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EUROPEAN INVESTOR VISITS – Duke Energy Corporation

Duke Energy Corporation · Nov 17, 2014 · 61 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 1
    European Investor Visits London Frankfurt Zurich Geneva Milan 17-20 November, 2014
  2. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 2
    Safe Harbor 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…
  3. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 3
    Duke Energy representatives Steve Young EVP Chief Financial Officer Bill Currens Vice President Investor Relations (704) 382-1603 bill.currensduke-energy.com Beau Pratt Sr. Analyst Investor Relations (704) 382 -2284…
  4. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 4
    Table of contents Duke Energy overview Financial highlights Appendix Q&A 4 European Investor Visits
  5. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 5
    DUKE ENERGY OVERVIEW FINANCIAL HIGHLIGHTS 5 European Investor Visits
  6. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 6
    Business mix reinforces growth and optimization efforts Regulated Utilities - 84% of mix (1) International 12% of mix (1) Commercial Power 4% of mix (1) Guatemala Midwest 300 MW El Salvador 300 MW Ecuador 200 MW Peru Carolinas…
  7. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 7
    Duke Energy: scale, balance and diversity Largest Utility in the United States (1) Total assets: 120 billion, Regulated Utilities 106 billion Market capitalization: 59 billion U.S. generation capacity: 50 GW (owned MW) Electric…
  8. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 8
    Commercial businesses largely contracted & provide diversity International Energy Commercial Power 4,600 MW of generation in Latin America Renewables long-term contracted projects with 25% investment in National Methanol creditworthy…
  9. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 9
    Announced agreement to sell Midwest generation to Dynegy Transaction overview Zimmer Generating Station Announced sale of Midwest generation business to Dynegy for 2.8 billion in cash in August Use of proceeds could include a…
  10. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 10
    DUKE ENERGY OVERVIEW FINANCIAL HIGHLIGHTS 10 European Investor Visits
  11. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 11
    Financial objectives for 2014 and beyond Achieve Grow revised 2014 EPS EPS 4 - 6% guidance range of through 2016 (1)(2) 4.50 - 4.65 (1) Grow Maintain strong dividend within 65 - 70% credit ratings and target payout (1)…
  12. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 12
    Established track record of long-term, attractive total shareholder returns 25.2% 24.0% 22.5% 20.6% 19.5% 17.5% 16.6% 15.1% 15.7% 13.0% 13.1% 12.2% 2014 YTD 1 Year 3 Year 5 Year Annualized Annualized DUK Philadelphia…
  13. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 13
    Established track record of dividend growth DUK has an above-average dividend yield DUK annual dividend per share (1) compared to its peer group DUK is growing the dividend annually, but at a rate slower than the growth in EPS DUK…
  14. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 14
    Achieving long term earnings growth of 4-6% through 2016 (1) Adjusted diluted EPS summary (1) EPS CAGR Long-term segment earnings drivers Contribution Thru 2016 Regulated Investments in regulated fleet 1% Utilities (net of…
  15. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 15
    Base plan supported by incremental growth opportunities Retail Load Growth 0.5% 4% Adjusted EPS growth Optimize Commercial highly achievable Businesses As of Sept. 30, rolling twelve month trend is with base plan Accretive…
  16. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 16
    Growth investments of 16-20B from 2014-2018 T&D infrastructure investments NCEMPA asset purchase (1) in Indiana (SB 560) Midwest W.S. Lee CCGT in SC Environmental compliance Regulated solar investments in NC (128 MW)…
  17. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 17
    Growing renewables portfolio (2 billion of investments through 2018) Commercial Renewables Regulated Solar Rooftop solar installation in NC Happy Jack Wind Farm Wind North Carolina Solar RFP Construction of Los Vientos III and IV…
  18. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 18
    Regulated Utilities weather-normal volume trends Rolling 12 month and YTD Regulated Load Growth Trends weather-normalized load growth is ahead of our 2014 expectations of 1.6% 1.6% 0.5% growth Growth by customer class: 0.5% 0.6%…
  19. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 19
    Residential customer growth continues to outpace usage Number of residential customers continues to consistently grow at around 1% over the last 12 months Residential Customer Trends Customer growth in our jurisdictions was led by…
  20. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 20
    Wholesale sales growth provides earnings support (1) 2014 total wholesale net margin is Wholesale Net Margin expected to be 1.1 billion New long-term contracts in the Carolinas New 20-year contract with NCEMC at 1 B Duke Energy…
  21. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 21
    Non-fuel Operations & Maintenance (O&M) cost targets through 2016 (1) 9% merger savings to keep O&M flat through 2014 Our Objective Cost Reductions, Figures rounded and chart not to scale by category Flat O&M expense from 2014…
  22. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 22
    Coal ash management activities moving forward 3Q 2014 Activities Next Steps Implemented new internal Coal Combustion Products (CCP) Developing excavation plans for four high-priority sites organization to oversee ash basin facility…
  23. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 23
    Edwardsport IGCC plant operations on track Operational Status IGCC Rider Proceeding Status Tracker Costs Thru Filed Status Plant began commercial operations in June 2013 Awaiting order; expected IGCC-11 Mar. 2013 May 2013 in 1H…
  24. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 24
    Duke Energy key takeaways Substantial, diversified Largest regulated earnings and cash U.S. utility flows Attractive dividend yield Strong balance sheet with growth commitment and credit profile A solid, low risk long-term…
  25. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 25
    Appendix 25 European Investor Visits
  26. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 26
    Business segment structure DUKE ENERGY REGULATED COMMERCIAL INTERNATIONAL UTILITIES POWER ENERGY North and South Duke Energy Duke Energy Carolinas Carolina Renewables North and South Duke Energy Duke Energy Progress Carolina…
  27. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 27
    Update on key 2014 earnings guidance assumptions ( in millions) Original 2014 2014 YTD assumptions (1) (thru 9/30/14) Adjusted segment income (expense) (2): Regulated Utilities 2,855 2,346 International Energy 430 356 Commercial…
  28. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 28
    Key 2014 earnings sensitivities Driver EPS Change Regulated Utilities 100 bps change in earned return on equity +/- 0.39 1 billion change in rate base +/- 0.08 1% change in USFE&G volumes +/- 0.10 International 10% change in BRL/US…
  29. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 29
    3Q 2014 Key Accounting Matters Coal Ash Asset Retirement Obligation Midwest Generation Business Accounting rules require the company to recognize an Announced plans to exit the Midwest generation business in Asset Retirement Obligation…
  30. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 30
    Primary 4Q 2014 EPS drivers (1) Primary 4Q 2014 year-over-year EPS drivers (1)(2) Nuclear outage cost levelization benefits Lower results in Latin America 3.69 Reduced COR amortization in Florida 0.80 - Normal weather 0.95 Higher…
  31. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 31
    Growth Investments 31 European Investor Visits
  32. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 32
    Diverse set of growth initiatives across our jurisdictions Infrastructure (7-9 Billion) Generation (6-8 Billion) Compliance (3 Billion) Atlantic Coast Pipeline NCEMPA Asset Purchase EPA regulations Potential 2 billion investment (1)…
  33. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 33
    New generation projects 2018 Citrus County CC Florida (1.5 Billion Investment) Major Generation Projects 1,640 MW CCGT, expected online in 2018 CPCN issued by FPSC in October 2014 ( millions) 2017 Lee CC Carolinas (600 Million…
  34. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 34
    Atlantic Coast Pipeline provides DUK investment opportunity of 2 billion (1) Joint Venture Ownership Structure Next Steps and Necessary Approvals (2) Parent Company Ownership Percentage Event Timing 45% NCUC approval of affiliate…
  35. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 35
    Agreement in place to purchase NCEMPAs joint ownership Agreement to purchase the North Carolina Eastern Municipal Power Agency (NCEMPA) joint ownership in several Duke Energy Progress plants (1) Purchase price of approximately 1.2…
  36. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 36
    Duke Energy Indiana files 1.9 billion T&D infrastructure plan On August 29th, filed a seven-year T&D infrastructure improvement plan with the Indiana Utility Regulatory Commission (IURC) under the provisions of Senate Enrolled Act…
  37. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 37
    Regulated Utilities supplement 37 European Investor Visits
  38. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 38
    Constructive Carolinas jurisdictions provide growth opportunities Jurisdictional Details Average Customer Rate (cents/kwh)(1) US Average: 13.8 Total assets in rate base: 23.5 billion US Average: 12.0 Allowed ROE : 10.2% in DEC-NC,…
  39. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 39
    Florida jurisdiction remains an attractive region for new customers Jurisdictional Details Average Customer Rate (cents/Kwh)(1) US Average: 13.8 Total assets in rate base: 8.1 billion US Average: 12.0 Allowed ROE: 10.5% 12.5 US…
  40. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 40
    Pro-business Midwest jurisdictions value healthy utilities Jurisdictional Details Average Customer Rate (cents/Kwh)(1) US Average: 13.8 Total assets in rate base: 9 billion Allowed ROE US Average: 12.0 US Average: 10.3 Indiana:…
  41. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 41
    Fuel and Joint Dispatch savings update Fuel and Joint Dispatch (JDA) Savings Quarterly Savings Results ( in millions) Guaranteed 687 million in fuel and joint 50 400 dispatch savings to Carolinas customers over 350 40 5 years (1)…
  42. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 42
    Open Major Regulatory Proceedings (as of November 4, 2014) Entity Filing Docket Status Intervener Staff Filing Evidentiary Expected number filings Hearings Order Ohio 2014 ESP 14-0841-EL- Intervener and PUCO Sep. 26, 2014 Oct. 2, 2014…
  43. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 43
    Pending environmental regulations Rule overview Potential impacts to Duke Energy Regulates Hazardous Air Pollutants (e.g., mercury & non-mercury HAPs) Additional air emissions control Mercury and Air Compliance deadline April 16,…
  44. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 44
    Pending environmental regulations, cont. Rule overview Potential impacts to Duke Energy Regulates coal combustion residuals (e.g., coal ash) Close or upgrade wet ash ponds Coal Combustion Rule proposed in June 2010 Convert wet ash…
  45. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 45
    International Energy supplement 45 European Investor Visits
  46. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 46
    International strategic review Strategic review of International is underway International owns and operates Wide range of options being considered 4,600 MW of net generation Includes optimizing offshore cash and development of growth…
  47. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 47
    Brazils reservoir levels SE region 90 80 Reservoir Level (% Maximum Volume) 70 62.90 63.75 62.45 60 60.83 48.71 50 43.18 45.48 54.13 55.06 45.05 43.18 40.30 41.62 38.80 37.40 40 34.60 36.30 36.30 28.86 37.46 34.40…
  48. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 48
    Duke Energy International National Methanol Company (NMC) Background NMC is a producer of methanol and MTBE in Saudi Arabia Current ownership: Saudi Basic Industries Corporation (SABIC) - 50%, Celanese - 25%, and Duke Energy - 25%…
  49. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 49
    Commercial Power supplement 49 European Investor Visits
  50. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 50
    Duke Energy Renewables Grown to scale since entry in 2007 Happy Jack Wind Farm, Wyoming Current Operating Portfolio of 1,750 net owned MW (1) Wind 1,625 MW Solar 120 MW Low risk profile with long-term PPAs Continue wind…
  51. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 51
    Commercial transmission announced project pipeline Project / Total Cost of Milestones Next 2014-2016 2017 & beyond In-service date Project Achieved Milestone (Total 100M) Pioneer JV formed in 2008 with AEP MISO Segment 330 million…
  52. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 52
    Financing assumptions 52 European Investor Visits
  53. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 53
    Simplified financing structure Duke Energy (HoldCo) Cinergy Corp. Duke Energy Progress Energy (HoldCo) International (HoldCo) (1) Duke Energy Duke Energy Duke Energy Duke Energy Duke Energy Carolinas Ohio Indiana Progress…
  54. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 54
    Progress on 2014 financing plan (as of November 4, 2014) (1) ( in millions) 2,000 1,500 1,000 500 - Duke Duke Duke International Renewables Duke Duke Energy Energy Energy Energy Energy (HoldCo)(2) Progress (3) Florida (3)…
  55. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 55
    Access to capital 2014 long-term debt financing activity Amount Credit Ratings ( in Entity Date Issued Term Type Rate (M/S&P/F) millions) Accounts Receivable Initial variable rate of 225 DE Florida March 2014 N/A 3 Year…
  56. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 56
    Liquidity summary (as of September 30, 2014) ( in millions) Duke Duke Duke Duke Duke Duke Duke Energy Carolinas Progress Florida Indiana Ohio Kentucky Total (1) 2,250 1,000 750 650 700 550 100 6,000 Master Credit Facility Less:…
  57. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 57
    Strength of balance sheet supports credit metrics and ratings (As of November 6, 2014) Credit metrics summary 2014E Target Holding company FFO / Debt 19% 17% Fitch Moody's S&P FFO Interest Coverage 5.3x 3.5x DUKE ENERGY Stable…
  58. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 58
    Other 58 European Investor Visits
  59. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 59
    Sustainability Ratings and Rankings 2010 2011 2012 2013 2014 Score: 76 Score: 78 Score: 75 Score: 73 Score: 78 North America and North America and North America Index North America Index North America Index World Indices World…
  60. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 60
    Investor Relations App Free mobile app for Investor Relations materials now available for iPhone, iPad, and Android mobile devices The Duke Energy app provides mobile access to commonly used IR materials, including: SEC Filings…
  61. EUROPEAN INVESTOR VISITS – Duke Energy Corporation – slide 61
    For additional information on Duke Energy, please visit: www.duke-energy.com/investors

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