Duke Energy Corporation (holding Company) · NYSE:DUK
Duke Energy Corporation (holding Company) — Q3 2004 Earnings Presentation
20 slides from Duke Energy Corporation (holding Company)'s earnings presentation, Nov 3, 2004
Slide 1: Third Quarter 2004 Earnings Review
Third Quarter 2004 Earnings Review November 3, 2004 Paul Anderson Chairman and Chief Executive Officer David Hauser Group Vice President and Chief Financial Officer
Slide 2: Safe Harbor Statement
Safe Harbor Statement Under the Private Securities Litigation Act of 1995 This document contains forward looking information which is subject to risks and uncertainties, including, but not limited to, changes in the utility regulatory environment, the impact of competition from other energy supplier
Slide 3: Highlights
Highlights 3Q04 3Q03 Reported EPS $ 0.41 $ 0.05 Special Items (0.03) 0.30 EPS excluding special items $ 0.38 $ 0.35 ■ Regulated businesses continue to deliver solid earnings and strong cash flow ■ Field Services benefited from strong NGL prices ■ DENA realized positive Segment EBIT impact of $40 mil
Slide 4: Franchised Electric
Franchised Electric Segment EBIT ■ Third Quarter 2004 ($ millions) ● Higher non-nuclear O&M primarily related to inventory write-down and Quarter 3Q04 3Q03 storm costs, and lower bulk power sales Reported Segment EBIT $ 453 $ 436 ● Partially offset by higher sales related Special items -- 75 to cust
Slide 5: Natural Gas Transmission
Natural Gas Transmission ■ Third Quarter 2004 Segment EBIT ($ millions) ● Increased earnings from expansion projects, primarily at Patriot and Quarter 3Q04 3Q03 HubLine pipelines Reported ● Foreign currency translation related Segment EBIT $ 265 $ 280 to the Canadian dollar benefited results Special
Slide 6: Field Services
Field Services Segment EBIT from continuing operations ■ Third Quarter 2004 ($ millions) ● Favorable results were primarily due to continuing strong NGL prices Quarter 3Q04 3Q03 Reported ● Partially offset by a $26 million Segment EBIT $ 67 $ 51 impairment charge, net of minority Special items 25 --
Slide 7: Duke Energy North America
Duke Energy North America ■ Third Quarter 2004 Segment EBIT from continuing operations ($ millions) ● Lower margins from energy generation due to lower spark spreads Quarter 3Q04 3Q03 ● Results for the quarter were positively Reported Segment EBIT $ (17) $ (411) affected by $40 million* due to commo
Slide 8: Segment EBIT Analysis
Duke Energy North America Segment EBIT Analysis ($ in millions) 3Q04 Actual Total Gross Margin from Accrual Portfolio $ 83 Expenses: O&M $ (61) Depreciation (39) General and administrative (35) Minority interest expense (6) Other income 7 Total Expenses $ (134) Ongoing EBIT from continuing operation
Slide 9: International Energy
International Energy ■ Third Quarter 2004 ● Higher earnings from Brazilian Segment EBIT from continuing operations ($ millions) operations, primarily related to the reduction of environmental reserves Quarter 3Q04 3Q03 ● Higher earnings from National Methanol Reported driven by higher MTBE prices Se
Slide 10: Crescent Resources
Crescent Resources ■ Third Quarter 2004 Segment EBIT from continuing operations ($ millions) ● Higher earnings from commercial and residential Quarter 3Q04 3Q03 sales were mostly offset by Reported lower land sales Segment EBIT $ 43 $ 39 ■ Expect full year 2004 segment Year-to-date 2004 2003 EBIT fr
Slide 11: Progress Made on Debt Reduction Plan
Progress Made on Debt Reduction Plan ■ Debt reduction has reached approximately $2.4 billion as of Sept 30 ● $890 million in Australian debt (1) ● $350 million of Duke Energy trust preferred securities ● $250 million of Duke Energy trust preferred securities ● $250 million of Duke Capital trust pref
Slide 12: Corporate Items
Corporate Items ■ $2.9 billion of cash and cash equivalents on hand at Sept 30 ■ Reduced income tax expense of $48 million on sale of Southeast generation assets resulting from DEA restructuring ■ Tax loss carryforwards of more than $500 million into 2005 ■ Fourth quarter ● Voluntary cash contributi
Slide 13: Progress Toward Year-end Goals
Progress Toward Year-end Goals ■ Positioned to meet or exceed all 2004 financial goals ● Franchised Electric, Gas Transmission, Field Services, Crescent and International Energy are performing well and delivering solid results and strong cash flows ● Continued progress at DENA toward reducing losses
Slide 14: Slide 14
Slide 15: Nine Months Ended September 30, 2004 Ongoing Earnings per Share
Duke Energy Corporation Nine Months Ended September 30, 2004 Ongoing Earnings per Share (amounts in millions, except EPS) Pre-tax Amount Tax Effect EPS Impact Special Items: First Quarter 2004 - Gain on sale of Australian assets $256 ($18) $0.26 - Net loss on sale of DENA assets, primarily anticipat
Slide 16: Quarters ended September 30, 2004 and 2003 Ongoing Earnings per Share
Duke Energy Corporation Quarters ended September 30, 2004 and 2003 Ongoing Earnings per Share (amounts in millions, except EPS) Pre-tax Amount Tax Effect 2004 EPS Impact 2003 EPS Impact Special Items Third Quarter 2004 - Tax benefit from restructuring $0 $48 $0.05 - Asset impairments, losses on asse
Slide 17: Reported to Ongoing Segment EBIT Reconciliation, September 2004
DUKE ENERGY REPORTED TO ONGOING SEGMENT EBIT RECONCILIATION September 2004 Quarter and Year-to-date (Dollars in Millions) Special Items California and Gain Ongoing Loss on Gain on Sale Western US Reported (Loss) Enron Segment Sale of SE Impairment of Equity Energy Total Segment on Sale Settlement EB
Slide 18: Reported to Ongoing Segment EBIT Reconciliation, Sept 2003
DUKE ENERGY REPORTED TO ONGOING SEGMENT EBIT RECONCILIATION Sept 2003 Quarter and Year-to-date (Dollars in Millions) Special Items Settlement Severance and Settlement with with the Ongoing Gain (Loss) DENA related costs Reported the S.C. Public Commodity Segment on Sale goodwill associated with Tota
Slide 19: Debt reduction reconciliation - Nine months ending September 30, 2004
Duke Energy Corporation Debt reduction reconciliation - Nine months ending September 30, 2004 (in millions) Issuances of long-term debt, per condensed cash flow statement $ 166 Payments for the redemption of long-term debt, preferred stock of subsidiary and net paydown of commercial paper and notes
Slide 20: Non-GAAP Reconciliation Schedules
Duke Energy Corporation Non-GAAP Reconciliation Schedules Third Quarter 2004 Earnings Release 2004 DENA Segment EBIT Loss from Continuing Operations The Company’s prepared remarks related to the Third Quarter 2004 Earnings Review include a discussion of DENA’s adjusted 2004 segment EBIT loss from co