Duke Energy Corporation (Holding Company) · NYSE:DUK
Duke Energy Corporation (Holding Company) — Q2 2009 Earnings Presentation
27 slides from Duke Energy Corporation (Holding Company)'s earnings presentation, Aug 4, 2009
Slide 1: Second Quarter Earnings Review and Business Update
SECOND QUARTER EARNINGS REVIEW AND BUSINESS UPDATE August 4, 2009 Jim Rogers Lynn Good Chairman, President and Chief Executive Officer Group Executive and Chief Financial Officer
Slide 2: Safe Harbor Statement and Reg G Disclosure
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 3: 2Q 2009 Earnings Summary
2Q 2009 EARNINGS SUMMARY 2Q09 2Q08 Reported Diluted EPS $ 0.21 $ 0.28 Adjustments to Reported: Mark-to-Market Impact of Economic Hedges 0.02 (0.05) Crescent Adjustments 0.01 0.05 Other Adjustments 0.02 - Discontinued Operations - (0.01) Adjusted Diluted EPS $ 0.26 $ 0.27 • Decrease in adjusted dilut
Slide 4: U.S. Franchised Electric & Gas
U.S. FRANCHISED ELECTRIC & GAS Reported & Adjusted Segment EBIT ($ millions) 2Q09 2Q08 Reported Segment EBIT $ 500 $ 503 Adjustments - - Adjusted Segment EBIT $ 500 $ 503 HIGHLIGHTS • Adjusted segment EBIT decreased primarily due to • $45 million due to lower volumes • $13 million due to lower off-s
Slide 5: USFE&G Retail Volumes by Customer Class
USFE&G RETAIL VOLUMES BY CUSTOMER CLASS % Change in Weather Normalized Volumes – 2Q09 vs. 2Q08 Net Margin $ Change in Weather Normalized Volumes – 2Q09 vs. 2Q08 (In millions) 5% $20 0% -5% $0 -10% ($20) -15% ($40) -20% ($60) -25% Carolinas Midwest Total Carolinas Midwest Total Residential Commercial
Slide 6: Industrial Volume Trends (1Q07 – 2Q09)
INDUSTRIAL VOLUME TRENDS (1Q07 – 2Q09) 2007 2008 2009 (Billed GwH) Primary Metals (Billed GwH) Textiles 1,500 1,500 1,000 1,000 500 500 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 (Billed GwH) Chemicals (Billed GwH) Total Industrial 1,500 12,000 9,000 1,000 6,000 500 3,000 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Note: The abov
Slide 7: Commercial Power
COMMERCIAL POWER Reported & Adjusted Segment EBIT ($ millions) 2Q09 2Q08 Reported Segment EBIT $ 79 $ 235 Adjustments 36 (107) Adjusted Segment EBIT $ 115 $ 128 HIGHLIGHTS • Adjusted segment EBIT decreased primarily due to • $19 million in decreased margins for wholesale customers due to lower power
Slide 8: Competitive Ohio Environment
COMPETITIVE OHIO ENVIRONMENT ►Recent Events Affecting Competitive Environment in Ohio Low wholesale power market prices continue Competitive environment in other portions of Ohio is historically different from our service territory Customer switching Increased customer switching experienced by Duke
Slide 9: International Energy
DEI Reported & Adjusted Segment EBIT ($ millions) 2Q09 2Q08 Reported Segment EBIT $ 68 $ 116 Adjustments 26 - Adjusted Segment EBIT $ 94 $ 116 HIGHLIGHTS • Adjusted segment EBIT decreased primarily due to • $18 million reduced contribution from National Methanol due to lower commodity prices • $8 mi
Slide 10: Other
OTHER Reported & Adjusted Net Expense ($ millions) 2Q09 2Q08 Reported Net Expense $ 38 $ 189 Adjustments (1) (112) Adjusted Net Expense $ 37 $ 77 HIGHLIGHTS • Adjusted Net Expense decreased primarily due to prior year Crescent losses in addition to current year favorable governance expenses and favo
Slide 11: Other Financial Items
OTHER FINANCIAL ITEMS • Interest expense, net of debt AFUDC and capitalized interest, for 2Q09 was $186 million as compared to $194 million for 2Q08 • Debt AFUDC and capitalized interest for 2Q09 was $22 million as compared to $18 million for 2Q08 • Interest income and other was $38 million during 2
Slide 12: Credit and Liquidity
CREDIT AND LIQUIDITY • Total Available Liquidity at June 30, 2009 - approximately $1.5 billion(1) • Master Credit Facility(2) - available liquidity of approximately $1.3 billion • Approximately $150 million(1) of cash, cash equivalents and short-term investments at June 30, 2009 • Financings Complet
Slide 13: Operations Scorecard
OPERATIONS SCORECARD 2nd Quarter 2009 Scorecard 2009 Safety Current Status • Reliability Target • Minimize both the frequency and YTD Total Incident Case Rate (TICR) 1.07 1.15 – Employees duration of outages Reliability • Generation fleet performance YTD – Nuclear Generation Capacity 97.30% 92.50% F
Slide 14: Key Regulatory Initiatives
KEY REGULATORY INITIATIVES 2009 Achievements State Activity OH Electric Distribution rate case approved NC & SC Allen Scrubber and Catawba interest deferral approval IN Save-a-watt settlement IN Edwardsport cost increase approval IN Smart Grid settlement NC Save-a-watt settlement Upcoming Calendar/I
Slide 15: Carolinas Rate Case Filings
CAROLINAS RATE CASE FILINGS North Carolina South Carolina Requested Increase $496 million $104 million (1) Average Increase 12.6% 7.2% (1) Average Residential Increase 13.5% 10.5% Average Commercial Increase 9.8% 6.0% Average Industrial Increase 15.2% 4.2% • Requesting approval of a 12.3% return on
Slide 16: Wind Business Snapshot
WIND BUSINESS SNAPSHOT ► 2009 ACCOMPLISHMENTS ► Strategic Plan Received Wyoming Industrial Siting Growth plan of approximately 250 MW/year with a 5,000 MW potential development pipeline Council approval of our application for a permit to build the 99 MW Campbell Primarily backed by long term contrac
Slide 17: Nuclear Power Development Options
NUCLEAR POWER DEVELOPMENT OPTIONS • Piketon, OH Piketon, OH • DOE’s Portsmouth Site • Former nuclear weapons complex Campbell Hill • AREVA, UniStar, USEC Inc. and the Southern Ohio Diversification Initiative • Requesting DOE funding for the initial phase of the project Cherokee County, SC Ocotillo •
Slide 18: Climate Legislation Update
CLIMATE LEGISLATION UPDATE • On June 26, 2009, the U.S. House of Representatives passed H.R. 2454 - the American Clean Energy and Security Act (ACES) • 219 voted for and 212 voted against • Mandates reductions in greenhouse gas emissions (beginning in 2012) • By 2020, the economy-wide cap must be re
Slide 19: Value Proposition
VALUE PROPOSITION Annual Total Return Profile 15% • Proactive regulatory strategy • Forecast 5% to 7% CAGR in 10% adjusted diluted EPS through 2013 5% • Annual dividend growth • Strong balance sheet provides 0% flexibility EPS Growth Dividend TSR Yield * * Based on current dividend yield of approxim
Slide 20: Second Quarter Earnings Review and Business Update
SECOND QUARTER EARNINGS REVIEW AND BUSINESS UPDATE 20
Slide 21: Non-GAAP Reconciliations
Duke Energy Corporation Non-GAAP Reconciliations Second Quarter Earnings Review and Business Update August 4, 2009 Adjusted Diluted Earnings per Share (“EPS”) The materials for Duke Energy Corporation’s (“Duke Energy”) Second Quarter Earnings Review and Business Update presentation on August 4, 2009
Slide 22: Non-GAAP Definitions: Adjusted Segment EBIT and Other Net Expenses
hedging of a portion of the economic value of certain of its generation assets in the Commercial Power segment (as discussed above under “Adjusted Diluted Earnings per Share (‘EPS’)”). The most directly comparable GAAP measure for adjusted diluted EPS is reported diluted EPS from continuing operatio
Slide 23: Adjusted to Reported Earnings Reconciliation, June 2008 Quarter-to-Date
DUKE ENERGY CORPORATION ADJUSTED TO REPORTED EARNINGS RECONCILIATION June 2008 Quarter-to-Date (Dollars in millions, except per-share amounts) Special Items (Note 1) Costs to Economic Achieve, Crescent Hedges Adjusted Cinergy Project (Mark-to- Discontinued Total Reported Earnings Merger Impairments
Slide 24: Adjusted to Reported Earnings Reconciliation, June 2008 Year-to-Date
DUKE ENERGY CORPORATION ADJUSTED TO REPORTED EARNINGS RECONCILIATION June 2008 Year-to-Date (Dollars in millions, except per-share amounts) Special Items (Note 1) Costs to Economic Achieve, Crescent Hedges Adjusted Cinergy Project (Mark-to- Discontinued Total Reported Earnings Merger Impairments Mar
Slide 25: Adjusted to Reported Earnings Reconciliation, June 2009 Quarter-to-Date
DUKE ENERGY CORPORATION ADJUSTED TO REPORTED EARNINGS RECONCILIATION June 2009 Quarter-to-Date (Dollars in millions, except per-share amounts) Special Items (Note 1) Costs to Achieve, Crescent Related International Economic Adjusted Cinergy Guarantees and Transmission Hedges (Mark- Discontinued Tota
Slide 26: Adjusted to Reported Earnings Reconciliation, June 2009 Year-to-Date
DUKE ENERGY CORPORATION ADJUSTED TO REPORTED EARNINGS RECONCILIATION June 2009 Year-to-Date (Dollars in millions, except per-share amounts) Special Items (Note 1) Costs to Economic Achieve, Crescent Related International Hedges Adjusted Cinergy Guarantees and Transmission (Mark-to- Discontinued Tota
Slide 27: Available Liquidity Reconciliation
Duke Energy Corporation Available Liquidity Reconciliation As of June 30, 2009 (In millions) Cash and Cash Equivalents $706 Short-Term Investments 4 Subtotal 710 Less: Amounts Held in Foreign Jurisdictions (565) $145 Plus: Remaining Availability under Master Credit Facility 1,324 Total Available Liq