Duke Energy held an earnings conference call to discuss its first quarter 2005 results. The call included prepared remarks from Duke Energy's Chairman and CEO, Group VP and CFO, and President and COO. They reported earnings of $0.91 per share including special items, and ongoing earnings of $0.44 per share, up nearly 30% from the prior year. Business unit highlights included strong results from Field Services, International Energy, and Crescent Resources. DENA reported a smaller loss than the prior year. The executives provided an outlook for the remainder of 2005 and discussed the impact of recent transactions involving Duke Energy's ownership in Field Services.
Duke Energy 02/02/05_prepared_remarks_and_qafinance21
This document provides a summary of Duke Energy Corporation's Q4 2004 earnings conference call. Key points include:
- Duke Energy reported 2004 EPS of $1.59, including special items, and ongoing EPS of $1.38, exceeding its $1.20 target.
- Business units like Field Services and Crescent Resources had strong years. Field Services benefited from higher commodity prices.
- For Q4 2004, Duke Energy reported EPS of $0.38 including special items. Ongoing segment EBIT increased at Franchised Electric and Natural Gas Transmission.
- Guidance for 2005 includes a $150M loss for DENA and $350-500M EBIT for Field Services depending
Duke Energy held a conference call to discuss its second quarter 2005 earnings. The call included prepared remarks from Chairman and CEO Paul Anderson and Group VP and CFO David Hauser. Key highlights from their remarks include:
- Earnings per share were $0.33, including $0.02 in special items, compared to analyst expectations of $0.38. However, the company was on plan for the year.
- Weather had a negative $0.05 impact on earnings compared to last year. Results were also impacted by higher O&M costs.
- Most business units performed well, though Franchised Electric and DENA saw declines due to weather and other factors.
- The proposed merger with C
This document contains the prepared remarks and Q&A from Duke Energy Corporation's earnings conference call for Q2 2004.
The key points are:
1) Duke Energy reported earnings per share of $0.46 for Q2 2004, which included $0.04 per share in special items. Ongoing earnings were $0.42 per share.
2) The company's largest business segments - Franchised Electric and Gas Transmission - generated solid earnings and cash flows for the quarter. Field Services also had strong results due to high natural gas liquid prices and operating improvements.
3) Duke Energy reduced its mark-to-market trading position, but results were still affected by changing commodity prices
Duke Energy 4Q/03_Transcript_and_QA_-Finalfinance21
Duke Energy held an earnings call to discuss its financial results for Q4 2003 and the full year. The company reported a net loss of $1.48 per share for 2003, which included $2.76 in special items. Most business segments met their targets except for Franchised Electric, which saw lower earnings due to higher costs. Duke Energy's largest loss was primarily driven by asset impairments and other special charges related to its DENA business. Management provided additional details on special items to help analysts understand the company's ongoing earnings performance excluding these one-time charges.
Duke Energy held its Q2 2003 earnings conference call on July 30, 2003. Fred Fowler, President and COO, reported that Duke Energy has made strong progress in the first half of 2003 through an asset sales program that generated over $1.5 billion, reducing capital spending to $3 billion, and lowering net debt by approximately $1.8 billion for the year. Duke Energy reported Q2 earnings of 46 cents per share including 16 cents from asset sales. For the first half of 2003, Duke Energy reported earnings of 71 cents per share including gains from asset sales and an accounting charge, with benefits from Westcoast earnings and expansion projects offset by lower DENA earnings and higher interest expenses.
Duke Energy reported third quarter earnings per share of $0.41, which included $0.03 from special items primarily related to additional tax benefits from asset sales. Ongoing earnings were $0.38 per share. Key business segments like Franchised Electric and Natural Gas Transmission reported solid results. Field Services benefited from strong natural gas liquid prices. Duke Energy North America continued working to reduce losses from its merchant energy business. The company has reduced its debt by $2.4 billion year-to-date through asset sales and cash flows. Management expects to meet or exceed its financial goals for 2004 and continues working to improve the company's performance.
This document contains the prepared remarks and Q&A from Duke Energy's third quarter 2003 earnings conference call on October 30, 2003. Rick Priory, then-CEO of Duke Energy, noted that third quarter results were below expectations due to challenges faced by the DENA business segment. Duke Energy reported GAAP earnings of $0.05 per share and ongoing earnings of $0.35 per share for the quarter, excluding special items. Priory discussed cost reduction efforts that would yield over $200 million in annual pre-tax savings. CFO Robert Brace provided additional details on segment results and $0.30 per share in special items recorded in the quarter.
This document contains the prepared remarks from Duke Energy's Q1 2004 earnings conference call. The key points are:
1) Duke Energy reported earnings of 36 cents per share including special items, and ongoing earnings of 32 cents, which met expectations despite $6 cents of MTM losses during the quarter.
2) Several business segments performed well, including franchised electric and gas transmission. Field services benefited from higher frac spreads and hedging gains.
3) Challenges included a disappointing quarter for DENA due to inability to capture optionality. However, DENA expects to realize its full-year budget.
4) Duke Energy continues reducing debt and increasing cash, made progress on legal issues,
Duke Energy 02/02/05_prepared_remarks_and_qafinance21
This document provides a summary of Duke Energy Corporation's Q4 2004 earnings conference call. Key points include:
- Duke Energy reported 2004 EPS of $1.59, including special items, and ongoing EPS of $1.38, exceeding its $1.20 target.
- Business units like Field Services and Crescent Resources had strong years. Field Services benefited from higher commodity prices.
- For Q4 2004, Duke Energy reported EPS of $0.38 including special items. Ongoing segment EBIT increased at Franchised Electric and Natural Gas Transmission.
- Guidance for 2005 includes a $150M loss for DENA and $350-500M EBIT for Field Services depending
Duke Energy held a conference call to discuss its second quarter 2005 earnings. The call included prepared remarks from Chairman and CEO Paul Anderson and Group VP and CFO David Hauser. Key highlights from their remarks include:
- Earnings per share were $0.33, including $0.02 in special items, compared to analyst expectations of $0.38. However, the company was on plan for the year.
- Weather had a negative $0.05 impact on earnings compared to last year. Results were also impacted by higher O&M costs.
- Most business units performed well, though Franchised Electric and DENA saw declines due to weather and other factors.
- The proposed merger with C
This document contains the prepared remarks and Q&A from Duke Energy Corporation's earnings conference call for Q2 2004.
The key points are:
1) Duke Energy reported earnings per share of $0.46 for Q2 2004, which included $0.04 per share in special items. Ongoing earnings were $0.42 per share.
2) The company's largest business segments - Franchised Electric and Gas Transmission - generated solid earnings and cash flows for the quarter. Field Services also had strong results due to high natural gas liquid prices and operating improvements.
3) Duke Energy reduced its mark-to-market trading position, but results were still affected by changing commodity prices
Duke Energy 4Q/03_Transcript_and_QA_-Finalfinance21
Duke Energy held an earnings call to discuss its financial results for Q4 2003 and the full year. The company reported a net loss of $1.48 per share for 2003, which included $2.76 in special items. Most business segments met their targets except for Franchised Electric, which saw lower earnings due to higher costs. Duke Energy's largest loss was primarily driven by asset impairments and other special charges related to its DENA business. Management provided additional details on special items to help analysts understand the company's ongoing earnings performance excluding these one-time charges.
Duke Energy held its Q2 2003 earnings conference call on July 30, 2003. Fred Fowler, President and COO, reported that Duke Energy has made strong progress in the first half of 2003 through an asset sales program that generated over $1.5 billion, reducing capital spending to $3 billion, and lowering net debt by approximately $1.8 billion for the year. Duke Energy reported Q2 earnings of 46 cents per share including 16 cents from asset sales. For the first half of 2003, Duke Energy reported earnings of 71 cents per share including gains from asset sales and an accounting charge, with benefits from Westcoast earnings and expansion projects offset by lower DENA earnings and higher interest expenses.
Duke Energy reported third quarter earnings per share of $0.41, which included $0.03 from special items primarily related to additional tax benefits from asset sales. Ongoing earnings were $0.38 per share. Key business segments like Franchised Electric and Natural Gas Transmission reported solid results. Field Services benefited from strong natural gas liquid prices. Duke Energy North America continued working to reduce losses from its merchant energy business. The company has reduced its debt by $2.4 billion year-to-date through asset sales and cash flows. Management expects to meet or exceed its financial goals for 2004 and continues working to improve the company's performance.
This document contains the prepared remarks and Q&A from Duke Energy's third quarter 2003 earnings conference call on October 30, 2003. Rick Priory, then-CEO of Duke Energy, noted that third quarter results were below expectations due to challenges faced by the DENA business segment. Duke Energy reported GAAP earnings of $0.05 per share and ongoing earnings of $0.35 per share for the quarter, excluding special items. Priory discussed cost reduction efforts that would yield over $200 million in annual pre-tax savings. CFO Robert Brace provided additional details on segment results and $0.30 per share in special items recorded in the quarter.
This document contains the prepared remarks from Duke Energy's Q1 2004 earnings conference call. The key points are:
1) Duke Energy reported earnings of 36 cents per share including special items, and ongoing earnings of 32 cents, which met expectations despite $6 cents of MTM losses during the quarter.
2) Several business segments performed well, including franchised electric and gas transmission. Field services benefited from higher frac spreads and hedging gains.
3) Challenges included a disappointing quarter for DENA due to inability to capture optionality. However, DENA expects to realize its full-year budget.
4) Duke Energy continues reducing debt and increasing cash, made progress on legal issues,
NiSource Inc. is a utility company focused on natural gas and electric utilities. It has over 3 million customers across 9 states. In 2002, NiSource focused on strengthening its balance sheet by reducing debt, streamlining operations, and shedding non-core assets. It raised $735 million through an equity offering, using the funds to further pay down debt. NiSource maintained investment-grade credit ratings while improving transparency and adhering to new governance standards. It focused on efficiently operating its regulated gas and electric utilities to serve customers in a high-demand region from Indiana to New England.
The document is the transcript of Duke Energy's Q1 2003 earnings conference call.
In the call, Duke Energy executives discuss the company's financial results and progress on its strategic plan. They report that regulated utilities Franchised Electric and Gas Transmission contributed 94% of earnings. Duke is reducing costs, selling $1.1 billion in assets, and focusing on its strongest businesses. While merchant energy faced challenges, Duke is restructuring to improve results going forward.
WellPoint provided guidance for its 2004 and 2005 earnings. For 2004, WellPoint expected earnings per share of approximately $6.07, which includes expenses related to repurchasing surplus notes and merger undertakings. For the fourth quarter of 2004 specifically, WellPoint expected earnings per share of about 90 cents, lower than previous guidance due to repurchasing more surplus notes than anticipated. For 2005, WellPoint did not provide specific earnings per share guidance but said it expected earnings growth over 2004 levels driven by synergies from the merger.
This document provides an overview and summary of a financial conference held by Edison Electric Institute on November 8, 2005. It includes introductory remarks regarding forward-looking statements and safe harbor provisions. The document then summarizes Dick Kelly's presentation on EPS growth targets, dividend increases, and credit rating objectives for 2005-2009. It also provides highlights on rate case filings, capital expenditure forecasts, potential regulatory net income, and earnings guidance ranges.
The document provides details on Pepco Holdings' 2003 performance and future plans. It discusses challenges faced in 2003 including an energy trading loss, Mirant's bankruptcy, and Hurricane Isabel. However, actions taken in 2003 such as divesting non-core businesses and reducing risk are expected to set the stage for future earnings growth. The company remains focused on strengthening its core power delivery business and improving customer satisfaction.
Progressive Corporation announced its December 2007 results. Net premiums written decreased 1% to $910.1 million compared to December 2006. Net income decreased 51% to $67.6 million compared to December 2006. The combined ratio was 95.8% compared to 86.6% in December 2006. Progressive also reported results for the full year 2007, with net premiums written decreasing 3% to $13.77 billion compared to 2006. Net income decreased 28% to $1.18 billion compared to 2006. The combined ratio for 2007 was 95% compared to 87.7% in 2006.
The annual report summarizes Perini Corporation's financial results for 2005. It highlights that revenues decreased 6% to $1.73 billion due to timing shifts on some projects, but pre-tax income was impacted by a $24.9 million legal charge. Two acquisitions expanded Perini's presence and its backlog reached a record $7.9 billion due to major new project wins in gaming and hospitality. Looking ahead, the company expects continued growth from its building segment and improved margins and earnings from its civil and management service segments.
- Viacom reported financial results for Q4 and full year 2008, with revenues of $4.2 billion for Q4 and $14.6 billion for the full year.
- Operating income declined 51% in Q4 and 14% for the full year due to $454 million in restructuring charges.
- Adjusted results exclude these restructuring charges and provide a better view of underlying performance, with adjusted operating income declining 6% in Q4 and 1% for the full year.
- The company generated $1.4 billion in free cash flow in Q4 and $1.7 billion for the full year, helped by working capital changes.
This document provides an overview of Xcel Energy Inc. for investors attending the EEI International Financial Conference. It summarizes Xcel's business segments, strengths, investment merits, capital investment plans, power supply, environmental commitments, and financial performance. Projections for 2004 earnings per share and cash flow are also presented. Key points include Xcel being the 4th largest US electric and gas utility, a growing service area, low rates, and a goal of providing competitive total returns of 7-9% to shareholders.
1. CDP collects information on corporate climate change and water scarcity practices on behalf of investors and purchasers, pioneering the only global system that does so.
2. CDP accelerates climate action through disclosure and its Carbon Action program, engaging 205 Global 500 companies to set emissions reduction targets with 61 companies setting targets so far.
3. CDP is evolving to respond to market needs, including merging with the Forest Footprint Disclosure Project over the next two years to enable assessment of companies' and investors' exposure to forests and related climate and water issues.
This document summarizes Xcel Energy's presentation at the Banc of America Securities Energy & Power Conference on November 17-19, 2003. It discusses Xcel Energy's accomplishments in 2003, objectives for investment, earnings growth, and credit ratings improvement. It also provides guidance on projected 2003 and 2004 earnings, cash flows, utility investments, and the expected timeline for NRG's emergence from bankruptcy.
This document provides an overview of Xcel Energy from their presentation at the Edison Electric Institute Financial Conference in October 2003. Key points include Xcel achieving several accomplishments in 2003 including settling with NRG creditors, maintaining investment grade ratings, and refinancing debt. Projections for 2004 include earnings of $1.15-1.25 per share assuming NRG emerges from bankruptcy. The presentation outlines Xcel's objectives, investments, regulatory strategy, and earnings drivers to emphasize the company as a low-risk, integrated utility with a total return of 7-8%.
Enseco is a premier supplier of directional drilling and production testing services operating in North American resource plays. It has an experienced management team and focuses on growth through increasing utilizations, margins, and its USA operations. Enseco provides directional drilling and production testing services with in-house technology and industry leading experience. It operates across Canada and the USA with a focus on oil and gas production. Enseco emphasizes safety and has improved its safety statistics and adopted a total loss management system.
This document contains the prepared remarks and Q&A from Duke Energy's third quarter 2005 earnings conference call on November 2, 2005. The call covered Duke Energy's financial results for the third quarter of 2005, including segment results for franchised electric, natural gas transmission, field services, international energy, and Crescent resources. It also provided updates on Duke Energy's plans to exit its DENA business and its proposed merger with Cinergy. Key executives discussed drivers of earnings growth or declines across business segments and provided earnings guidance for the remainder of 2005.
The document is the transcript from Duke Energy Corporation's Q4 2005 earnings conference call and outlook for 2006. It includes an introduction by Julie Dill, VP of Investor Relations. Paul Anderson, Chairman and CEO, provides an overview of Duke Energy's 2005 results and progress on the merger with Cinergy. Fred Fowler, President and COO, then reviews the outlook and earnings expectations for each of Duke Energy's business units for 2006.
The document reviews Duke Energy's 2005 financial results, provides an outlook for 2006 earnings per share of $1.90, and details expected 2006 capital expenditures of $4.325 billion as the company integrates Cinergy operations following their planned merger. Key assumptions for 2006 include normal weather, sales growth, and $140 million in annual merger savings beginning in mid-2006.
This document summarizes a New York investor meeting held by Xcel Energy on November 29, 2005. The presentation outlines Xcel's strategy of investing in regulated utility assets to earn its allowed rate of return and achieve earnings growth targets. It highlights Xcel's financial performance objectives and discusses its investments in infrastructure, environmental stewardship, and supportive regulatory treatment across its utility territories. The presentation also reviews Xcel's operational focus and organizational structure.
This document summarizes a New York investor meeting held by Xcel Energy on November 29, 2005. The presentation outlines Xcel's strategy of investing in regulated utility assets to earn the allowed rate of return and deliver earnings per share growth of 5-7% annually. It highlights Xcel's environmental stewardship through renewable energy initiatives and discusses regulatory support for major projects. The organizational structure and roles of key executives are also summarized.
This document summarizes a New York investor meeting held by Xcel Energy on November 29, 2005. The presentation outlines Xcel's strategy of investing in regulated utility assets to earn its allowed rate of return and achieve earnings growth targets. It highlights Xcel's financial performance objectives and discusses its investments in transmission, distribution and customer service. The presentation also provides details on Xcel's construction program, environmental stewardship initiatives, and supportive regulatory treatment across its utility territories.
The document summarizes a quarterly earnings call by WellPoint, Inc. discussing their financial results for Q4 2004. Key details include:
- WellPoint reported GAAP net income of 92 cents per share, exceeding guidance of 90 cents.
- Operating revenue reached a record high of $6.7 billion in Q4, up 59% year-over-year due to the merger and organic growth.
- Total medical membership grew by 1.7 million in 2004 to over 27.7 million, with growth across all regions.
- WellPoint has introduced new lower-cost health plans and products to attract more uninsured individuals.
This document summarizes Duke Energy's and Cinergy's first quarter 2006 earnings conference call. David Hauser, Duke Energy's CFO, discussed the financial results of both companies. For Duke Energy, earnings per share were $0.48, up from the prior year. Segment EBIT increased across most business units due to factors like customer and volume growth. For Cinergy, ongoing earnings per share were $0.62, up slightly from the prior year, while reported earnings were $0.39 due to merger costs. Hauser provided an overview of key financial metrics and outlook for both companies.
This document contains the prepared remarks and Q&A from Duke Energy Corporation's earnings conference call for the second quarter of 2006. Key points:
- Duke Energy reported ongoing EPS of $0.43 compared to consensus of $0.38.
- Financial results were impacted by mild weather, lower bulk power sales, and purchase accounting charges from the Cinergy merger.
- The company achieved several strategic objectives in the quarter including closing the Cinergy merger early and announcing the sale of the Commercial Marketing and Trading business.
- While some business units are performing ahead of plan, overall the company is on track to achieve its $1.90 EPS target for 2006.
NiSource Inc. is a utility company focused on natural gas and electric utilities. It has over 3 million customers across 9 states. In 2002, NiSource focused on strengthening its balance sheet by reducing debt, streamlining operations, and shedding non-core assets. It raised $735 million through an equity offering, using the funds to further pay down debt. NiSource maintained investment-grade credit ratings while improving transparency and adhering to new governance standards. It focused on efficiently operating its regulated gas and electric utilities to serve customers in a high-demand region from Indiana to New England.
The document is the transcript of Duke Energy's Q1 2003 earnings conference call.
In the call, Duke Energy executives discuss the company's financial results and progress on its strategic plan. They report that regulated utilities Franchised Electric and Gas Transmission contributed 94% of earnings. Duke is reducing costs, selling $1.1 billion in assets, and focusing on its strongest businesses. While merchant energy faced challenges, Duke is restructuring to improve results going forward.
WellPoint provided guidance for its 2004 and 2005 earnings. For 2004, WellPoint expected earnings per share of approximately $6.07, which includes expenses related to repurchasing surplus notes and merger undertakings. For the fourth quarter of 2004 specifically, WellPoint expected earnings per share of about 90 cents, lower than previous guidance due to repurchasing more surplus notes than anticipated. For 2005, WellPoint did not provide specific earnings per share guidance but said it expected earnings growth over 2004 levels driven by synergies from the merger.
This document provides an overview and summary of a financial conference held by Edison Electric Institute on November 8, 2005. It includes introductory remarks regarding forward-looking statements and safe harbor provisions. The document then summarizes Dick Kelly's presentation on EPS growth targets, dividend increases, and credit rating objectives for 2005-2009. It also provides highlights on rate case filings, capital expenditure forecasts, potential regulatory net income, and earnings guidance ranges.
The document provides details on Pepco Holdings' 2003 performance and future plans. It discusses challenges faced in 2003 including an energy trading loss, Mirant's bankruptcy, and Hurricane Isabel. However, actions taken in 2003 such as divesting non-core businesses and reducing risk are expected to set the stage for future earnings growth. The company remains focused on strengthening its core power delivery business and improving customer satisfaction.
Progressive Corporation announced its December 2007 results. Net premiums written decreased 1% to $910.1 million compared to December 2006. Net income decreased 51% to $67.6 million compared to December 2006. The combined ratio was 95.8% compared to 86.6% in December 2006. Progressive also reported results for the full year 2007, with net premiums written decreasing 3% to $13.77 billion compared to 2006. Net income decreased 28% to $1.18 billion compared to 2006. The combined ratio for 2007 was 95% compared to 87.7% in 2006.
The annual report summarizes Perini Corporation's financial results for 2005. It highlights that revenues decreased 6% to $1.73 billion due to timing shifts on some projects, but pre-tax income was impacted by a $24.9 million legal charge. Two acquisitions expanded Perini's presence and its backlog reached a record $7.9 billion due to major new project wins in gaming and hospitality. Looking ahead, the company expects continued growth from its building segment and improved margins and earnings from its civil and management service segments.
- Viacom reported financial results for Q4 and full year 2008, with revenues of $4.2 billion for Q4 and $14.6 billion for the full year.
- Operating income declined 51% in Q4 and 14% for the full year due to $454 million in restructuring charges.
- Adjusted results exclude these restructuring charges and provide a better view of underlying performance, with adjusted operating income declining 6% in Q4 and 1% for the full year.
- The company generated $1.4 billion in free cash flow in Q4 and $1.7 billion for the full year, helped by working capital changes.
This document provides an overview of Xcel Energy Inc. for investors attending the EEI International Financial Conference. It summarizes Xcel's business segments, strengths, investment merits, capital investment plans, power supply, environmental commitments, and financial performance. Projections for 2004 earnings per share and cash flow are also presented. Key points include Xcel being the 4th largest US electric and gas utility, a growing service area, low rates, and a goal of providing competitive total returns of 7-9% to shareholders.
1. CDP collects information on corporate climate change and water scarcity practices on behalf of investors and purchasers, pioneering the only global system that does so.
2. CDP accelerates climate action through disclosure and its Carbon Action program, engaging 205 Global 500 companies to set emissions reduction targets with 61 companies setting targets so far.
3. CDP is evolving to respond to market needs, including merging with the Forest Footprint Disclosure Project over the next two years to enable assessment of companies' and investors' exposure to forests and related climate and water issues.
This document summarizes Xcel Energy's presentation at the Banc of America Securities Energy & Power Conference on November 17-19, 2003. It discusses Xcel Energy's accomplishments in 2003, objectives for investment, earnings growth, and credit ratings improvement. It also provides guidance on projected 2003 and 2004 earnings, cash flows, utility investments, and the expected timeline for NRG's emergence from bankruptcy.
This document provides an overview of Xcel Energy from their presentation at the Edison Electric Institute Financial Conference in October 2003. Key points include Xcel achieving several accomplishments in 2003 including settling with NRG creditors, maintaining investment grade ratings, and refinancing debt. Projections for 2004 include earnings of $1.15-1.25 per share assuming NRG emerges from bankruptcy. The presentation outlines Xcel's objectives, investments, regulatory strategy, and earnings drivers to emphasize the company as a low-risk, integrated utility with a total return of 7-8%.
Enseco is a premier supplier of directional drilling and production testing services operating in North American resource plays. It has an experienced management team and focuses on growth through increasing utilizations, margins, and its USA operations. Enseco provides directional drilling and production testing services with in-house technology and industry leading experience. It operates across Canada and the USA with a focus on oil and gas production. Enseco emphasizes safety and has improved its safety statistics and adopted a total loss management system.
This document contains the prepared remarks and Q&A from Duke Energy's third quarter 2005 earnings conference call on November 2, 2005. The call covered Duke Energy's financial results for the third quarter of 2005, including segment results for franchised electric, natural gas transmission, field services, international energy, and Crescent resources. It also provided updates on Duke Energy's plans to exit its DENA business and its proposed merger with Cinergy. Key executives discussed drivers of earnings growth or declines across business segments and provided earnings guidance for the remainder of 2005.
The document is the transcript from Duke Energy Corporation's Q4 2005 earnings conference call and outlook for 2006. It includes an introduction by Julie Dill, VP of Investor Relations. Paul Anderson, Chairman and CEO, provides an overview of Duke Energy's 2005 results and progress on the merger with Cinergy. Fred Fowler, President and COO, then reviews the outlook and earnings expectations for each of Duke Energy's business units for 2006.
The document reviews Duke Energy's 2005 financial results, provides an outlook for 2006 earnings per share of $1.90, and details expected 2006 capital expenditures of $4.325 billion as the company integrates Cinergy operations following their planned merger. Key assumptions for 2006 include normal weather, sales growth, and $140 million in annual merger savings beginning in mid-2006.
This document summarizes a New York investor meeting held by Xcel Energy on November 29, 2005. The presentation outlines Xcel's strategy of investing in regulated utility assets to earn its allowed rate of return and achieve earnings growth targets. It highlights Xcel's financial performance objectives and discusses its investments in infrastructure, environmental stewardship, and supportive regulatory treatment across its utility territories. The presentation also reviews Xcel's operational focus and organizational structure.
This document summarizes a New York investor meeting held by Xcel Energy on November 29, 2005. The presentation outlines Xcel's strategy of investing in regulated utility assets to earn the allowed rate of return and deliver earnings per share growth of 5-7% annually. It highlights Xcel's environmental stewardship through renewable energy initiatives and discusses regulatory support for major projects. The organizational structure and roles of key executives are also summarized.
This document summarizes a New York investor meeting held by Xcel Energy on November 29, 2005. The presentation outlines Xcel's strategy of investing in regulated utility assets to earn its allowed rate of return and achieve earnings growth targets. It highlights Xcel's financial performance objectives and discusses its investments in transmission, distribution and customer service. The presentation also provides details on Xcel's construction program, environmental stewardship initiatives, and supportive regulatory treatment across its utility territories.
The document summarizes a quarterly earnings call by WellPoint, Inc. discussing their financial results for Q4 2004. Key details include:
- WellPoint reported GAAP net income of 92 cents per share, exceeding guidance of 90 cents.
- Operating revenue reached a record high of $6.7 billion in Q4, up 59% year-over-year due to the merger and organic growth.
- Total medical membership grew by 1.7 million in 2004 to over 27.7 million, with growth across all regions.
- WellPoint has introduced new lower-cost health plans and products to attract more uninsured individuals.
This document summarizes Duke Energy's and Cinergy's first quarter 2006 earnings conference call. David Hauser, Duke Energy's CFO, discussed the financial results of both companies. For Duke Energy, earnings per share were $0.48, up from the prior year. Segment EBIT increased across most business units due to factors like customer and volume growth. For Cinergy, ongoing earnings per share were $0.62, up slightly from the prior year, while reported earnings were $0.39 due to merger costs. Hauser provided an overview of key financial metrics and outlook for both companies.
This document contains the prepared remarks and Q&A from Duke Energy Corporation's earnings conference call for the second quarter of 2006. Key points:
- Duke Energy reported ongoing EPS of $0.43 compared to consensus of $0.38.
- Financial results were impacted by mild weather, lower bulk power sales, and purchase accounting charges from the Cinergy merger.
- The company achieved several strategic objectives in the quarter including closing the Cinergy merger early and announcing the sale of the Commercial Marketing and Trading business.
- While some business units are performing ahead of plan, overall the company is on track to achieve its $1.90 EPS target for 2006.
At the analyst meeting in New York City on December 6, 2007, FirstEnergy provided regulatory updates for its utilities. In Ohio, distribution rate cases were filed requesting a $332 million increase and hearings are expected in Q1 2008. A competitive generation procurement proposal was also filed to transition to market prices by 2009. In Pennsylvania, appeals of Met-Ed and Penelec rate cases are pending in Commonwealth Court. Penn Power successfully transitioned to market prices in its POLR II case. New Jersey is implementing an Energy Master Plan to reduce demand 20% by 2020 and increase renewable energy.
The document is a transcript from Duke Energy's first quarter 2007 earnings conference call.
- Duke Energy reported first quarter 2007 ongoing diluted EPS of $0.30, up from $0.21 in the prior year quarter. Results exceeded internal plans.
- Key drivers included the addition of Cinergy's regulated Midwest assets, improved results at Duke Energy International, and continued strong performance from core regulated businesses.
- Segment results were positively impacted by customer growth, favorable weather, a DOE settlement, and synergies from the Cinergy merger, partially offset by rate reductions related to merger approval requirements.
public serviceenterprise group analystday pres0307finance20
PSEG presented an overview of its strategic positioning and outlook for 2007 and beyond. Key points include:
- PSEG's businesses of PSE&G, PSEG Power, and PSEG Energy Holdings provide opportunities for growth in their respective markets through operational excellence and financial discipline.
- PSE&G is positioned for growth through its strong operational performance, constructive regulatory environment, and opportunities from New Jersey's energy policy initiatives.
- PSEG Power is well positioned to provide strong growth through its nuclear and fossil fleet performance and growth opportunities in tight capacity markets and from environmental policies.
- PSEG Energy Holdings aims to improve returns and reduce risk through its diverse international and Texas assets while creating opportunities to
public serviceenterprise group analystday pres0307finance20
PSEG presented an overview of its strategic position and outlook for 2007 and beyond. Key points include:
- PSEG's businesses of PSE&G, PSEG Power, and PSEG Energy Holdings provide opportunities for growth in their respective markets through operational excellence and financial discipline.
- PSE&G is positioned for growth through its strong operational performance, constructive regulatory environment, and opportunities from New Jersey's energy policy initiatives.
- PSEG Power is well positioned to provide strong growth through its nuclear and fossil fleet performance and growth opportunities in tight capacity markets and from environmental policies.
- PSEG Energy Holdings aims to improve returns and reduce risk from its diverse international and Texas assets while providing opportunities to
Fidelity National Information Services held an investor day on May 28, 2008 to discuss strategic initiatives and the planned spin-off of its Lender Processing Services segment. The presentation discussed the rationale for separating LPS, including that they have distinct businesses, limited ability to leverage each other, and competing investment needs. A timeline for the spin-off was also presented, with an estimated effective date of July 1.
NiSource Inc. delivered strong financial results in 2003, with income from continuing operations of $1.64 per share. It strengthened its balance sheet by selling non-core assets and reducing debt. The company adopted a new organizational structure to focus on its core regulated utility businesses. NiSource aims to continue improving operations, pursuing growth opportunities, and operating responsibly in the communities it serves.
This document provides an agenda and overview for an investor presentation by El Paso Corporation. It discusses El Paso's strategy to spin off its Exploration and Production segment into a separate publicly traded company by the end of 2011. The presentation will highlight how El Paso has transformed its business over the past several years to position itself for long-term success and value creation. Key points include restoring financial strength, developing a top-tier pipeline franchise and E&P business, and adding a new midstream segment. The spin-off is aimed at allowing each business to create more value as independent entities.
Duke Energy held an earnings conference call to discuss its third quarter 2006 results. The call included prepared remarks from Jim Rogers, President and CEO, and David Hauser, CFO. Rogers noted results were below expectations due to weaker performance across most business segments compared to the prior year third quarter. Hauser provided more details on financial results, noting lower earnings in franchised electric and gas, natural gas transmission, international, and Crescent Resources segments. However, commercial power results improved due to the addition of Cinergy's nonregulated operations. Overall, Duke Energy expects to achieve its revised 2006 employee incentive target of $1.86 per share.
Dean Scarborough provided an overview of Avery Dennison Corporation's performance in 2005 and outlook. Key points:
1) The company improved underlying profitability in 2005 despite weaker sales, through price increases, cost cuts, and actions to drive future margin expansion.
2) Scarborough's assessment found the company has the right portfolio and strategies to deliver long-term value, with a goal to outperform shareholders' returns.
3) Over the next 3-5 years, the company aims to make its portfolio more profitable by reallocating resources and exiting underperforming businesses, while investing in growth initiatives like RFID and expanding in emerging markets.
Pepco Holdings, Inc. held an analyst conference on October 5-6, 2004 to discuss the company's performance. The presentation included an overview of PHI's businesses, strategy, and corporate governance practices. It noted PHI has $7.1 billion in revenues and focuses on its regulated electric and gas delivery business, which accounts for 72% of operating income. The Power Delivery segment was discussed, which includes the transmission and distribution of electricity to 1.8 million customers across several mid-Atlantic states.
New Zealand Energy Corp. is developing and producing oil and natural gas in New Zealand from a large conventional and unconventional resource base. The company made its first oil discovery in 2011, which tested over 1,100 barrels per day of oil. It plans to advance this well to commercial production in the fourth quarter of 2011. New Zealand Energy has a low-cost exploration model across five permits totaling over 2 million acres. It is led by a management team with extensive oil and gas industry experience.
Similar to Duke Energy 1Q/05_Prepared_Remarks (20)
ConAgra Foods is selling its chicken business to focus on branded and value-added food items. The sale includes chicken processing operations and will generate cash for ConAgra to reinvest. ConAgra will receive Class A shares in Pilgrim's Pride, the chicken company acquiring its business, representing 7% of voting shares and 49% of equity. It can sell up to 1/3 of these shares annually but expects to reduce ownership over time based on market conditions. ConAgra will also receive notes from Pilgrim's Pride due in 2011 with a 10.5% interest rate to be paid semi-annually.
This document summarizes the Q1 FY2004 earnings results of a large packaged foods company. Key points include:
- Q1 EPS was $0.37 compared to $0.43 in Q1 FY2003, impacted by various one-time gains and losses.
- Packaged foods sales were down $168M excluding divested businesses, with a 5% volume decline.
- Several major brands saw growth, while others like Butterball declined.
- Corporate expenses increased due to litigation expenses from a past joint venture.
- The effective tax rate for FY2004 is estimated at 38%.
ConAgra Foods is selling its United Agri Products business to focus on branded and value-added products, as part of a broader strategy of divesting non-core businesses over the past year including fresh beef/pork, canned seafood, and cheese operations. The sale is expected to close by December 31, 2003 for cash and $60-75 million in preferred stock. ConAgra will retain some international UAP operations generating $250 million in annual sales, concentrated in several countries. Proceeds will be used for debt paydown and general corporate purposes including acquisitions and stock buybacks.
ConAgra Foods divested its poultry business to focus on branded, value-added foods with strong margins and growth. The $300 million cash and 25 million Pilgrim's Pride shares valued at $245 million totaled less than the poultry business' estimated $545 million book value due to the shares being valued based on past prices, not current prices. ConAgra Foods can sell up to 1/3 of the shares each year and account for shares eligible for resale within a year as securities, and other shares using cost accounting. The poultry business was previously reported in Meat Processing but is now in Discontinued Operations.
ConAgra Foods completed the divestiture of its chicken processing and crop inputs businesses, finalizing its strategy to focus on branded, value-added food opportunities. The company received $300 million in cash and 25 million shares of Pilgrim's Pride stock worth $245 million for the chicken business. ConAgra can sell up to 1/3 of the Pilgrim's Pride shares per year and will account for the shares as securities held for resale within one year or using the cost method if the eligibility for resale is over one year away. The chicken business was previously reported as part of ConAgra's Meat Processing segment but is now in Discontinued Operations.
ConAgra Foods has divested several commodity businesses and acquired branded and value-added food products to focus on higher margin businesses. The company is planning a share repurchase program using cash from strong operating cash flows and recent divestitures. ConAgra expects to continue investing in growth through acquisitions and paying down debt while deploying cash to dividends, debt repayment, and share repurchases as appropriate.
The document provides a Q&A summary of ConAgra Foods' financial results for Q2 FY04 compared to Q2 FY03. Key points include:
- Q2 FY04 diluted EPS was $0.51 compared to $0.44 in Q2 FY03, impacted by $0.04 in discontinued operations in FY04 and $0.03 in divestiture expenses in FY03.
- Sales comparability was impacted by $506M in divested fresh meat businesses in FY03 and $154M in divested canned food businesses in FY03.
- Examples of brand sales growth included Banquet, Chef Boyardee, Egg Beaters
Packaged Foods sales increased 4% excluding divestitures, with 2% volume growth. Several brands posted sales growth including Armour, Banquet, and Blue Bonnet, while others like ACT II and Butterball declined. Sales comparability was affected by $155 million in divested businesses last year. Operating profit grew 5% in Packaged Foods and 10% overall when adjusting for divested businesses and cost savings initiatives. The company is implementing cost cutting measures expected to save more than implementation costs in the future.
The document provides the quarterly and annual financial results for a company. Some key highlights include:
- Several consumer brands posted sales growth for the quarter including Banquet, Blue Bonnet, and Chef Boyardee, while others like ACT II and Eckrich saw declines.
- Total depreciation and amortization was around $93 million for the quarter and $352 million for the fiscal year.
- Capital expenditures were around $106 million for the quarter and $352 million for the fiscal year.
- Net interest expense was $80 million for the quarter and $275 million for the fiscal year.
- Corporate expenses were around $95 million for the quarter and $342 million
- Major brands in the Retail Products segment that posted sales growth included ACT II, Armour, Banquet, and Blue Bonnet. Brands that posted sales declines included Healthy Choice, Slim Jim, and Snack Pack.
- Retail volume increased 8% while foodservice volume was flat excluding divested businesses.
- Increased input costs negatively impacted operating profits in the Retail Products segment by approximately $45 million.
- Capital expenditures were approximately $105 million, reflecting increased investment in information systems.
This document contains the questions and answers from ConAgra Foods' Q2 FY2005 earnings call. Some key details include:
- Several major brands in the Retail Products segment posted sales growth, while others saw declines.
- Retail volume increased 7% and Foodservice volume decreased 1% excluding divested businesses.
- Capital expenditures increased significantly year-over-year due to investments in information systems.
- The company received proceeds from the sale of its minority interest in Swift Foods and shares of Pilgrim's Pride stock.
This document summarizes the Q3 2005 earnings results of a major food company. Some key highlights include: 1) Major brands in the Retail Products segment saw mixed sales results, with growth for brands like Chef Boyardee but declines for brands like Butterball. 2) Unit volumes declined 3% for Retail Products but increased 4% for Foodservice Products. 3) The packaged meats operations were slightly profitable but profits were over $45 million lower than the previous year. The company expects some improvement but not year-over-year profit gains for packaged meats in Q4.
This document summarizes ConAgra Foods' earnings results for fiscal year 2005 (FY05) in a question and answer format. Some key details include:
- FY05 diluted EPS was $1.23, including $0.12 in expenses that impacted comparability.
- Major brands in the Retail Products segment that saw sales growth included ACT II, Banquet, and Blue Bonnet. Brands that saw declines included Armour and Butterball.
- Retail Products volume increased 2% while Foodservice Products volume decreased 2% in Q4.
- Total depreciation and amortization was approximately $351 million for FY05 and $90 million for Q4. Capital expenditures
The document provides the questions and answers from the Q1 FY06 earnings call for ConAgra Foods. Some key details from the summary include:
- Sales grew for major brands like Butterball but declined for brands like ACT II. Retail Products volume declined 3% while Foodservice increased 4%.
- Depreciation and amortization was $89 million. Capital expenditures were $71 million and net interest expense was $68 million. Corporate expense was $73 million.
- Gross margin was 21.6% and operating margin was 10.9%. The effective tax rate for FY06 is estimated to be 36%.
Major brands in the Retail Products segment that posted sales growth included ACT II, Blue Bonnet, Butterball, Kid Cuisine, Marie Callender's, Reddi-wip and Ro*Tel. Brands that posted sales declines included Armour, Banquet, Cook's, DAVID, Eckrich, Egg Beaters, Healthy Choice, Hebrew National, Hunt's, LaChoy, Orville Redenbacher, PAM, Parkay, Peter Pan, Slim Jim, Snack Pack, Swiss Miss, Van Camp's and Wesson. Retail Products volume declined 5% for the quarter while Foodservice Products volume increased 2%. Corporate expense for the quarter was approximately $103 million
The document provides financial information from ConAgra Foods' Q3 FY06 quarterly earnings call. Some key details include:
- Retail segment sales grew 4% and Foodservice grew 1% over the prior year. Several major brands posted sales growth while others declined.
- Gross margin was 24.8% and operating margin was 12.5% for the quarter.
- Net debt was $3.6 billion, down from $4.5 billion a year prior due to debt repayment of $500 million during the quarter.
- Capital expenditures for the quarter and fiscal year-to-date were below prior year levels. Projected fiscal year expenditures are up to $400
- Major brands in the Consumer Foods segment that posted sales growth in Q4 FY06 included Blue Bonnet, Chef Boyardee, DAVID, Egg Beaters, Hebrew National, and Hunt's. Brands that posted sales declines included ACT II, Banquet, Healthy Choice, Peter Pan, Slim Jim, Snack Pack, and Van Camp's.
- Consumer Foods volume declined 2% in Q4 while Food and Ingredients volume increased 1%.
- Total depreciation and amortization for Q4 was approximately $85 million and approximately $353 million for all of FY06. Capital expenditures were approximately $92 million for Q4 and $288 million for FY
This document summarizes the Q1 FY07 financial results of ConAgra Foods. Some key highlights include:
- Consumer Foods volume increased 1% and Food and Ingredients volume increased 2% in Q1.
- Gross margin was 24.7% and operating margin was 11.7% for the quarter.
- Net debt decreased to $2.88 billion from $3.97 billion in Q1 FY06.
- Restructuring charges totaled $39 million pre-tax, impacting costs in Consumer Foods and corporate expenses.
Major brands in the Consumer Foods segment that posted sales growth included Egg Beaters, Healthy Choice, and Slim Jim. Brands that posted sales declines included ACT II and Blue Bonnet. Total depreciation and amortization from continuing operations was $88 million for the quarter and $177 million year-to-date. Capital expenditures were $66 million for the quarter and $111 million year-to-date. Net interest expense was $52 million for the quarter and $110 million year-to-date.
1) Several major brands in the Consumer Foods segment posted sales growth for the quarter, while others like ACT II and Banquet saw declines. Overall, Consumer Foods volume declined 1% excluding divested businesses.
2) Total depreciation and amortization from continuing operations was around $91 million for the quarter and $268 million year-to-date. Capital expenditures were around $147 million for the quarter and $258 million year-to-date.
3) The company's net debt at the end of the quarter was around $3 billion, with a net debt to total capital ratio of 39%.
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1. PREPARED REMARKS AND Q&A
Q1 2005 Duke Energy Corporation Earnings Conference Call May 4, 2005
CORPORATE PARTICIPANTS PRESENTATION
Paul Anderson
Duke Energy - Chairman and CEO
David Hauser Operator
Duke Energy - Group VP and CFO
Fred Fowler Good day everyone and welcome to the Duke Energy first quarter
Duke Energy - President and COO earnings conference call. Today's conference is being recorded. At
this time for opening remarks, I would like to turn the call over to
Julie Dill
the Vice President of Investor Relations for Duke Energy, Ms.
Duke Energy - VP Investor Relations
Julie Dill. Ms. Dill, please go ahead.
CONFERENCE CALL PARTICIPANTS
Julie Dill - Duke Energy - VP Investor Relations
Greg Gordon
Good morning and thank you for listening in this morning. Joining
Smith Barney - Analyst
me today are Paul Anderson – Chairman and CEO, David Hauser –
Craig Shere
Calyon Securities - Analyst Group Vice President and Chief Financial Officer and Fred Fowler
– President and Chief Operating Officer. In addition, Keith Butler
Maureen Howe
RBC Capital Markets - Analyst – Corporate Controller and Myron Caldwell, our Treasurer are also
Paul Fremont available to answer your questions today.
Jefferies & Co. - Analyst
John Kiani
Today’s call will include a review of the first quarter results for
Credit Suisse First Boston - Analyst
2005.
Karen Taylor
Nesbitt Burns - Analyst
Before we begin with our prepared remarks let me read to you the
Dan Jenkins
Safe Harbor Statement.
State of Wisconsin Investment Board - Analyst
Some of the things we will discuss in today's
David Reynolds
Tribeca Global Management - Analyst call concerning future company
Matthew Akman performance will be forward-looking
CIBC World Markets - Analyst
statements within the meaning of the
Nathan Judge securities laws. Actual results may
Atlantic Equities - Analyst
materially differ from those discussed in
Ali Agha
these forward-looking statements, and you
Wells Fargo Securites - Analyst
should refer to the additional information
and cautionary factors contained in our
2004 Form 10-K and other SEC filings
concerning factors that could cause those
results to be different than contemplated in
today’s discussion.
In addition, today’s discussion includes certain non-GAAP
financial measures as defined under SEC Regulation G. A
reconciliation of those measures to the most directly comparable
GAAP measures will be made available on our investor relations
website at: www.duke-energy.com.
1
2. PREPARED REMARKS AND Q&A
Q1 2005 Duke Energy Corporation Earnings Conference Call May 4, 2005
Following our prepared comments we will open the lines for your I’m not going to walk through each item in this table, but we
questions. With that I’ll turn the call over to Paul. thought it would be helpful for you to see a summary of the special
items included in our reported numbers.
Paul Anderson - Duke Energy - Chairman and CEO
The majority of the special items were associated with the
Thanks, Julie and good morning everyone.
transactions we announced in late February. Specifically, we had
gains related to the sale of the TEPPCO general partner and the
This morning we reported earnings of 91 cents per basic share,
TEPPCO LP units. These gains were partially offset by charges
which included 47 cents per share in special items, for the first
related to the de-designation of hedges at Field Services which
quarter of 2005. Our ongoing earnings were 44 cents per basic
resulted from our plan to go to a 50/50 ownership structure with
share this quarter compared with 34 cents per share last year.
ConocoPhillips.
That’s an increase of nearly 30%. This quarter’s ongoing results
benefited from solid operations and a significant reduction in
Other special items included the recognition of a gain on the sale
interest expense.
of DENA’s Grays Harbor facility and a one-time charge related to
mutual insurance.
The biggest improvement was seen at DENA. While they are still
reporting a loss for the quarter, it was more than $140 million less
All in all, it was a great quarter in my view and reflects the actions
than last year. The success that Bobby and his team had in
we took last year to strengthen each of our businesses.
reducing the earnings volatility associated with the mark-to-market
portfolio was a major factor in reducing losses at DENA.
So, with that, let me turn the call over to David to review these
results in a little more detail.
Field Services saw quite a jump from $91 million to $151 million.
Obviously, they continue to benefit from strong commodity prices
for both crude oil and natural gas liquids. David Hauser - Duke Energy - Group VP and CFO
Thank you, Paul. Paul gave you the overview for the quarter so let
International Energy boosted their results by more than 60% over me move on to the business unit details.
last year. This group made a tremendous effort to increase returns
and the numbers really reflect this. Segment EBIT for Franchised Electric was $336 million in the first
quarter of 2005 compared with $424 million for the first quarter of
Gas Transmission delivered stable earnings growth for the quarter. 2004. Results were lower due to higher operating and maintenance
And, while we continue to see a positive trend in industrial sales, expenses of approximately $31 million related to scheduled plant
we reported lower results at our Franchised Electric business. This maintenance along with milder weather compared to 2004. It is
was primarily due to milder weather, higher O&M related to important to note that the $31 million increase is not a run-rate for
scheduled maintenance at our facilities and lower results from bulk the year, rather we expect total O&M for 2005 to be about $50
power marketing. The lower results for bulk power marketing were million higher than last year.
primarily due to the profit-sharing plan which was implemented in
the second quarter of 2004. Taking all of this into consideration, Bulk power sales were down slightly, by about $5 million. The
Franchised Electric continues to be a very solid performer. profit sharing associated with bulk power sales had a negative
EBIT impact of approximately $20 million. You will recall that
And, although slightly lower than last year, Crescent Resources Duke Power reached a profit sharing agreement with the regulators
delivered another good quarter with strong sales of land and in North and South Carolina in mid-2004. This agreement
residential lots. provides a mechanism to share profits from the company’s bulk
power marketing activities between customers and shareholders.
The next slide provides a detailed review of the special items for This quarter reflects the profit sharing while last year’s first quarter
the first quarter. does not. This sharing mechanism began in the second quarter of
2
3. PREPARED REMARKS AND Q&A
Q1 2005 Duke Energy Corporation Earnings Conference Call May 4, 2005
2004 and was retroactive to January 1, 2004 – so you should The profit-sharing mechanism established by the Ontario Energy
expect the year-to-date numbers to catch up at the end of the Board calls for Union Gas to share with customers those profits
second quarter. above the allowed rate of return that Union Gas would have earned
under normal weather conditions. If weather is colder than normal
Regulatory amortizations totaled $85 million for the first quarter of Union Gas will get to keep the excess. Conversely, if the weather
2005 compared with $69 million last year. We recorded $15 is warmer than normal Union Gas will bear that earnings risk.
million more Clean Air amortization than was originally scheduled
for the first quarter 2005. The additional amortization was booked Natural Gas Transmission continues to expect its ongoing EBIT
in order to be consistent with regulatory expectations regarding the growth rate to be in the range of 3 – 5% for the 2005 to 2007 time
reported return on equity (ROE) in North Carolina. The ROE period. New projects and the recently announced acquisition of
Duke Power reported for the twelve months ended December 31, the remaining 50% ownership in the Saltville gas storage facility
2004 was robust at 13.6%. Therefore, booking more amortization located in Virginia will all contribute to the earnings growth of our
expense is consistent with the overall intent of the North Carolina natural gas transmission business.
Clean Air legislation. We expect the regulatory amortization for
the full year 2005 to be approximately $300 million. Now let me move on to Field Services.
We begin 2005 with another strong quarter for industrial sales I know many of you already understand all the ins and outs of the
which were 6% higher than last year. Our economic development transactions we announced in February, but we wanted to make
efforts are producing positive results as higher sales to non-textile sure that everyone is on the same page. In late February we
industries continued to significantly outpace the decline in textile announced that Duke Energy Field Services would sell its general
sales. Lower sales to our residential customers as a result of partner interest in TEPPCO for $1.1 billion. Duke Energy’s
warmer weather were offset by higher sales to our commercial portion of this pre-tax gain on sale was approximately $791 million
customers. The average number of customers increased 2%, or and ConocoPhillips’s portion was $343 million. In addition, Duke
approximately 45,000, over the first quarter last year. Energy agreed to sell its TEPPCO LP units for a pre-tax gain of
approximately $97 million. These two transactions closed in
While segment EBIT was somewhat lower than last year, February.
Franchised Electric remains on track to meets its EBIT growth
target of 0 to 2% for the 2005 to 2007 period. For 2005, we would The next transaction will be the change in ownership between
expect to be at the low end of that range depending on our ability Duke Energy and ConocoPhillips. Duke Energy will transfer
to add to rate base over the coming months. 19.7% of its current interest to ConocoPhillips in exchange for a
combination of no less than $500 million of cash and certain assets
Now let’s move on to Gas Transmission. to total approximately $1.1 billion pre-tax. This transaction is
expected to close in the second half of 2005.
Natural Gas Transmission delivered $407 million in segment EBIT
for the quarter, an increase of approximately $9 million over first As we stated before, when we move to 50/50 on DEFS, accounting
quarter 2004. rules do not allow us to have hedges associated with that
ownership. Therefore, the positions in place for 2005 and 2006
moved to mark-to-market on February 22nd, the date the deal
Higher results benefited from U.S. pipeline expansion projects put
into service in 2004 and the Gulfstream expansion which was became probable. The impact of the 2005 hedges being marked to
market on February 22nd was $95 million of expense. This $95
completed in early 2005. The stronger Canadian currency was also
a benefit this quarter. These results were partially offset by lower million reverses over the balance of the year in the following way:
earnings at Union Gas resulting from decreased demand for natural $22 million in the second quarter, $38 million in the third quarter
gas and the implementation of a new profit-sharing program. and $35 million in the fourth quarter. For the calendar year 2005,
this accounting change has no impact on ongoing EBIT which is
3
4. PREPARED REMARKS AND Q&A
Q1 2005 Duke Energy Corporation Earnings Conference Call May 4, 2005
why the quarterly impacts are being defined as special items and Duke Energy North America (DENA) reported a segment EBIT
taken out of reported earnings. loss of $35 million, including a $21 million pre-tax gain on the
sale of the Grays Harbor facility. This compares with a $557
The impact of the 2006 hedges’ going mark to market on February million segment EBIT loss in the first quarter of 2004, which
nd
22 was $23 million of expense. This $23 million is considered a included $359 million in special items primarily related to the
special item because it occurred as a result of a specific deal and anticipated loss on the sale of the southeast plants.
the gains on that deal will also be considered special items.
Ongoing results for the quarter benefited from increased margins
The “Other EBIT” line is also affected by the de-designation of the from energy generation, as well as lower operating expenses.
2005 and 2006 hedges. That line contains the mark-to-market DENA’s successful efforts in reducing the mark-to-market
moves from February 22nd through March 31st. I’ll review the portfolio over the last year resulted in a favorable variance of
details of those moves in just a moment. approximately $87 million for mark-to-market losses compared
with the first quarter of 2004.
Excluding these special items, ongoing segment EBIT from
continuing operations was $151 million and compares with DENA’s earnings profile is seasonal and the third quarter will be
ongoing EBIT of $91 million for the first quarter of 2004. key. If we see strong summer weather and DENA is able to
capture the value, their forecasted ongoing EBIT loss of $150
Ongoing results for the quarter benefited from strong commodity million could be reduced by $15 to $20 million.
prices for both NGLs and crude oil. The weighted average NGL
price for the first quarter 2005 was 73 cents per gallon compared to Now let me move on to International Energy.
59 cents per gallon in first quarter 2004.
International Energy’s segment EBIT from continuing operations
Given the anticipated change in ownership with ConocoPhillips was $68 million in the first quarter of 2005. This compares with
and the strong crude oil prices we’ve seen so far this year, we $42 million in ongoing segment EBIT last year, excluding a $13
would like to provide an update to the EBIT guidance for 2005. million special item related to the sale of our investment in the
Assuming we close mid-year with ConocoPhillips and crude oil Cantarell facility in Mexico.
averages $50 per barrel for the year, we would expect ongoing
segment EBIT to be approximately $480 million. If oil were to We are very pleased with the results from our international
average $40 per barrel for the second half of the year, ongoing operations. Our assets in Brazil, Guatemala and Peru all
segment EBIT would be reduced by about $15 million. These contributed to higher earnings this year. We also benefited from
estimates do not include any earnings effect from the changes in higher prices and volumes at our National Methanol business.
the mark-to-market of the de-designated hedges as these changes
will be included in the Other EBIT line item. International Energy has started off the year well and we still
expect to see ongoing segment EBIT growth in the range of 2 – 3%
Before I move on to DENA, I wanted to let you know that we will over the 2005 to 2007 time period.
be putting an exhibit together in the next couple of weeks to show
how the deconsolidation of Field Services will affect each line item Crescent Resources, our real estate business, delivered segment
on the financial statements. You will find that schedule in the EBIT of $52 million for the first quarter of 2005 compared to $60
investor section of Duke Energy’s website shortly after the 10-Q is million for the same quarter last year. Strong results for the first
filed on May 10th. quarter were due to higher residential lot and land sales. Last
year’s first quarter benefited from strong sales of commercial
So now let’s move to DENA. property in the Washington DC area.
4
5. PREPARED REMARKS AND Q&A
Q1 2005 Duke Energy Corporation Earnings Conference Call May 4, 2005
Crescent is off to a strong start and we now expect Crescent’s in 2005. This reduction is the direct result of the debt reductions
ongoing segment EBIT to exceed $150 million this year. which took place last year. We still expect interest expense for the
full year 2005 to be approximately $1.1 billion.
Other EBIT, which largely represents the cost of corporate
governance at Duke Energy, will now also include the change in The effective tax rate for both quarters was approximately 34%.
mark-to-market value of the de-designated hedges from Field
Services. On a reported basis, Other EBIT was a negative $169 Cash and cash equivalents along with short-term investments
million for the first quarter of 2005. totaled approximately $2.07 billion at the end of the first quarter.
Let me remind you that this is a consolidated number and reflects
One of the special items for the quarter was a $28 million charge 100% of the cash at Field Services. The net increase for the
related to a mutual insurance liability adjustment. quarter is primarily due to the proceeds received from the TEPPCO
sales less the cash used to buyback common shares for
Also included in this quarter’s results is the change in the mark-to- approximately $834 million. And yes – we continue to assess the
market value of the hedges from Field Services from the time of best use of this cash position for our shareholders.
the de-designation at February 22nd to the end of the quarter. For
the 2005 hedges, the mark-to-market move is an expense of $54 While Duke Energy has already retired 30 million shares
million. This amount is defined as a special item and will reverse associated with the accelerated share buyback, Merrill Lynch is
as follows: $10 million in the second quarter, $22 million in the still in the market repurchasing these shares and will continue to do
so until mid-November. As of April 30th they had repurchased 6.6
third quarter and $22 million in the fourth quarter. Again, the 2005
accounting changes will have no impact on the year since they all million shares.
reverse out by year end.
In addition to this share buyback program, we are also working
Finally for the 2006 contracts the mark to market move from with Merrill Lynch to repurchase up to another 20 million shares.
February 22nd to March 31st is an expense of $56 million. This Merrill Lynch can buy shares under this arrangement through the
amount is not considered to be a special item and will be a part of end of the year, and we have the ability to stop this program at any
time. As of April 30th they had repurchased 1.6 million shares
ongoing earnings as will subsequent moves in the mark to market
of this position. under this arrangement.
While we provided guidance for Other ongoing EBIT of Before I turn the call over to Fred for his comments on the
approximately $200 million in net expenses for 2005, that amount company’s operations, I would like to let you know that we
is now subject to change as the mark-to-market valuation of the de- recently announced some key personnel changes within the finance
organization which will be effective June 1st. These changes have
designated hedges changes over time. By the end of this year, only
the change in value of the 2006 contracts will be a variance to the been made as part of our continued commitment to employee
ongoing EBIT guidance of $200 million in net expenses but we development. Keith Butler, who is currently the controller for
have no way of estimating what that variance would be at this Duke Energy, will assume the leadership role in our tax
time. department taking the place of Cary Flynn who will be retiring.
Steve Young, who is currently the CFO at Duke Power, will step
Simply put, Other ongoing EBIT is expected to be about $200 into the Controller position, while Myron Caldwell, whom many of
million in net expenses, excluding any mark-to-market changes. you know is our Treasurer, will rotate into the CFO position at
Now let me move on to briefly review some other income Duke Power. Lindsay Hall will become the Treasurer. Lindsay is
statement and balance sheet items. currently the CFO for Duke Energy Americas, and will be replaced
by Lon Mitchell. I know you join me in congratulating them and
For interest expense, Duke Energy reported a $63 million wishing them the best in their new roles.
reduction from last year from $356 million in 2004 to $293 million
5
6. PREPARED REMARKS AND Q&A
Q1 2005 Duke Energy Corporation Earnings Conference Call May 4, 2005
With that, I will turn it over to Fred… Our gas transmission business is also evaluating the possibility of
forming a Canadian income trust, which is similar to a master
limited partnership structure here in the U.S.
Fred Fowler - Duke Energy - President and COO
Thank you, David.
On a similar note, DEFS is evaluating opportunities to launch a
publicly traded limited partnership, or MLP, within the Field
I’d like to briefly review some of the business activities we’ve
Services business later this year. Field Services does believe it has
been focusing on over the last few months. I’ll also take this
a number of assets that would qualify for the MLP structure and
opportunity to update you on activities that may happen later this
Field Services may also consider opportunities to acquire other
year.
assets that could be put into an MLP. They have recently
announced that Mike Bradley will spearhead our efforts to evaluate
Let’s start with Duke Power. Our economic development efforts
and pursue the possibility of creating a new MLP and if one is
are starting to pay off. We are working with companies outside the
created, Mike would be the CEO of the new MLP.
textile industry to expand their operations here in the Carolinas.
Companies such as Dell, Merck and General Dynamics are adding
As far as the change in ownership with ConocoPhillips, we still
new manufacturing capacity in our service territory. This is a good
expect to close on that transaction in the second half of the year.
start and we hope to see other companies follow their lead.
And, as a reminder, DEFS will transfer its Canadian midstream
assets and ConocoPhillips will contribute its Empress system in
In looking at the capital expenditures for the year, Duke Power is
Canada to our Gas Transmission business.
still evaluating a number of potential investments. Additional
capex is now expected to be about $100 million for 2005 for a
While DENA didn’t see any significant changes in spark spreads
variety of small projects. We are also evaluating some long-term
in the East or Midwest, it appears there may be less hydropower
generation options to add to the rate base which could include the
available in the Northwest, so our plants in California may see
construction of a new coal plant and the pursuit of a nuclear
some upside this summer.
construction and operating license. New generation will be needed
to meet the growing baseload demand over the next decade.
We are still working on that sustainable business model for
DENA along two paths. The first is pursuing a transaction that is
We are also evaluating our regulatory options once we reach the
beneficial to the long-term viability of a merchant energy
end of our rate freeze at the end of 2007 for our business in North
business and the second path is to come up with a plan for DENA
Carolina. We don’t have specific plans to address this issue yet
on a stand-alone basis. This stand-alone plan would have to
but we do have a strong track record of finding win-win solutions
ensure that DENA, on an ongoing basis, can reach breakeven by
for both our customers and shareholders. There is a lot of activity
the end of 2006 and be profitable past 2006.
going on at Duke Power and we’ll be hosting an investor chat on
this business unit in late June.
One of the businesses that I’m really pleased with this quarter is
our International Energy business. They delivered strong
During the first quarter at our Natural Gas Transmission business,
earnings and we continue to see improvement in their returns.
various of our pipelines held open seasons to gauge customer
You may recall that we did hold back our available 2006 and
interest in future transportation capacity. Open seasons for the
2007 capacity from the energy auction in Brazil because we
Southeast Supply Hub, Maritimes & Northeast and the Union Gas
thought we would be more successful in marketing this capacity
transmission system resulted in significant interest from customers.
directly to our customers. And, our marketing teams in Brazil
Our marketing teams have been working with these customers to
have done some of that. This quarter they have signed four new
sign long-term contracts which will underpin the investment to
contracts for a total of 34 megawatts. This represents about 25%
build-out of pipeline infrastructure.
of the available capacity for 2006 and brings our total MW sold
forward for 2006 to 77%.
6
7. PREPARED REMARKS AND Q&A
Q1 2005 Duke Energy Corporation Earnings Conference Call May 4, 2005
Brazil held another auction for 2008 and 2009 in early April; we Now we’ll be happy to take any questions you may have.
did choose not to participate in this auction due to our
disappointment in the pricing for those products. We also believe
our continued marketing efforts will be more successful as they
QUESTION AND ANSWER
were with the 2006 capacity.
I also wanted to mention that our international operations are a
stand-out when it comes to environmental health and safety. Our
plant operations in Latin America have an outstanding safety Operator
record and we are very proud of their accomplishments.
Greg Gordon, Smith Barney.
I’ll end on that high note and turn the call back over to Paul for
Greg Gordon - Smith Barney - Analyst
his final remarks.
Thanks. Good morning. On the core utility business, it looks like
Paul Anderson - Duke Energy - Chairman and CEO gross margins are running significantly ahead of your expectations
in part driven by the robustness of the industrial backdrop. If you
Thanks, Fred.
were to see your economic backdrop continue to accelerate, should
we just expect that you use that as an opportunity to increase the
Let me wrap up by saying that I think we are off to a good start for amortization for clean air above and beyond even what is now a
the year. It’s a refreshing change to be able to talk more about the modestly higher forecast for the year?
company’s future and not about its challenges.
David Hauser - Duke Energy - Group VP and CFO
With Duke Energy’s operations running smoothly, I’ve been able
In North Carolina, you would see a change in the clean air. In
to turn my attention to other matters. One of these matters is
South Carolina, any improvement would flow to the bottom line.
climate change. Since my comments on that subject attracted a bit
So that's the way it would split. But in North Carolina, you're
of press, I thought I might clarify where I’m coming from. exactly right. We would book more clean air amortization.
In my view, encouraging conservation, increasing energy Greg Gordon - Smith Barney - Analyst
efficiency and promoting the development of new technologies
And am I right, looking at the numbers to see that at least year-to-
will benefit all of us no matter what your opinion is of global
date, it's very early in the year I know, that it looks like you're a
warming. And further, I believe we need to be proactive on this
little bit ahead of where you planned?
issue, or we may face the brunt of future regulations which may
not be favorable to our industry or the economy, let alone to our
David Hauser - Duke Energy - Group VP and CFO
company. As a result, I’m in favor of a carbon tax, or a similar
broad-based tax, because I don’t believe our industry should carry Yes, we're $15 million ahead of where we planned on the clean air
amortization.
the entire costs associated with reducing CO2 emissions.
Greg Gordon - Smith Barney - Analyst
I’m also devoting a great deal of time on the future of Duke
Energy – what will it look like five, even ten, years from now.
And on the TEPPCO potential for the new MLP transaction at
While I can’t lay out anything specific for you at this time, we are
Field Services and for the Canadian income trust, can you give us a
looking at a number of value-creating opportunities. The TEPPCO sense of what the potential sort of minimum and maximum value
and DEFS transactions are probably good examples of the types of of those transactions could be?
transactions we’re looking at. We’re in the early stages here and,
Fred Fowler - Duke Energy - President and COO
while it’s very hard to talk about the future without giving you any
specifics, I’m very optimistic about the future of Duke Energy.
7
8. PREPARED REMARKS AND Q&A
Q1 2005 Duke Energy Corporation Earnings Conference Call May 4, 2005
I really think it's premature to make those comments. We need to Craig Shere - Calyon Securities - Analyst
do a little more work.
Okay. I guess what I'm just trying to say is the '06, ignoring '05,
the '06 hedges when they settle in '06, all the mark-to-market
Greg Gordon - Smith Barney - Analyst
effects will have offset by the end of that period?
Okay, thanks, guys.
Paul Anderson - Duke Energy - Chairman and CEO
Operator
By the end of '06. Yes. Certainly.
Craig Shere, Calyon Securities.
David Hauser - Duke Energy - Group VP and CFO
Craig Shere - Calyon Securities - Analyst
That's exactly right.
Hi. Good quarter.
Craig Shere - Calyon Securities - Analyst
David Hauser – Duke Energy - Group VP and CFO
Okay. And I don't know, Fred or Paul, if either of you want to
Thank you.
respond to this. Fred, on your comments about finding a JV
partner for DENA and the possibility or the goals, if it were, to go
Craig Shere - Calyon Securities - Analyst it alone, previously you all seemed pretty confident or at least had
a strong goal of trying to find a JV partner before the end of the
year. Can you kind of characterize where those discussions are and
I have a couple of questions. First, David, I just want to get clear.
maybe some of the probabilities of this finding its way into a more
So the ongoing earnings, excluding special items, include maybe
economic partnership?
$0.03 to $0.04 in charges for mark-to-market losses that will
reverse in '06?
Paul Anderson - Duke Energy - Chairman and CEO
David Hauser - Duke Energy - Group VP and CFO
I'll spare Fred having to say no. We still are vigorously pursuing a
JV partner. I think Fred's comments are simply we aren't going to
Well, let's be clear. There are mark-to-market losses associated
come to the end of the year and suddenly find that this track wasn't
with 2006 hedges that occurred between February 22 and March
fruitful, and we don't have a fall back. I think it's prudent to run the
31. Those are $0.03 to $0.04. They will move if the market moves
dual track and say, we are going to proceed on the basis that we
this year. So if the price of oil drops, then you will see those moves
don't have a JV partner. But that in no way diminishes our
in our favor. If the price of oil rises from where it was at March 31,
enthusiasm for our efforts in finding a JV partner.
you'd see them move against us.
Craig Shere - Calyon Securities - Analyst
Craig Shere - Calyon Securities - Analyst
Paul, are you still willing to consider very deep-pocketed strong
Right, but the net effect of whatever happens this year will wash
balance sheet financial players that don't necessarily have as much
out by '06?
hard assets on the ground as yet as potential partners?
Paul Anderson - Duke Energy - Chairman and CEO
Paul Anderson - Duke Energy - Chairman and CEO
Not for the '06 hedges. The '05 hedges washout by the end of the
Sure. I think we would have to put everything in context. But just
year.
as a starting point, the strategic aspects of a partner are more
important -- well, not more important, but certainly as important as
David Hauser - Duke Energy - Group VP and CFO
the financial character of the potential partner.
Yes. The '05 hedges washout by the end of the year. The '06
Craig Shere - Calyon Securities - Analyst
hedges would be marked-to-market at the end of the year, and then
whatever happens in '06 to the price of oil would affect them.
8
9. PREPARED REMARKS AND Q&A
Q1 2005 Duke Energy Corporation Earnings Conference Call May 4, 2005
Okay, thank you.
David Hauser - Duke Energy - Group VP and CFO
Operator
Okay, let me answer it this way: we will do different types of
Maureen Howe, RBC Capital Markets. contracts with different parties. And in one case, you would sell
people the right to operate the plant. So they have a call on the
plant. If they opt they will pay us a fee for that, so they pay us a
Maureen Howe - RBC Capital Markets - Analyst
tolling fee. If they operate it, then the cost of the operation, the fuel
costs and all that, is on their nickel. So they're taking the risk of
Thanks very much. I'm just wondering if you can give us little that. In other cases, we have sold forward energy; and in that case,
more color with respect to the outlook for Duke Energy Field we've actually sold forward megawatt hours. So that's the capacity
Services. In particular, if oil was to say stay at a $50 level, can you versus the energy. Is that helpful?
give us some idea of what 2006 EBIT might look like?
Maureen Howe - RBC Capital Markets - Analyst
David Hauser - Duke Energy - Group VP and CFO
That is helpful. Thanks very much. And then also I'm just
We haven't put out anything for 2006 EBIT guidance for DEFS wondering if you can tell me, for the Maritimes & Northeast, you
and I don't think we're prepared to do that at this point. recently had what looked like pretty successful indications of
interest. And I'm wondering there, are you really looking at an
expansion of that pipe? Or are you looking at potential participants
Maureen Howe - RBC Capital Markets - Analyst
in the Sable Island offshore development, perhaps putting back
some of their capacity on that pipe and then maybe reallocating to
What about just for the last half of the year after the transaction,
new potential shippers.
assuming the transaction closes mid year. Can you give us a idea
what the last six months would look like for 2005?
Fred Fowler - Duke Energy - President and COO
David Hauser - Duke Energy - Group VP and CFO
Yes, Maureen. We will have a reverse open season once we get to
that point in the process and we would expect some capacity turn
That's where I gave you the guidance that if it moves from $50 oil
by. But we also expect expansion as well. And we're at a point
to $40 oil, that's $15 million of EBIT. That is in the back half of
that we have a lot of flexibility because this next expansion on that
the year.
system will be compression.
Maureen Howe - RBC Capital Markets - Analyst
Maureen Howe - RBC Capital Markets - Analyst
Okay. And just with clarification, this is for the DENA table.
Okay. That's great, Fred. And maybe one last question and that has
When you break out the percent of contracted capacity, can you
to do with a potential Canadian income trust. You have a number
just specify what you characterize as capacity versus energy? This
of assets in Canada. Most, I think, of which are regulated, although
is on page 15.
I do believe you have some non-regulated plants in British
Columbia. Can you maybe give us an idea of what assets you
David Hauser - Duke Energy - Group VP and CFO might be looking…well, I guess you could put the Maritimes &
Northeast in, but…what assets you might be looking at putting into
Yes. Well, let me just make sure we're at the same point here as far that potential income trust?
as what is capacity and is what energy. Capacity is simply access
to the plant. So that is megawatts. Energy is the megawatt hours
Fred Fowler - Duke Energy - President and COO
produced by the plant. So ask me your question one time. I'm not
sure I'm clear on it.
Again, Maureen, I'm going to give you the same answer I gave on
the MLP. I think it's a little premature to have that discussion. But
Maureen Howe - RBC Capital Markets - Analyst as we do formalize our plans, we will definitely lay them out for
you.
Well, I just want to understand what you are, in fact, referring to. I
mean, capacity, I guess? I'm wondering are you referring to a
Maureen Howe - RBC Capital Markets - Analyst
capacity payment or a tolling arrangement.
9
10. PREPARED REMARKS AND Q&A
Q1 2005 Duke Energy Corporation Earnings Conference Call May 4, 2005
David Hauser - Duke Energy - Group VP and CFO
That's great. Thank you very much.
I didn't follow. I don't have that number. I didn't follow that math
Operator exactly.
Paul Fremont, Jefferies & Co.
Paul Fremont - Jefferies & Co. - Analyst
Paul Fremont - Jefferies & Co. - Analyst Well, I guess the adjustments in your press release strip out the
$791 million gain, the $97 million gain, and the $118 million in
charges. But don't strip out the $54 million in mark-to-market
Just a couple of points of clarification. The gain on the sale of
losses on de-designated 2005 Field Services hedges.
Grays Harbor is broken out as a special item and yet it's included
in the $35 million EBIT loss number at Duke Energy North
America. So when you guys talk about being able to do $15 to $20
David Hauser - Duke Energy - Group VP and CFO
million better than your EBIT guidance on the year, is that
including or excluding Gray Harbor? And how come the DENA
It's in the other EBIT line. It's not in the field services line.
number doesn't really adjust for that to show a loss of $56 million
in the first quarter?
Paul Fremont - Jefferies & Co. - Analyst
David Hauser - Duke Energy - Group VP and CFO
I got it.
On the Duke Energy North America slide on the ongoing segment
EBIT, it shows a $56 million loss for the first quarter. And $198 David Hauser - Duke Energy - Group VP and CFO
million for the first quarter of '04. So that's the $142 million of
improvement that we've been talking about. That's the distinction.
Paul Fremont - Jefferies & Co. - Analyst Paul Fremont - Jefferies & Co. - Analyst
So the $15 to $20 million improvement then does represent an Okay. One other question. Is there any progress or in re-
improvement, even excluding this gain? contracting any of the California power plants that are owned by
DENA? Or have they been re-contracted?
David Hauser - Duke Energy - Group VP and CFO
Fred Fowler - Duke Energy - President and COO
That's exactly right.
Yes. And we have done some re-contracting. Actually at this point,
on a recent market dip that we had awhile back, we actually took
Paul Fremont - Jefferies & Co. - Analyst
off some of our summer hedges this year to free up the plants just
because of how we saw the summer setting up in California.
Okay. I just wanted to make sure that that was the case.
David Hauser - Duke Energy - Group VP and CFO
David Hauser - Duke Energy - Group VP and CFO
And that's where we made the comment during the talking points
That's right.
that if the summer turned out hot in California, you might see us
beat the $150 million that we've talked about as a loss by maybe
Paul Fremont - Jefferies & Co. - Analyst $15 to $20 million.
And then I guess I'd point out at Field Services, it looks as if you
Paul Fremont - Jefferies & Co. - Analyst
take the mark-to-market adjustments on the dedesignated hedges
that you actually would've had an adjusted EBIT of $205 million
Yes. Because you've seen much better pricing, I guess, in
instead of $151 that you show in the press release. Is that sort of a
California. The last question is can you quantify the currency
correct way to read that?
adjustment at Gas Transmission?
10
11. PREPARED REMARKS AND Q&A
Q1 2005 Duke Energy Corporation Earnings Conference Call May 4, 2005
To me, the major driver that you're going to get out of a transaction
David Hauser - Duke Energy - Group VP and CFO
is the fact that these are pretty high overhead businesses. If you
look at it, the overhead of DENA is around $150 million a year.
Yes, it was $13 million for the first quarter.
And we think you could run a business three to four times the size
of ours with about that same kind of overhead. So one of the
Paul Fremont - Jefferies & Co. - Analyst drivers on a transaction is just to do a combination with another
company where that you can eliminate that kind of cost.
Thank you.
Operator The other thing that we're looking to do is rebuild our gas
marketing business. We had traditionally in recent years had done
that through a joint venture with ExxonMobil that we've been in
John Kiani, Credit Suisse First Boston.
the process of shutting down. We're now to the point that we can
go out and rebuild that business so that will be a major leg of the
John Kiani - Credit Suisse First Boston - Analyst
improvement as well.
Good morning. Can you elaborate a little bit on what your thoughts
John Kiani - Credit Suisse First Boston - Analyst
are on your ownership of the international businesses over the
medium to long-term?
Great, thank you, that's helpful.
Paul Anderson - Duke Energy - Chairman and CEO
Operator
Well, what we have said with regard to international is that for the
Karen Taylor, Nesbitt Burns.
medium-term, we have given them a challenge of getting into
double digit returns. In fact, basically what we've said, we expect
them to at least beat what we can get in the power company, if they
Karen Taylor - Nesbitt Burns - Analyst
have international operations. And they have laid out a good plan
that shows increasing returns over the next two to three years and
Quick question just regarding the Field Services, and I know with
growth of EBIT. So we have basically kind of left it on the basis as
the deconsolidation you can't have hedges any more. But can you
long as you're improving and you're on that plan, we're happy.
just talk about where you are in a hedged position overall in the
Though I would say long-term we don't have any strong imperative
various commodities within that portfolio?
to build international operations. I guess if you said somebody
would come in tomorrow and offer us a premium price because it
was worth a lot more to them, I probably would listen to that. Does David Hauser - Duke Energy - Group VP and CFO
that answer your question?
Probably the easiest way to look at it is for the second half of the
year if you were allowed to have hedges, we'd be 79% hedged.
John Kiani - Credit Suisse First Boston - Analyst
It does. I just have one more question. I know you've already Karen Taylor - Nesbitt Burns - Analyst
discussed it a little bit, but can you elaborate a little bit more on
your strategy for DENA to move to EBIT breakeven and how the And can you break that between the oily part of the barrel and the
potential structures that you're evaluating might help you get to non-oily part which you've done before?
that point?
David Hauser - Duke Energy - Group VP and CFO
Fred Fowler - Duke Energy - President and COO
I don't have the specific hedges, but basically the oil is 40% of the
We're continuing to try to move that business much more to a barrel and that is hedged in oil. And then the propane is hedged in
physical marketing business as opposed to the way it was initially propane.
built more on a training and marketing model. We continue to try
to work on driving our cost down. We continue to work out of
Karen Taylor - Nesbitt Burns - Analyst
some of our hedge positions as the markets allow us to. As I
mentioned earlier, we did take off some hedges in the California
So are you 100% hedged then notionally on the oil part of the
market when we got an opportunity that we felt was the right time.
barrel and what part would that be on the propane side?
11
12. PREPARED REMARKS AND Q&A
Q1 2005 Duke Energy Corporation Earnings Conference Call May 4, 2005
David Hauser - Duke Energy - Group VP and CFO Dan Jenkins - State of Wisconsin Investment Board - Analyst
I don't have the specific numbers, but the answer is we're Hi. State of Wisconsin Investment Board. First, I was wondering
essentially 100% hedged on the oil part. on your cash flow statement on page 14 of your release, it looks
like the cash from operations is down about $270 million from last
year. I was wondering if you could give me some detail on that.
What's driving that?
Karen Taylor - Nesbitt Burns - Analyst
David Hauser - Duke Energy - Group VP and CFO
Okay. Just a quick follow-up on the Canadian MLP. I know the
income trust, or whatever you want to call it is in its early days and
The vast majority of that is the increase in collateral associated
I appreciate that. Given your total portfolio, you must be talking
with the hedge positions at Duke Energy Field Services.
about the non-regulated side because regulated side as far as I was
aware isn't necessarily receptive to that as of yet. Can you just
indicate whether that view has actually been changed by any Dan Jenkins - State of Wisconsin Investment Board - Analyst
decision that I may have missed?
Okay. And then I assume the net cash used in financing that's
David Hauser - Duke Energy - Group VP and CFO primarily the equity buy backs. Is that correct? What is the
difference there?
I think for the Canadian income trust, it's fair to say that Union Gas
isn't really on our radar screen right now for that. And so I think David Hauser - Duke Energy - Group VP and CFO
that's the big regulated one that you'd be talking about.
Hang on one second. Okay. The cash flow from financing would
Karen Taylor - Nesbitt Burns - Analyst be associated with the equity buy backs. I had kind of look to make
sure I had the right things in the right lines there. But that is
associated with the equity buy backs.
Well, even the NEB regulated facility which includes both gas
gathering and possessing in BC, at least a good chunk of it, and the
main line pipeline. Again, I’m not aware that the NEB has Dan Jenkins - State of Wisconsin Investment Board - Analyst
changed its stance there either. But that is on the table, as far as
you are saying.
Okay. And then on page 13, your balance sheet, I was wondering
how much debt is included in the current liability lines? Is there
David Hauser - Duke Energy - Group VP and CFO any debt in there?
I think I said that we haven't taken it off the table yet. David Hauser - Duke Energy - Group VP and CFO
Karen Taylor - Nesbitt Burns - Analyst Yes. Current maturities of long term debt are $1 billion 556. And
additional commercial paper of $100 million.
Okay.
Dan Jenkins - State of Wisconsin Investment Board - Analyst
David Hauser - Duke Energy - Group VP and CFO
$100 million of CP. Okay, then I was also wondering on DENA,
you mentioned part of a big reason for your improvement was
But as Fred said, there certainly have not been any decisions made.
successful efforts in your mark-to-market book. And I was
wondering how much more of that proprietary book is still left to
Karen Taylor - Nesbitt Burns - Analyst
be worked down or finalized?
Okay. And that's it. Thank you.
Fred Fowler - Duke Energy - President and COO
Operator
Very little. We've pretty much balanced that book.
Dan Jenkins, State of Wisconsin Investment Branch.
David Hauser - Duke Energy - Group VP and CFO
12
13. PREPARED REMARKS AND Q&A
Q1 2005 Duke Energy Corporation Earnings Conference Call May 4, 2005
It's a big book. But it's balanced. philosophical standpoint, would you do those deals just because
you can get high prices for those assets now, or only do them if
you saw a transaction imminent in the use of that cash imminent?
Paul Anderson - Duke Energy - Chairman and CEO Paul Anderson - Duke Energy - Chairman and CEO
Well, the driver for the MLP is really to be strategically positioned
I think that's the significant thing.
to be able to participate in transactions with a mechanism that
allows you to compete. Because most of the transactions taking
Operator
place in the Field Services area, or many of them right now, are
being driven by master limited partnerships and the lower cost of
David Reynolds, Tribeca Global Management. capital is important. So it's not so much to generate cash from
creating the MLP, but it's to create the mechanism that you can
then grow. And the same thing to a lesser extent with income trust.
David Reynolds - Tribeca Global Management - Analyst
And I think the income trust is probably a lot more gleam in the
eye than the MLP, if you will, in terms of our decision that it's the
Yes. Good morning. I just wanted to get an update on the capital
right thing to do.
deployment strategy. You're now into two buy backs here with the
second one going on. Has there been any more thought to change
Matthew Akman - CIBC World Markets - Analyst
in the dividend and when would we be thinking about a decision
time on that?
Okay, maybe I can get a similar question in a different way. In
terms of cash, I guess you guys have a couple billion dollars, but to
Paul Anderson - Duke Energy - Chairman and CEO
do any significant transactions, you've got some money tied up in
the share buy back. I guess, would you need to sell more assets or
Well, the board typically looks at a dividend at their May meeting.
where do you see sort of the cash balance going without selling
This is May and we have a board meeting coming up. And so it's
more assets as we get through the year?
premature to make any comments on that. It will be a consideration
at the May meeting but what they decide to do is up to them at that
Paul Anderson - Duke Energy - Chairman and CEO
point.
Well, I think at this point in time we're quite comfortable that we
David Reynolds - Tribeca Global Management - Analyst
don't need to sell any assets or do anything from being driven from
a cash perspective. We will only sell assets because we get a great
And what day is the May meeting?
price for them or strategically they don't make any sense to us.
David, you might want to just comment in general where our cash
Paul Anderson - Duke Energy - Chairman and CEO position is.
May 12th. David Hauser - Duke Energy - Group VP and CFO
David Reynolds - Tribeca Global Management - Analyst I want to make one point clear because you talked cash tied up
with the share buy back. The cash for the 30 million shares went
out the door before March 31. The only thing left on that is a true-
Thank you very much.
up as Merrill Lynch covers the short, whichever way the true-up
goes. So the vast majority of that cash is already out the door. I
Operator
think the other thing that's going on is we are looking for
opportunities in a couple of our core businesses. We think Gas
Matthew Akman, CIBC World Markets. Transmission may have some more opportunities and we think
Franchised Electric may have some more opportunities, especially
if they build a generation plant. So I think as you look at our cash,
Matthew Akman - CIBC World Markets - Analyst
we'll be looking at opportunities to deploy some of it in those key
businesses.
Thanks. I guess maybe this is for Paul. I guess in the last
conference call you said you don't like to have a lot of spare cash
sitting around, and yet creating income trusts and MLPs, I guess, Matthew Akman - CIBC World Markets - Analyst
would get more cash in the door. So maybe just from a
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14. PREPARED REMARKS AND Q&A
Q1 2005 Duke Energy Corporation Earnings Conference Call May 4, 2005
Okay. Thanks very much. You mean comparable to the 15 to 20?
Nathan Judge - Atlantic Equities - Analyst
Operator Yes, sir.
Nathan Judge, Atlantic Equities.
David Hauser - Duke Energy - Group VP and CFO
Nathan Judge - Atlantic Equities - Analyst
We haven't put a number out like that, but one of the things you
might want to note on our disclosures is that in '06, previously we
Good morning. I wanted to follow up on your question with regard had 42% of the energy sold and it's down to 34% now. And that's
to some of the improvement in the California markets with regard because we've opened up some of the positions in the West in the
to DENA. Last year you mentioned that there was some element of summer next year. So we have more potential next year because of
expected improvement in the markets that needed to be there in that.
order to breakeven in '06 with regard to DENA's EBIT. How do we
stand today relative to your expectations then?
Nathan Judge - Atlantic Equities - Analyst
Fred Fowler - Duke Energy - President and COO And as far as capacity payments, could you just give us an update
on what you're seeing in the market as far as any measures as far as
I'm not sure I understand your question, Nathan. This is Fred. kilowatts -- dollars per kilowatt per year?
Paul Anderson - Duke Energy - Chairman and CEO David Hauser - Duke Energy - Group VP and CFO
If the question is is California looking more positive than it looked I don’t have that in front of me.
a year ago, I'd say that certainly for this summer it's setting up to
look pretty positive.
Paul Anderson - Duke Energy - Chairman and CEO
Nathan Judge - Atlantic Equities - Analyst We're kind of all looking at each other. I will tell you that the
payments for capacity to date have been pretty sorry, because I
It seems to me that as we look across the country that there is an don't think, generally in almost all markets, that the system
improvement. But what I'm trying to gauge is relative to your operators to date have accepted the fact that they're going to have
expectations, I think when you originally set it out in February of to seriously compensate generators for having capacity available.
2003 or excuse me, '04, I think there was an indication that there But we're starting to see a movement in that area. But to date we
was some expectations that the market would improve. haven't seen anything very robust.
Fred Fowler - Duke Energy - President and COO Nathan Judge - Atlantic Equities - Analyst
Yes. I think for '05 we have an awful lot of our capacities in Thank you. And just finally my last question. What would need to
California sold, especially during the peak periods. So for us to get happen and how long would it take, for a serious investment into
big improvement out of markets this year, other than that capacity the ground with a new nuclear plant.
that I talked about earlier that we freed up for the summer, what we
need is better markets in the Mid West as well as the Northeast,
Paul Anderson - Duke Energy - Chairman and CEO
where we have more available capacity.
Well, there are a couple of key things. I've actually had quite a few
Nathan Judge - Atlantic Equities - Analyst conversations with our friends in Washington over this because
they asked me that question directly. The real critical thing is
Could you give us an indication what the same type of number we've got to have some assurance that there'll be a place for the
would be for '06? If you had similar-type weather? spent fuel to go. And Yucca Mountain or a Yucca Mountain
substitute, is very critical to come up with a solution for where the
spent fuel goes. The second thing is we have talked with the
David Hauser - Duke Energy - Group VP and CFO
Department of Energy about alternatives in which they might
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15. PREPARED REMARKS AND Q&A
Q1 2005 Duke Energy Corporation Earnings Conference Call May 4, 2005
ensure or you might say underwrite an investment in a nuclear
Right. But there was this other 20 million program that you also
plant to the extent that it ends up being delayed, due to a
have. Should we assume most of that should be done by the end of
procedural hang up which could makes a completed plant sit there
the year?
for an extended period of time. We need some sort of assurance
that we will not be left holding the bag on that. So those two things
David Hauser - Duke Energy - Group VP and CFO
we really need before we would go forward with a nuclear plant. I
don't think that we would expect to see actually breaking ground of
If we do that 20 million, of course, we said we can stop it at any
a plant in the next five years.
point. But if that 20 million occurs, it would occur by the end of
the year. But of course you use a 13-month average to calculate the
Operator shares, so it wouldn't have a 20 million share impact for the year.
Ali Agha, Wells Fargo Securities.
Ali Agha - Wells Fargo Securites - Analyst
Ali Agha - Wells Fargo Securites - Analyst Right. I guess what I'm getting at is to get to your assumed budget
for that $1.60 target, do you need to have bought back those 20
Thank you. Good morning. Paul, could you just remind us again, million shares?
what is the EPS target that's baked into your '05 incentive plan?
David Hauser - Duke Energy - Group VP and CFO
Paul Anderson - Duke Energy - Chairman and CEO
No.
It's $1.60.
Ali Agha - Wells Fargo Securites - Analyst
Ali Agha - Wells Fargo Securites - Analyst
Okay. Thank you.
$1.60. And I'm assuming Q1 is putting you nicely on track for
that?
Operator
Paul Anderson - Duke Energy - Chairman and CEO And that does conclude the question and answer session. I'll turn
the conference back over to Ms. Julie Dill for any closing remarks.
Well, one of the things that we've done is we've avoided any kind
of guidance beyond telling you what our plan is. But I don't see
Julie Dill - Duke Energy - VP Investor Relations
anybody slitting their wrists right now.
Great! Thank you, Kelly. And thank you, everyone, for joining us
Ali Agha - Wells Fargo Securites - Analyst today. As always, my team and I are available to take your
questions afterwards, and we thank you again for your
And what's the average share count we should be assuming in that participation.
$1.60 plan?
Operator
Paul Anderson - Duke Energy - Chairman and CEO
That does conclude today's teleconference. Thank you for your
The average shares are… participation.
David Hauser - Duke Energy - Group VP and CFO
Well, the shares outstanding on March 31 are 928 million. And so
that reflects the 30 million reduction that has occurred. So that'll be
phasing into the 12 month average over the year.
Ali Agha - Wells Fargo Securites - Analyst
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