Duke Energy Corporation (holding Company) · NYSE:DUK
Duke Energy Corporation (holding Company) — Corporate Update (September 2005)
9 slides from Duke Energy Corporation (holding Company)'s corporate update, Sep 14, 2005
Slide 1: Exiting the DENA Business
Exiting the DENA Business September 14, 2005 Paul Anderson Chairman and CEO 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: Exiting the DENA Business
Exiting the DENA Business Excluding Midwest Assets ■ Significant progress made in last two years ● Reduced trading book ● Reduced generation portfolio ● Reduced mark-to-market exposure ■ Rationale ● Encumbered by size and complexity of long-dated legacy positions ● No clear path to breakeven EBIT by
Slide 4: Financial Highlights and Benefits
Financial Highlights and Benefits Total Day 1 Impact Pre-tax charge ($1.3 billon) Net Income ($0.8 billion) EPS Impact ($0.88 per basic share) ■ Benefits include: ● Accelerated costs savings of approximately $160 million at DENA ● Improvements in Ongoing earnings from continuing operations Duke
Slide 5: Financial Impacts of Exit Decision
Financial Impacts of Exit Decision Next 12 ($ in billions) Day 1 Months Assets $ (0.4) $ 0.0 Contract Portfolio Power Derivatives (2.3) 0.0 Gas Derivatives 1.4 0.3 Pre-tax Charge (1.3) 0.3 Taxes 0.5 (0.1) NET INCOME $ (0.8) $0.2 Transaction and Termination Costs and Non-Derivative Contracts TBD Pre-
Slide 6: Other Considerations
Other Considerations ■ Included in Discontinued Operations ● Accrual book moves to mark-to-market ● Management/G&A to manage the book and plants ● Changes in the value received for physical assets ■ Excluded from Discontinued Operations are the Midwest plants, the McMahon plant in Canada, and certai
Slide 7: Liquidity and Credit Metrics
Liquidity and Credit Metrics ■ Complete disposition of DENA ● Significantly strengthens Duke Capital’s credit profile ● Reduces collateral requirements ● Improves liquidity position ■ Projected cash proceeds from assets sales expected to exceed cash needed to terminate DENA’s trading book, including
Slide 8: Summary
Summary ■ Decision to exit DENA business allows “fresh start” ● Combine DENA’s Midwest assets with CG&E commercial platform ● Trading and marketing operation will move to shorter terms in trading contracts – terms generally less than one year ■ Focused on long-term vision of Duke Energy and enhancin
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