Earnings Review and Business Update May 7, 2014 First Quarter 2014 Lynn Good, President and CEO Steve Young, Executive VP and CFO
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…
Topics for todays call Duke Energy value proposition Business update Dan River & coal ash management Winter storm response Fuel and joint dispatch results Edwardsport status Strategic update Commercial businesses Growth…
Duke Energy value proposition Superior Total Shareholder Return (TSR) Potential Long-term EPS growth of 4-6% (1) R Attractive annual dividend yield (4.3%) with growth flexibility (2) 8.3%-10.3% average annual TSR potential Strong…
Dan River coal ash discharge Dan River Steam Station Pond Diagram Sealed Storm Water Pipe Costs related to remediating the Dan River site as well as the river will be borne by the company (1Q 2014 costs 15 million); total…
Long-term coal ash management strategies Near-term Actions Longer-term Actions 1. Formed dedicated internal task force to address Preparing comprehensive engineering assessments near and long-term coal ash management system-wide across…
Our people rose to challenges from extreme winter weather In February 2014, winter storms impacted our Carolinas service territories Over 900,000 customer outages Over 4,200 personnel supported restoration efforts Storm costs of 35…
Post-merger fleet diversity benefits Carolinas customers during extreme weather Fuel and Joint Dispatch (JDA) savings Quarterly Savings Results Guaranteed 687 million in fuel and joint M M 50 300 dispatch savings to Carolinas…
Edwardsport IGCC plant operational status on track Operational Status IGCC Rider Proceeding Next Steps Plant began commercial operations in Tracker Costs Thru Filed Hearing June 2013 IGCC-11 Mar. 2013 May 2013 Complete; awaiting…
Planned exit from Midwest generation In February, announced process to exit Estimated Timeline merchant generation business in the Midwest 2014 2015 Exit reduces business risk of Duke Energy Complete asset transfer DE Ohio becomes…
International: Strong results despite low rainfall in Brazil Brazilian hydro conditions International owns and operates Reservoir levels at the end of April 2014 were below 4,600 MW of net generation normal; 39% versus 62% in April…
Potential growth investments of 16-20B from 2014-2018 New Generation Infrastructure Compliance Received CPCN for W.S. Lee Announced Natural Gas EPA regulations, including CCGT in SC Pipeline solicitation with existing and…
1Q-2014 earnings summary and key drivers Adjusted diluted EPS 1Q-2014 Key adjusted segment income drivers (2) REGULATED UTILITIES (+81 million) +0.11 Increased pricing and riders +0.12 Favorable weather +0.08 Increased…
Regulated Utilities weather-normal volume trends 1Q 2014 weather-normalized load growth was above full-year expectation of 0.5% Regulated Utilities weather-normal volume changes Residential: usage per customer improved to Residential…
Financial objectives for 2014 and beyond Achieve Grow 2014 EPS guidance EPS 4 - 6% 4.45 - 4.60 (1) through 2016 (1)(2) Grow Maintain strong dividend at 65 - 70% credit ratings and target payout (1) balance sheet (1) Based on…
Update on Key 2014 Assumptions 17 First Quarter 2014 Earnings Review and Business Update
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…
Update on key 2014 earnings guidance assumptions ( in millions) 2014 2014 YTD assumptions (thru 3/31/14) Adjusted segment income (expense) (1): Regulated Utilities 2,855 737 International Energy 430 130 Commercial Power 130 10…
5 to 6 billion of environmental compliance costs through 2023 Anticipate 5-6 billion in Carolinas (1) 2014 2016 2017 2023 compliance costs for approved Mercury Controls/Sorbent Injection or pending air, water and waste Response to…
1Q 2014 Earnings Supplement 21 First Quarter 2014 Earnings Review and Business Update
Regulated Utilities normalized volume trends, by jurisdiction Q1 2014 Rolling 12-month Volume Trends Duke Energy Duke Energy Duke Energy Duke Energy Duke Energy Regulated Carolinas Progress Florida Indiana Ohio/Kentucky Utilities…
Regulated Utilities quarterly weather impacts Weather segment 2014 2013 income to normal: Pretax impact Weighted avg. EPS impact Pretax impact Weighted avg. EPS impact ( in millions) diluted shares favorable / ( in millions) diluted…
Wholesale sales growth provides earnings support 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…
Edwardsport IGCC rider summary Six-Month Revenue Tracker Costs Thru (1) Filed Approved Requirement IGCC-1 Feb. 2008 May 2008 Jan. 2009 8 million IGCC-2 Sept. 2008 Nov. 2008 May 2009 17 million IGCC-3 Mar. 2009 May 2009 Dec. 2009 27…
Environmental Overview 27 First Quarter 2014 Earnings Review and Business Update
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 EPA published final rule on…
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…
Pending EPA regulations will impact U.S. generation Major regulations Duke Energy domestic generation (as of 3/31/14) Considerations for EPA Coal Combustion Coal generation profile Transition period must Residuals Rule TODAY POST…
Positioning our coal fleet for EPA regulations Coal generation profile as of 3/31/14 Plans for coal generation without controls Duke Carolinas 4.3 GW 2.5 GW 0.4 Lee 1&2 200 MW potential to be retired by 2015 7.2 GW GW Lee 3 170 MW…
Duke Energy steam facility data (As of 3/31/14) Owned capacity Current cooling Ash Handling Structure Operating state Jurisdiction Steam unit facility summer rating (MW) Fuel type method Air Emissions controls (flyash; bottom ash) (3)…
Duke Energy steam facility data, cont. (As of 3/31/14) Owned capacity Ash Handling Structure Operating state Jurisdiction Steam unit facility summer rating (MW) Fuel type Current cooling method Air Emissions controls (flyash; bottom…
Coal Ash Supplement 34 First Quarter 2014 Earnings Review and Business Update
Ash Basins: Coal ash background Facts About Coal Ash Destinations of Coal Ash in the US According to the U.S. Energy Information Administration, about 37 percent of all Mines electricity generated in the United States 8% comes from…
Immediate actions following Dan River coal ash accident 1. Formed dedicated internal task Site Baseline coal ash basin plan in NC (1) Timing Cost (est.) force to address near and long-term Dan River Dewater, close and excavate to…
North Carolina coal ash plan cost estimate comparisons (1)(2) The comprehensive, long-term closure strategy to be developed for remaining sites by the end of 2014 will be a site-specific, fact-based approach. B Movement to full…
Terms and Background Fly ash A fine material similar to the consistency of talcum powder. Fly ash accounts for about 78 percent of the coal ash generated annually in the United States. When many early coal plants were built, fly ash was…
Ash Basins: Notice of Violations in the Carolinas Site NOV Dukes NOV Cited Violation Dukes Response Summary Next Steps Issuance Response Dan River 2/28/2014 3/13/14 Notice of unlawful discharge and Duke Energy was operating in full…
Ash Basins: Dedicated company website Visit: www.duke-energy.com/ash-management for up-to-date information 40 First Quarter 2014 Earnings Review and Business Update
Additional Financial Information 41 First Quarter 2014 Earnings Review and Business Update
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 4% Utilities Long-term load…
Established track record of dividend growth DUK annual dividend per share (1) Supported by strong regulated earnings 88-year history of quarterly cash dividends Increased quarterly dividend 0.015 to 0.78/share in 2013 Target…
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…
Progress on 2014 financing plan (as of May 7th 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 Florida Ohio Carolinas…
Access to capital Recent 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…
Liquidity summary (as of March 31, 2014) ( in millions) Duke Duke Duke Duke Duke Duke Duke Energy Carolinas Progress Florida Indiana Ohio Kentucky Total Master Credit Facility (1) 2,250 1,000 750 650 700 550 100 6,000 Less: Notes…
Credit ratings (as of May 7, 2014) Holding companies Operating companies Fitch Moody's S&P Fitch Moody's S&P DUKE ENERGY Stable Stable Stable DUKE ENERGY CAROLINAS Stable Stable Stable Senior Unsecured Debt BBB+ A3 BBB Senior Secured…
Upcoming events Event Date 2Q 2014 earnings call (tentative) August 7, 2014 3Q 2014 earnings call (tentative) November 5, 2014 49 First Quarter 2014 Earnings Review and Business Update
For additional information on Duke Energy, please visit: www.duke-energy.com/investors
Duke Energy Corporation Non-GAAP Reconciliations First Quarter Earnings Review & Business Update May 7, 2014 Adjusted Diluted Earnings per Share (EPS) The materials for Duke Energy Corporations (Duke Energy) First Quarter Earnings…
the impact of special items and the mark-to-market impacts of economic hedges in the Commercial Power segment. Due to the forward-looking nature of this non-GAAP financial measure for future periods, information to reconcile it to the…
most directly comparable GAAP financial measure is not available at this time, as management is unable to project all special items or mark-to-market adjustments for future periods. Adjusted Earnings, Pre-Tax Income* 1,253 Midwest…
DUKE ENERGY CORPORATION ADJUSTED TO REPORTED EARNINGS RECONCILIATION Three Months Ended March 31, 2014 (Dollars in millions, except per-share amounts) Special Items Costs to Economic Achieve, Midwest Hedges Adjusted Progress…
DUKE ENERGY CORPORATION ADJUSTED TO REPORTED EARNINGS RECONCILIATION Three Months Ended March 31, 2013 (Dollars in millions, except per-share amounts) Special Items Costs to Achieve, Economic Adjusted Progress Hedges (Mark- Total…
Duke Energy Corporation Available Liquidity Reconciliation As of March 31, 2014 (In millions) Cash and Cash Equivalents 1,531 Short-Term Investments 6 Subtotal 1,537 Less: Amounts Held in Foreign Jurisdictions (1,206) Less:…
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