Duke Energy Corporation (holding Company) · NYSE:DUK
Duke Energy Corporation (holding Company) — Q1 2010 Earnings Presentation
29 slides from Duke Energy Corporation (holding Company)'s earnings presentation, May 4, 2010
Slide 1: First Quarter Earnings Review and Business Update
FIRST QUARTER Earnings Review and Business Update May 4, 2010 Jim Rogers Chairman, President and Chief Executive Officer Lynn Good Group Executive and Chief Financial Officer
Slide 2: 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 additiona
Slide 3: 1Q 2010 Earnings: Progress on Earnings Objectives
1Q 2010 EARNINGS: PROGRESS ON EARNINGS OBJECTIVES Reported to Adjusted Reconciliation 1Q10 1Q09 Adjusted Diluted EPS Reported Diluted EPS $ 0.34 $ 0.27 Adjustments to Reported: Mark-to-Market Impact of Economic Hedges (0.01) (0.01) $0.36 Voluntary Opportunity Plan/Office $0.28 consolidation 0.03 --
Slide 4: 1Q 2010 Earnings Summary and Drivers
1Q 2010 EARNINGS SUMMARY AND DRIVERS USFE&G Adjusted Segment EBIT Drivers Adjusted Segment EBIT (in millions) 1Q10 1Q09 ▲Increased revenues from 2009 rate cases in the US Franchised Electric and Gas (USFE&G) $ 744 $ 557 Carolinas – $75M ▲Favorable weather – $48M Commercial Power 100 103 ▲Increased r
Slide 5: Improvement in Normalized Volume Trends – USFE&G
IMPROVEMENT IN NORMALIZED VOLUME TRENDS – USFE&G Residential Commercial Change vs. Prior-Year Quarter Change vs. Prior-Year Quarter 2.6% 1.7% 1.5% 1.3% 0.6% -0.4% -1.0% -0.9% -1.1% -0.9% 1Q09 2Q09 3Q09 4Q09 1Q10 1Q09 2Q09 3Q09 4Q09 1Q10 Industrial USFE&G Total Change vs. Prior-Year Quarter 8.7% Chan
Slide 6: Ohio Competitive Environment Update
OHIO COMPETITIVE ENVIRONMENT UPDATE DE Ohio Customer Switching Customer switching pressures continue: 50% • As of March 31, 2010 40% • 48% gross switching driven primarily by industrial and DERS DE Ohio commercial classes 30% Customer • 20% switching, net of DERS Acquisitions 20% Net 10% Switching U
Slide 7: Continued Focus on Cost Control Efforts
CONTINUED FOCUS ON COST CONTROL EFFORTS Adjusted O&M Costs (1) Voluntary Separation Plan and Office ($ in millions) Consolidation 900 • Approximately 900 employees elected to $822 accept the offer $800 • Separation charges of approximately $165 800 million (excluding approximately $15 million of pen
Slide 8: Update on Major Construction Projects – USFE&G
UPDATE ON MAJOR CONSTRUCTION PROJECTS – USFE&G Cliffside USFE&G Major Construction Projects1 • 825 MW advanced clean-coal unit expected in- service in 2012 • Project is over 60% complete and on budget $1,280 $1,100 Edwardsport $1,600 $1,300 $410 $560 • 618 MW IGCC facility expected in-service in 201
Slide 9: Our Commitments to Investors
OUR COMMITMENTS TO INVESTORS Commitments Short-Term Actions Long-Term Goals • On track to achieve 2010 adjusted • Achieve adjusted diluted EPS CAGR of 4-6% diluted EPS of $1.25 to $1.30 off a 2009 base 1Q10 Adjusted Diluted EPS of $0.36 • Continued growth in dividend but at a rate Grow Earnings 1
Slide 10: Appendix
APPENDIX First Quarter Earnings Review and Business Update May 4, 2010
Slide 11: Update on Key Assumptions for 2010
UPDATE ON KEY ASSUMPTIONS FOR 2010 ($ in Millions) 2010 FY 2010 YTD Assumptions (thru 3/31/10) USFE&G Adjusted Segment EBIT $2,630 $744 Commercial Power Adjusted Segment EBIT $315 $100 International Adjusted Segment EBIT $485 $140 Other Adjusted Net Expense $255 $71 Interest Expense $850 $210 AFUDC
Slide 12: US Franchised Electric and Gas
US FRANCHISED ELECTRIC AND GAS Reported & Adjusted Segment EBIT Adjusted segment EBIT increased primarily due to: 1Q10 1Q09 • $75 million due to rate adjustments in the Carolinas ($ in Millions) • $48 million due to favorable weather Reported Segment EBIT $ 744 $ 557 • $33 million due to higher reta
Slide 13: Industrial Volume Quarterly Trends
INDUSTRIAL VOLUME QUARTERLY TRENDS Q1 Q2 Q3 Q4 Primary Metals (Billed GwH) Textiles (Billed GwH) 1,500 1,500 1,000 1,000 500 500 0 0 2008 2009 2010 2008 2009 2010 (Billed GwH) Chemicals (Billed GwH) Total Industrial 1,500 12,000 9,000 1,000 6,000 500 3,000 0 0 2008 2009 2010 2008 2009 2010 Note: The
Slide 14: Maintain Focus on Operational Performance
MAINTAIN FOCUS ON OPERATIONAL PERFORMANCE Nuclear Generation Capacity Factor Fossil Generation Commercial Availability 100% 100% 95% 90% 90% 80% 85% 70% Q12010 Q22010 Q32010 Q42010 Q12010 Q22010 Q32010 Q42010 2010 Target Actual 2010 Target Actual Nuclear Total Operating Cost – $/MWh Total Fossil Pro
Slide 15: Commercial Power
COMMERCIAL POWER Reported & Adjusted Segment EBIT Adjusted segment EBIT decreased primarily due to: ($ in Millions) 1Q10 1Q09 • $30 million in lower volumes as a result of customer switching in Ohio, net of Duke Energy Retail Sales Reported Segment EBIT $ 129 $ 114 (DERS) retention Adjustments (29)
Slide 16: International
INTERNATIONAL Reported & Adjusted Segment EBIT Adjusted segment EBIT increased primarily due to: ($ in Millions) 1Q10 1Q09 • $20 million increased contribution from NMC • $16 million favorable foreign currency Reported Segment EBIT $ 140 $ 93 exchange rates Adjustments -- -- Adjusted Segment EBIT $
Slide 17: Other
OTHER Reported & Adjusted Net Expense Adjusted net expense increased primarily due to: 1Q10 1Q09 • $16 million of donations to the Duke Energy ($ in Millions) Foundation Reported Net Expense $ 146 $ 90 Adjustments (75) (40) 2010 Adjustments: Adjusted Net Expense $ 71 $ 50 • $68 million voluntary sep
Slide 18: Liquidity and YTD Financings
LIQUIDITY AND YTD FINANCINGS Liquidity (as of March 31, 2010) ($ in millions) Duke DE DE DE DE Energy Carolinas Ohio Indiana Kentucky Total Master Credit Facility Facility Size (1) $ 1,097 $ 840 $ 650 $ 450 $ 100 $ 3,137 (2) Less: Notes Payable and Commercial Paper - (300) - (150) - (450) Drawdown -
Slide 19: USFE&G Quarterly Weather Impacts
USFE&G QUARTERLY WEATHER IMPACTS ($ in Millions) Weather EBIT to Normal: 2010 2009 First Quarter $ 60 $ 10 Second Quarter $ 20 Third Quarter $(40) Fourth Quarter $ 10 Full Year $ -- * Favorable/(Unfavorable) Key Weather Data (1Q10) ►Charlotte, NC experienced its coldest winter in over 40 years ►Heat
Slide 20: Upcoming Regulatory Calendar – Key Filings
UPCOMING REGULATORY CALENDAR – KEY FILINGS IGCC CWIP Rider 4 – Indiana • Docket: 43114 – IGCC 4 • Pending commission action IGCC Cost Update – Indiana • Docket: 43114 – IGCC4S • Upcoming Key Dates: • June 18th – Public and intervenor testimony due • July 23rd – Duke rebuttal testimony due • August 1
Slide 21: Upcoming Activities
UPCOMING ACTIVITIES Event Date International “Deep Dive” Investor Session June 29th 2:00 p.m. Second Quarter 2010 Earnings Call August 3rd 11:00 a.m. Third Quarter 2010 Earnings Call October 29th 11:00 a.m. Analyst Day/Fourth Quarter 2010 Earnings TBD 21 First Quarter Earnings Review and Business Up
Slide 22: First Quarter Earnings Review and Business Update
First Quarter Earnings Review and Business Update May 4, 2010 22
Slide 23: Duke Energy Corporation Non-GAAP Reconciliations
Duke Energy Corporation Non-GAAP Reconciliations First Quarter Earnings Review and Business Update May 4, 2010 Adjusted Diluted Earnings per Share (“EPS”) The materials for Duke Energy Corporation’s (“Duke Energy”) First Quarter Earnings Review and Business Update on May 4, 2010 include a discussion
Slide 24: Adjusted Segment EBIT and Other Net Expenses
comparable GAAP financial measure is not available at this time, as management is unable to project special items or mark-to-market adjustments for future periods. Adjusted Segment EBIT and Other Net Expenses for 2008 and 2009 and Forecasted Adjusted Segment EBIT and Other Net Expenses for 2010 The
Slide 25: Ohio Customer Switching Impacts to Diluted EPS
Ohio Customer Switching Impacts to Diluted Earnings per Share The materials for Duke Energy’s First Quarter Earnings Review and Business Update on May 4, 2010 include a discussion of the fact that the Midwest Generation component of the Commercial Power segment has had certain customers switch away
Slide 26: Adjusted to Reported Earnings Reconciliation – March 2010 YTD
DUKE ENERGY CORPORATION ADJUSTED TO REPORTED EARNINGS RECONCILIATION March 2010 Year-to-Date (Dollars in millions, except per-share amounts) Special Items (Note 1) Voluntary Costs to Opportunity Economic Achieve, Plan/Office Hedges Adjusted Cinergy Consolidation (Mark-to- Total Reported Earnings Mer
Slide 27: Adjusted to Reported Earnings Reconciliation – March 2009 YTD
DUKE ENERGY CORPORATION ADJUSTED TO REPORTED EARNINGS RECONCILIATION March 2009 Year-to-Date (Dollars in millions, except per-share amounts) Special Items (Note 1) Costs to Economic Achieve, Crescent Hedges Adjusted Cinergy Related (Mark-to- Discontinued Total Reported Earnings Merger Guarantees Mar
Slide 28: Operations and Maintenance Expense
Duke Energy Corporation Operations and Maintenance Expense (In millions) Three months ended March 31, 2010 March 31, 2009 Operation, maintenance and other (a) $899 $811 Transfers to capital (b) 28 29 Less: Voluntary Opportunity Plan/Office Consolidation Costs (c) (65) - Deferrals, recoverables, and
Slide 29: Available Liquidity Reconciliation
Duke Energy Corporation Available Liquidity Reconciliation As of March 31, 2010 (In millions) Cash and Cash Equivalents $1,080 Less: Amounts Held in Foreign Jurisdictions (682) $398 Plus: Remaining Availability under Master Credit Facility 2,157 Total Available Liquidity as of March 31, 2010 (a) $2,