Duke Energy Corporation (holding Company) · NYSE:DUK
Duke Energy Corporation (holding Company) — Q1 2022 Earnings Presentation
37 slides from Duke Energy Corporation (holding Company)'s earnings presentation, May 9, 2022
Slide 1: Q1 2022 Earnings Review and Business Update
Q1 / 2022 Earnings Review and Business Update Lynn Good / Chair, President and CEO Steve Young / Executive Vice President and CFO May 9, 2022 // 1
Slide 2: Safe Harbor statement and Regulation G disclosure
Safe Harbor statement This presentation includes forward-looking statements within the meaning of the federal securities laws. Actual results could differ materially from such forward- looking statements. The factors that could cause actual results to differ are discussed herein and in Duke Energy’s
Slide 3: 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 and can often be identified by
Slide 4: Financial highlights
Financial highlights $1.08 / $1.30 Q1 2022 REPORTED / ADJUSTED EPS CONTINUED LOAD GROWTH PARTIALLY OFFSET BY WINTER STORMS $5.30 - $5.60 REAFFIRMING 2022 ADJUSTED EPS GUIDANCE RANGE 5% – 7% REAFFIRMING GROWTH RATE THROUGH 2026 OFF MIDPOINT OF ORIGINAL 2021 GUIDANCE RANGE ($5.15)(1) (1) Based on adju
Slide 5: ESG report highlights
ESG report highlights GOALS AND RECENT COMMITMENTS ACCOMPLISHMENTS ✓ Exceeded 44% carbon reduction from 2005 in 2021 Carbon ENVIRONMENTAL Reduction ✓ Decarbonizing natural gas business, focusing on methane detection and reduction of emissions using technology ▪ At least 50% carbon reduction and net-
Slide 6: North Carolina clean energy legislation
North Carolina clean energy legislation ENGAGING WITH STAKEHOLDERS TO DEVELOP CLEAN ENERGY TRANSITION ▪ Held three stakeholder meetings on the Carbon Plan ▪ Reviewed preliminary modeling assumptions and resource portfolios to achieve carbon reductions while maintaining affordability and reliability
Slide 7: Regulatory and policy update
Regulatory and policy update South ▪ Potential legislation for storm cost securitization Carolina ▪ Filed updated 10-year storm protection plan (2023-2032) in April; includes $7 billion of capital investment focused on grid hardening Florida ▪ Completed Park & Plug pilot program, installing 627 EV c
Slide 8: Q1 2022 adjusted EPS summary and primary drivers
Q1 2022 adjusted EPS summary and primary drivers SEGMENT RESULTS VS. PRIOR YEAR QUARTER(1) REPORTED EARNINGS PER SHARE Electric Utilities & Infrastructure, +$76 M (+$0.10 per share) $0.47 ▲ Retail and wholesale electric volumes $1.25 ($0.45) $0.45 ▲ Rate cases and pricing $1.08 ▼ Weather (-$0.01) an
Slide 9: Retail electric volumes
Retail electric volumes CONTINUED LOAD GROWTH ACROSS ALL CUSTOMER CLASSES DESPITE MODERATING ECONOMIC EXPANSION IN 2022 ▪ Residential class supported by meaningful customer growth and the continuation of fully remote and hybrid work ▪ Retail and service sectors continue to rebound from 2020 pandemic
Slide 10: Our investor value proposition
Our investor value proposition A STRONG LONG-TERM RETURN PROPOSITION 3.6% ~10% 5 -7% DIVIDEND YIELD(1) ATTRACTIVE zzz LONG-TERM WITH LONG-TERM RISK-ADJUSTED EPS GROWTH(4) DIVIDEND GROWTH TOTAL SHAREHOLDER THROUGH 2026 COMMITMENT(2) RETURN(3) CONSTRUCTIVE JURISDICTIONS, LOWER-RISK REGULATED INVESTMEN
Slide 11: Appendix
APPENDIX // 11
Slide 12: Indiana energy transition
Indiana energy transition TRANSITION TO CLEANER ENERGY WITH FOCUS ON RELIABILITY AND AFFORDABILITY ▪ Submitted 2021 Indiana integrated resource plan (IRP) in December ▪ Preferred portfolio reduces carbon emissions from our Indiana fleet by 63% in 2030 and 88% by 2040, compared to 2005 levels ▪ Key c
Slide 13: Electric utilities & infrastructure recovery mechanisms
Electric utilities & infrastructure recovery mechanisms RECOVERY MECHANISMS FOR ELECTRIC CAPEX(1) ▪ ~90% of electric segment capital investments are eligible for modern recovery mechanisms, mitigating regulatory lag ▪ Includes recovery through riders, rate cases with forecasted test years, and multi
Slide 14: Transforming the way we produce power
Transforming the way we produce power 1% 6% 7% 5% Coal / Oil Generation Natural Gas 22% 25% (MWh) by 33% 35% Nuclear 40% Fuel Type 60% Hydro, Wind 36% 30% & Solar 2005(1) 2021(1)(2) 2030E(3) ~12% 4% Coal as a % Coal / Oil ~6% of Earnings Dual-Fuel(4) Base 2% 8% ~2-3% 4% ~1-2% ~1-2% 2021 2026E 2030E
Slide 15: Coal as a % of earnings base by jurisdiction
Coal as a % of earnings base by jurisdiction(1) Coal / Oil DUKE ENERGY CAROLINAS DUKE ENERGY INDIANA Dual-Fuel(2) 14% 36% 16% 8% 8% 19% 5% 4% 10% 9% 20% 6% 3% 6% 3% 9% 1% 3% 2021 2026E 2030E 2021 2026E 2030E DUKE ENERGY PROGRESS DUKE ENERGY FLORIDA 8% 7% 3% 3% 1% 0% 2021 2026E 2030E 2021 2026E 2030E
Slide 16: Economic development
Economic development OUR COMMUNITIES DEPEND ON ECONOMIC GROWTH, AND WE PLAY AN IMPORTANT ROLE ▪ We work with state and local authorities to promote economic growth in our communities, helping attract investment in jobs ▪ Focused on several key business sectors: Aerospace, data centers, advanced manu
Slide 17: Long-standing history of strong governance driven from diverse Board of Directors
Long-standing history of strong governance driven from diverse Board of Directors FOCUSED ON BOARD COMPOSITION TO OVERSEE THE COMPANY’S LONG-TERM STRATEGY ▪ 13 out of 14 directors are independent (all directors except Chair, President and CEO) ▪ 7 out of 14 directors are female or identify as a part
Slide 18: 2022 Supplemental Financial Information
2022 SUPPLEMENTAL FINANCIAL INFORMATION // 18
Slide 19: 2022 EPS guidance and shaping considerations
2022 EPS guidance and shaping considerations $5.30 - $5.60(1) SHAPING CONSIDERATIONS COMPARED TO 2021 2022 drivers Q2 2nd Half of 2022 Normalizing 2021 weather(2) ▼ ▲ O&M timing ▼ ▲ Rate cases & riders -- ▲ Commercial Renewables ▼ -- 2022 Guidance Range Tax accounting timing ▼ ▼ ON TRACK TO ACHIEVE
Slide 20: Key 2022 adjusted earnings guidance assumptions
Key 2022 adjusted earnings guidance assumptions ($ in millions) Original 2022 2022 YTD Assumptions (1) (thru 3/31/2022) Adjusted segment income/(expense)(2): Electric Utilities & Infrastructure $4,170 $896 Gas Utilities & Infrastructure $470 $254 Commercial Renewables $150 $11 Other ($595) ($170) Du
Slide 21: Electric utilities quarterly weather impacts
Electric utilities quarterly weather impacts Weather segment 2022 2021 income to normal: Pretax Weighted EPS impact Pretax Weighted EPS impact impact avg. shares favorable / impact avg. shares favorable / (unfavorable) (unfavorable) First Quarter ($33) 770 ($0.03) ($17) 769 ($0.02) Second Quarter $7
Slide 22: Key 2022 earnings sensitivities
Key 2022 earnings sensitivities Driver EPS Impact 1% change in earned return on equity +/- $0.53 $1 billion change in rate base +/- $0.07 Electric Utilities & Infrastructure 1% change in Electric Utilities volumes Industrial +/- $0.02 (2) +/- $0.15(1) (2) Commercial +/- $0.05 (2) Residential +/- $0.
Slide 23: Weather normalized volume trends, by electric jurisdiction
Weather normalized volume trends, by electric jurisdiction Duke Energy Duke Energy Duke Energy Duke Energy Duke Energy Electric Carolinas Progress Florida Indiana Ohio/Kentucky Utilities Rolling Twelve Months, as of Mar. 31, 2022 7.6% 6.4% 6.3% 5.8% 5.7% 5.0% 5.4% 4.4% 3.9% 4.1% 3.7% 3.8% 3.5% 3.3%
Slide 24: Financing plan update and current liquidity
FINANCING PLAN UPDATE AND CURRENT LIQUIDITY // 24
Slide 25: 2022 Financing plan
2022 Financing plan(1) (1) Excludes financings at Commercial Renewables and other non-regulated entities (2) Excludes amortization of noncash purchase accounting adjustments and CR3 securitization (3) On March 9, 2022, Duke Energy Corp. executed a $1.4 billion term loan of which $500 million of the
Slide 26: Liquidity summary (as of March 31, 2022)
Liquidity summary (as of March 31, 2022) ($ in millions) Duke Duke Duke Duke Duke Duke Piedmont Duke Energy Energy Energy Energy Energy Energy Natural Energy Carolinas Progress Florida Indiana Ohio Kentucky Gas Total Master Credit Facility (1) $ 3,300 $ 1,225 $ 1,400 $ 900 $ 600 $ 600 $ 175 $ 800 $
Slide 27: Upcoming events & other
UPCOMING EVENTS & OTHER // 27
Slide 28: Upcoming events
Upcoming events Event Date 2Q 2022 earnings call (tentative) August 4, 2022 ESG Day October 4, 2022 3Q 2022 earnings call (tentative) November 4, 2022 // 28 FIRST QUARTER 2022 EARNINGS REVIEW AND BUSINESS UPDATE // 28
Slide 29: Investor relations contact information
Investor relations contact information JACK SULLIVAN, VICE PRESIDENT INVESTOR RELATIONS ▪ Jack.Sullivan@duke-energy.com ▪ (980) 373-3564 CHRIS JACOBI, DIRECTOR INVESTOR RELATIONS ▪ Christopher.Jacobi@duke-energy.com ▪ (704) 382-8397 LINDA MILLER, MANAGER INVESTOR RELATIONS ▪ Linda.Miller@duke-energy
Slide 30: Headline goes here
HEADLINE GOES HERE For additional information on Duke Energy, please visit: duke-energy.com/investors FOURTH QUARTER 2021 EARNINGS REVIEW AND BUSINESS UPDATE // 30
Slide 31: Non-GAAP Reconciliations
Duke Energy Corporation Non-GAAP Reconciliations First Quarter Earnings Review & Business Update May 9, 2022 Adjusted Earnings per Share (EPS) The materials for Duke Energy Corporation’s (Duke Energy) First Quarter Earnings Review and Business Update on May 9, 2022, include a discussion of adjusted
Slide 32: Adjusted Segment Income (Loss) and Adjusted Other Net Loss
Adjusted Segment Income (Loss) and Adjusted Other Net Loss The materials for Duke Energy’s First Quarter Earnings Review and Business Update on May 9, 2022, include a discussion of adjusted segment income (loss) and adjusted other net loss for the quarter ended March 31, 2022 and a discussion of 202
Slide 33: Available Liquidity
Available Liquidity The materials for Duke Energy’s First Quarter Earnings Review and Business Update on May 9, 2022, 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 equivalen
Slide 34: Reported to Adjusted Earnings Reconciliation, Q1 2022
DUKE ENERGY CORPORATION REPORTED TO ADJUSTED EARNINGS RECONCILIATION Three Months Ended March 31, 2022 (Dollars in millions, except per share amounts) Special Item Reported Regulatory Total Adjusted Earnings Matters Adjustments Earnings SEGMENT INCOME Electric Utilities and Infrastructure $ 723 $ 17
Slide 35: Reported to Adjusted Earnings Reconciliation, Q1 2021
DUKE ENERGY CORPORATION REPORTED TO ADJUSTED EARNINGS RECONCILIATION Three Months Ended March 31, 2021 (Dollars in millions, except per share amounts) Special Item Reported Gas Pipeline Total Adjusted Earnings Investments Adjustments Earnings SEGMENT INCOME Electric Utilities and Infrastructure $ 82
Slide 36: Effective Tax Reconciliation
DUKE ENERGY CORPORATION EFFECTIVE TAX RECONCILIATION March 2022 (Dollars in millions) Three Months Ended March 31, 2022 Effective Tax Balance Rate Reported Income Before Income Taxes $ 806 Regulatory Matters 257 Noncontrolling Interests 13 Preferred Dividends (39) Pretax Income Including Noncontroll
Slide 37: Available Liquidity Reconciliation
Duke Energy Corporation Available Liquidity Reconciliation As of March 31, 2022 (In millions) Cash and Cash Equivalents $ 853 Less: Certain Amounts Held in Foreign Jurisdictions (8) Less: Unavailable Domestic Cash (113) 732 Plus: Remaining Availability under Master Credit Facilities and other facili