Duke Energy Corporation (holding Company) · NYSE:DUK
Duke Energy Corporation (holding Company) — Q3 2006 Earnings Presentation
31 slides from Duke Energy Corporation (holding Company)'s earnings presentation, Nov 3, 2006
Slide 1: Third Quarter Earnings Review
Third Quarter Earnings Review November 3, 2006 Jim Rogers President and Chief Executive Officer David Hauser 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: Earnings Summary
Earnings Summary 3Q06 3Q05 DUK Reported Earnings per Diluted Share $ 0.60 $ 0.04 Special Items (0.08) (0.40) Discontinued Operations (0.04) 0.92 DUK Ongoing Earnings per Diluted Share $ 0.48 $ 0.56 • While the quarter is lower than 3Q05, we remain on track to achieve revised employee incentive targe
Slide 4: U.S. Franchised Electric & Gas
U.S. Franchised Electric & Gas • Segment EBIT increased by Reported & Ongoing Segment EBIT $72 million over 3Q05 ($ millions) • The addition of Cinergy’s 3Q06 3Q05 regulated utilities in the Midwest Reported Segment EBIT $ 678 $ 606 contributed $181 million, net of Special Items - - $17 million in r
Slide 5: Natural Gas Transmission
Natural Gas Transmission • Ongoing segment results Reported & Ongoing Segment EBIT were $41 million lower primarily ($ millions) due to: 3Q06 3Q05 Higher O&M costs of $35 million Reported Segment EBIT $ 303 $ 329 Impact of revenue sharing program at Union Gas Special Items (15) - Lower equity
Slide 6: Field Services
Field Services • Represents Duke Energy’s Reported & Ongoing Equity Earnings/EBIT 50% ownership in Duke ($ millions) Energy Field Services 3Q06 3Q05 • 3Q05 reported EBIT Reported Equity Earnings/EBIT $ 158 $ 701 includes the gain on the Special Items - (614) transfer of 19.7% ownership to ConocoPhil
Slide 7: Commercial Power
Commercial Power • Commercial Power segment Reported & Ongoing Segment EBIT includes non-regulated ($ millions) generation assets in the 3Q06 3Q05 Midwest and Duke Energy Reported Segment EBIT (Loss) $ 57 $ (11) Generation Services Special Items - - • Segment earnings improved by $68 million over 3Q
Slide 8: International Energy
International Energy • Ongoing earnings for Reported & Ongoing Segment EBIT International decreased by ($ millions) $15 million compared to 3Q05 3Q06 3Q05 • Decrease is primarily due to Reported Segment EBIT $ 68 $ 63 higher regulatory fees and lower Special Items - 20 sales prices in Brazil, increa
Slide 9: Crescent Resources
Crescent Resources • Decrease in ongoing results for Reported & Ongoing Segment EBIT ($ millions) segment EBIT of $66 million 3Q05 results reflect closing of 3Q06 3Q05 several large transactions Reported Segment EBIT $ 300 $ 120 • Special Items this quarter reflect Special Items (246) - the one-ti
Slide 10: Other
Other • Ongoing losses in third quarter Reported & Ongoing EBIT 2006 improved by $96 million ($ millions) • The value of DEFS de- 3Q06 3Q05 designated hedges improved by Other Reported EBIT (Loss) $ (111) $ (165) approximately $124 million over Special Items 29 (13) 3Q05 The remaining hedges will
Slide 11: Other Items
Other Items • At the end of the quarter, net cash balance was approximately $2.0 billion • Majority of cash to be retained by the power company • Board has approved re-initiation of share buyback program of up to $500 million beginning in January A plan will be put in place such that shares of Duk
Slide 12: Commitment to Investors
Commitment to Investors Focused on what matters most to you: Growing earnings and dividends over time Achieving the full value of our portfolio Reinvesting in the business Developing a strong leadership team with a deep bench Delivering clear and transparent communications Third Quarter Earning
Slide 13: Commitment to Investors
Commitment to Investors Focused on what matters most to you: • Realigning the portfolio will provide the platform for long- Growing earnings and term growth dividends over time • On track for revised employee Achieving the full value of incentive EPS target our portfolio • Committed to growth rate
Slide 14: Commitment to Investors
Commitment to Investors Focused on what matters most to you: Growing earnings and dividends over time • Re-deploy cash from sales to infrastucture businesses Achieving the full value of our portfolio Closed sale of CMT Secured partner for Crescent Reinvesting in the business • With sale of bu
Slide 15: Commitment to Investors
Commitment to Investors Focused on what matters most to you: Growing earnings and dividends over time Achieving the full value of our portfolio • Continued investment in scrubbers on coal plants Reinvesting in the business • Filed for cost recovery on Developing a strong proposed nuclear plant l
Slide 16: Active Natural Gas Projects
Active Natural Gas Projects Pine River St. Clair Power Dawn Delivery Enhancement Dawn Area Canaport Storage Dawn-Trafalgar Phase 1 – 3 Cape Cod Excelerate NE Gateway Islander East Time II Ramapo Lebanon BP Logan Connector Accident Mid-Continent Jewell Ridge Crossing Piedmont Egan Expansion Saltville
Slide 17: Commitment to Investors
Commitment to Investors Focused on what matters most to you: Growing earnings and dividends over time Achieving the full value of our portfolio Reinvesting in the business Developing a strong • New organization announced leadership team with a Centralized functions deep bench Strong manageme
Slide 18: New Duke Energy Organization
New Duke Energy Organization Top Tier averages 20 years of energy experience Jim Rogers President & CEO Bill McCollum Brew Barron Jim Turner David Hauser Tom O’Connor Franchised Commercial Regulated Gen Nuclear Electric & Gas Finance Businesses Keith Trent Marc Manly Chris Rolfe Ruth Shaw Strategy &
Slide 19: Commitment to Investors
Commitment to Investors Focused on what matters most to you: Growing earnings and dividends over time Achieving the full value of our portfolio Reinvesting in the business Developing a strong leadership team with a deep bench Delivering clear and • Sharing updated Merger transparent communicati
Slide 20: Merger Scorecard: Measuring Success
Measuring Success e c a rd S c o r erg er lts M ial Re s nc u educt ions . F i na rk fo r ce r 1 otal w o e T a c h i ev to Costs O&M -fu e l N on sults ti o n a l Re 2. Opera y Safet e n tal n m Enviro y ilit nt Reliab ciency n gag e m e t e ffi e E Pla n E m p l o ye t o m e r& s fa ction 3. Cus u
Slide 21: Track Record of Achievements
Track Record of Achievements Closed merger with Cinergy Completed the sale of the West and Northeast unregulated plants and trading book Completed the joint venture for Crescent Resources Completed the sale of Commercial Marketing and Trading Repurchased $500 million of stock in $1 billion
Slide 22: Creating Spectra Energy
Creating Spectra Energy • Continue to target Jan. 1, 2007 as effective date • Spectra Energy name announced Oct. 30 • NYSE ticker symbol expected to be “SE” • Submitted request for Private Letter ruling from the IRS • Secured Virginia state approval • Filed first amendment to the Form 10, responding
Slide 23: Slide 23
Slide 24: Non-GAAP Reconciliation Schedules Third Quarter 2006 Earnings Review
Duke Energy Corporation Non-GAAP Reconciliation Schedules Third Quarter 2006 Earnings Review 2006 Employee Earnings-per-share (“EPS”) Incentive Target Measure The slides and prepared remarks for Duke Energy’s November 3, 2006 earnings review include references to the company's original and expected-
Slide 25: Anticipated Ongoing Diluted EPS Growth Percentages
Anticipated Ongoing Diluted EPS Growth Percentages The slides and prepared remarks for Duke Energy’s November 3, 2006 earnings review include a discussion of the anticipated growth in ongoing diluted EPS for at least the next three years for post-spinoff Duke Energy and for Spectra Energy, the gas c
Slide 26: After-Tax Proceeds from Crescent Joint Venture and Sale of CMT
DUKE ENERGY CORPORATION After-Tax Proceeds from Creation of Crescent Resources Joint Venture and Sale of CMT (Dollars in millions) Proceeds on Crescent Joint Venture Net proceeds from issuance of debt by Crescent Resources $ 1,187 Proceeds received from sale of equity interest 415 Estimated income t
Slide 27: Net Cash Balance Reconciliation
DUKE ENERGY CORPORATION Net Cash Balance Reconciliation (Dollars in millions) 9/30/2006 Cash and Cash Equivalents $ 820 Short-Term Investments 2,097 Short-Term Commercial Paper Outstanding (932) (1) Net Cash Balance $ 1,985 (Rounded $2,000) (1) - Excludes approximately $300 million of commercial pap
Slide 28: Ongoing to Reported Earnings Reconciliation, September 2005 Quarter-to-date
DUKE ENERGY CORPORATION ONGOING TO REPORTED EARNINGS RECONCILIATION September 2005 Quarter-to-date (Dollars in millions, except per-share amounts) Special Items (Note 1) Initial and MTM change on Gain on Field Services Subsequent gain Impairment of de-designated Ongoing transfer of hedge de- on de-
Slide 29: Ongoing to Reported Earnings Reconciliation, September 2005 Year-to-date
DUKE ENERGY CORPORATION ONGOING TO REPORTED EARNINGS RECONCILIATION September 2005 Year-to-date (Dollars in millions, except per-share amounts) Special Items (Note 1) Initial and Gain on Gains (Losses) MTM change on Mutual Field Services Subsequent transfer of on sales and de-designated Ongoing insu
Slide 30: Ongoing to Reported Earnings Reconciliation, September 2006 Quarter-to-date
DUKE ENERGY CORPORATION ONGOING TO REPORTED EARNINGS RECONCILIATION September 2006 Quarter-to-date (Dollars in millions, except per-share amounts) Special Items (Note 1) Gain on Costs to Costs to Sale of Gain on Achieve, Achieve, Ongoing Interest in Sales of Cinergy Anticipated Discontinued Total Re
Slide 31: Ongoing to Reported Earnings Reconciliation, September 2006 Year-to-date
DUKE ENERGY CORPORATION ONGOING TO REPORTED EARNINGS RECONCILIATION September 2006 Year-to-date (Dollars in millions, except per-share amounts) Special Items (Note 1) Gain on Costs to Costs to Sale of Net Gain on Gain on Impairment of Achieve, Achieve, Ongoing Interest in Settlement of Sales of Camp