Duke Energy Corporation (Holding Company) · NYSE:DUK
Duke Energy Corporation (Holding Company) — Lehman Brothers Energy/Power Conference 2003
12 slides from Duke Energy Corporation (Holding Company)'s conference presentation, Sep 4, 2003
Slide 1: Fred Fowler, President and Chief Operating Officer
Fred Fowler President and Chief Operating Officer Lehman Brothers Energy/Power Conference September 4, 2003
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, including, but not limited to, changes in the utility regulatory environment, the impact of competition from other energy supplier
Slide 3: Balanced Strategy and Business Model
Balanced Strategy and Business Model Duke Energy’s Strategy Balanced Business Model • Actively manage a portfolio of • Regulated / merchant strategic energy assets • Locations • Manage and trade energy positions • Commodities and risks related to our assets • Risks / returns • Deliver energy product
Slide 4: 2003 Strategic Directives
2003 Strategic Directives 1 Focus on positive net cash generation 2 Invest in our strongest business segments 3 Size businesses to market realities 4 Address merchant energy issues 5 Strengthen relationships with customers 6 Reduce regulatory & legal risk
Slide 5: U.S. Competitive Generating Capacity
U.S. Competitive Generating Capacity Greater than a third of current U.S. generating capacity is market-based. 1,200 1,000 800 Regulated Gigawatts Capacity 600 400 Market-Based 200 Capacity 0 1998 1999 2000 2001 2002 2003 Source: Cambridge Energy Research Associates and Platts POWERdat® copyrighted
Slide 6: 2003 Strategic Directives: Focus on positive net cash generation
2003 Strategic Directives 1 Focus on positive net cash generation 2003 EPS expected to be at low end of range of $1.35 to $1.60 per share Significantly reduced capital and O&M spending Realizing approximately $1.6 billion in gross proceeds from non-core, non-strategic asset sales Expect to r
Slide 7: 2003 Net Debt Reduction
2003 Net Debt Reduction ($ in millions) 2003 Activity thru June 30: Reduction of LT Debt, CP and Trust Preferred Securities $ 2,387 LT Debt Issued (1,707 ) Debt reduction related to sale of Empire Pipeline 58 Net Increase in Cash Balance as of 6/30/03 625 Net Reduction in Debt and Trust Preferreds $
Slide 8: Leverage: Duke Energy vs. Peers
Leverage: Duke Energy vs. Peers Total Debt to Capitalization as of June 30, 2003 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% DUK SO AEP D EXC TXU EP W MB CPN DYN AES Source: Bloomberg
Slide 9: 2003 Strategic Directives: Invest in our strongest business segments
2003 Strategic Directives 2 Invest in our strongest business segments 2003 Capex Disciplined approach to $2.5 capital investment Expansion Capital expenditures for 2003 $2.0 Maintenance expected to be $3 billion; $2.4 billion in 2004 and 2005 $1.5 $ in billions The majority of capital $1.0 exp
Slide 10: 2003 Strategic Directives
2003 Strategic Directives 3 Size businesses to market realities Majority of scaling back has been in our merchant businesses Focusing on efficient operations, streamlining costs and increasing productivity 4 Address merchant energy issues Working through first down cycle in merchant energy; di
Slide 11: 2003 Strategic Directives
2003 Strategic Directives 5 Strengthen relationships with customers Competitive advantage in reputation for reliability, operational excellence and financial strength Continue to reinforce existing customer relationships and pursue new customers 6 Reduce regulatory & legal risk Positive outcom
Slide 12: Strengths and Competitive Advantages
Strengths and Competitive Advantages • Focus on balance sheet improvement, cash flow and liquidity • Balanced business model – regulated / unregulated • Strong competitive position: geography, lines of businesses and fuel sources • “Free” option on merchant energy business • Management depth and exp
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