senior Secured A2 A Senior Unsecured Ba
Slide 92: Investor and Analyst Meeting, February 16, 2010
Investor and Analyst Meeting, February 16, 2010 27
Slide 93: Q&A and Wrap-Up
Q&A AND WRAP-UP Jim Rogers Chairman, President and Chief Executive Officer
Slide 94: Investor and Analyst Meeting, February 16, 2010
Investor and Analyst Meeting, February 16, 2010 2