Duke Energy Corporation (holding Company) · NYSE:DUK
Duke Energy Corporation (holding Company) — Merger or Acquisition (February 2005)
13 slides from Duke Energy Corporation (holding Company)'s merger presentation, Feb 24, 2005
Slide 1: TEPPCO Sale, DEFS Restructuring, Share Repurchase
TEPPCO Sale Picture(s) here DEFS Restructuring Share Repurchase Jim Mogg Group Vice President and Chief Development Officer David Hauser Group Vice President and CFO
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 that could cause actual results to be different than those contemplated, including, but not limited to, changes in state, federal o
Slide 3: Transaction Summary
Transaction Summary ● Three significant transactions: ● Sale of Duke Energy Field Services general partner of TEPPCO to Enterprise ● Sale of Duke Energy’s limited partner units in TEPPCO to Enterprise ● Restructuring of DEFS to create an equal partnership between Duke Energy and ConocoPhillips ● Rep
Slide 4: Strategic Rationale
Strategic Rationale ● Consistent with portfolio management strategy ● Provides strong long term value for shareholders while reducing our risk profile ● Liquidity from transactions provides opportunity to repurchase common stock and pursue other growth opportunities as they arise ● Strategically bui
Slide 5: TEPPCO GP / LP Sale
TEPPCO GP / LP Sale ● DEFS sale of TEPPCO GP to Enterprise for $1.1 billion and sale of Duke Energy’s LP units at market price for approximately $100 million ● After-tax cash proceeds of approximately $450 million ● Gain on sale in 1Q05 of about .40 - .50 per basic share, net of minority interest ●
Slide 6: Restructuring DEFS
Restructuring DEFS ● Duke Energy has entered into an agreement with ConocoPhillips resulting in the partners each having 50% ownership interests ● Anticipate this transaction will close sometime late second quarter or early third quarter 2005 ● DEFS valued at 7x EBITDA multiple using a crude oil pri
Slide 7: $2.5 Billion Share Repurchase
$2.5 Billion Share Repurchase ● Repurchase up to $2.5 billion of common stock periodically over the next three years ● $2.5 billion will come from transaction proceeds and some cash and short term investments on our balance sheet ● Share buyback: ● Redeploys cash ● Creates value ● Allows us to retai
Slide 8: Strategic Summary
Strategic Summary ● Extraction of excellent value ● Repositions our ownership in DEFS during a period of very strong commodity prices ● Addition of ConocoPhillips and DEFS’ Canadian assets is an excellent strategic fit for DEGT ● Cash proceeds and some existing cash and short term investments will b
Slide 9: Financial and Accounting Implications
Financial and Accounting Implications ● 2005 incentive target of $1.60 per ongoing basic share will not change ● DEGT’s compound annual on-going segment EBIT growth rate remains at 3-5% through 2007 ● Expect to be on high side of range in the near term ● One time gain associated with the sale of the
Slide 10: Financial and Accounting Implications (continued)
Financial and Accounting Implications (continued) ● Once closed we will be about 80% economically hedged for the second half of 2005 and 42% economically hedged for 2006 ● Expect a mark-to-market loss on hedges of approximately $144 million during 1Q05 ● $116 million associated with 2005 hedges ● $2
Slide 11: Duke Energy 2005 Charter
Duke Energy We are Duke Energy, a leading energy company located in the Americas with an 2005 Charter affiliate real estate operation Our purpose is to create superior value for our customers, employees, communities and investors through the production, conversion, delivery and sale of energy and en
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Slide 13: Non-GAAP Reconciliation Schedules
Duke Energy Corporation Non-GAAP Reconciliation Schedules TEPPCO Sale, DEFS Restructuring, Share Repurchase 2005 and Beyond Ongoing Segment EBIT and Related Growth Percentages The Company’s slides for the TEPPCO Sale, DEFS Restructuring and Share Repurchase include a discussion of a forecasted compo