Q2 2025 Duke Energy Corp Earnings Call

August 5, 2025

It's just a question by pressing star followed by one on your telephone keypad.

You changed your mind, please pissed off about to when he said I think he brought to remove yourself from a question Keith.

I'll hand over to our host Zynga, Vice President of Investor Relations to begin.

Please go ahead Debbie.

Thank you Jamie and good morning, everyone welcome to Duke Energy's second quarter, 2025 earnings review and business update.

Leading our call today is Harry Sudairis, President and CEO, along with Brian Savoy Executive Vice President and CFO.

Today's discussion will include the use of non-GAAP financial measures and forward looking information.

Actual results may differ from forward looking statements due to factors disclosed in today's materials and in Duke Energy's SEC filings.

The appendix of today's presentation includes supplemental information.

Along with a reconciliation of non-GAAP financial measures with that let me turn the call over to Harry.

Thank you Abby and good morning, everyone. It's great to be with you today for our second quarter earnings call. We have a lot of exciting news to share. This morning, starting with Brookfield infrastructure 6 billion minority investment in our Florida business.

This transaction enables a material strengthening of our credit profile as we enter this period of significant growth as well as the ability to grow our Florida utility at its full potential.

We are now targeting <unk> to debt of 15%, a 100 basis point increase versus our previous target.

We are also increasing our Florida capital plan by $4 billion.

<unk> portion of the sale proceeds.

Brookfield is a highly regarded infrastructure investment and we are pleased to have them as a long term partner and Duke energy, Florida.

And further support of our capital funding needs, we announced the sale of our Tennessee LDC business to spire last week, the premium valuation of $2 5 billion or one eight times rate base reflects the high end of LDC asset sale precedents.

We have been privileged to serve the Tennessee community for more than 40 years, and I know that under <unk> leadership, our teammates and assets will continue to operate with excellence and provide best in class service.

Combined these strategic transactions allow us to efficiently finance the record growth ahead of us and give us greater confidence in delivering our EPS objectives.

Shifting to the second quarter results on slide five we announced adjusted earnings per share of $1 25 building on our strong start to the year.

These results were driven by topline growth across electric utilities.

We move into the back half of the year with positive momentum and are reaffirming our 2025 guidance range of $6 17 to $6 42.

And our long term EPS growth rate of 5% to 7% through 2029.

Moving to slide six we continued to deliver on our strategic priorities, including advancing large scale economic development projects and securing industry, leading regulatory and legislative outcomes.

Starting with economic development, we operate in some of the most attractive jurisdictions in the country are straight our states continue to thrive and grow in the affordable reliable power. We provide plays a key role in bringing business into our regions.

We've been partnering with our straight states to attract jobs and investments for decades and that momentum continues to build.

In fact, North Carolina was just named the top state for business by CNBC for the third time in four years and most of our states ranked in the top 10.

Our size and scale together with an unwavering commitment to our customers and demonstrated willingness to partner to the business allow us to move with speed and agility to seize the opportunity ahead.

To highlight a recent project win Amazon Web services announced in June that it plans to invest more than $10 billion to build a new data center campus in North Carolina.

I am proud to say that our team played an integral role in making this happen.

AWS described North Carolina as being the perfect home for this investment and highlighted our efforts in putting the site on their radar.

Our team continues to build on their track record of success moving at pace with our customers to deliver what they need when they need it.

To continue to bring in these significant wins in a competitive environment. We are working closely with our stakeholders during the quarter, we advanced for state and federal policies that enables us to meet the moment for our customers.

While at the same time supporting our credit profile, improving our regulatory construct and maintaining customer affordability.

These outcomes show clear alignment between our company and policymakers on shared goals of delivering reliable and affordable energy to meet growing demand.

On the federal side, the preservation of nuclear production tax credits and the final budget reconciliation Bill was a significant win for our customers.

Only well run cost efficient reactors are eligible to receive the credit or 11 gigawatt nuclear fleet is the largest regulated fleet in the nation and earned $500 million of Ptc's last year for the benefit of our customers.

We appreciate the engagement from Congress, the administration and stakeholders around our shared objective of supporting nuclear energy and lowering customer bills.

In North Carolina, the power Bill reduction Act became law last week.

As we ramp up generation investments to meet accelerating load growth. This legislation allows for annual recovery of financing costs for new base load generation supporting our credit profile and minimizing cost to customers.

In South Carolina, The Energy Security Act was signed into law in May the legislation supports all of our both strategy recognizing the value of our dual state system and importantly allows electric utilities to implement a rate stabilization mechanism similar to our gas utilities.

This efficient mechanism allows for annual rate true ups that reduce volatility for customers and support the credit quality of the utility.

And finally, the Ohio legislation approved house Bill 2015 in May as well as outline the law replaces the electric security plan with a multi year forward looking ratemaking process, reducing regulatory lag.

Beyond Legislative accomplishments, we continue to build our track record of regular regulatory execution.

We recently filed rate cases in South Carolina for both Duke energy progress and Duke Energy Carolinas, We expect hearings to take place in the fourth quarter with new rates in effect early next year if approved.

Later this month, we plan to file applications with the North Carolina, and South Carolina commissions and for <unk> to combine our D C and D. P utilities, we expect the combination to generate significant customer savings over $1 billion through 2038.

As we simplify processes and adding operational flexibility to our system.

We are targeting targeting January 27th for the effective date.

And finally, we continue to advance regulatory approved approval processes for new generation investments and plan to.

The law replaces the electric security plan with a multi year forward looking ratemaking process, reducing regulatory lag.

File our next Carolinas resource plan in North Carolina by October one.

Beyond Legislative accomplishments, we continue to build our track record of regular regulatory execution.

Focusing on our generation plans as you can see on slide seven we are actively advancing all solutions to quickly meet the increasing demand coming to our service territories, including maximizing our current fleet, while we build new capacity.

And we're on track to add over eight gigawatts of dispatch will power across our system through 2031.

This includes uprate projects to efficiently increase the capacity of existing natural gas nuclear and hydro units in aggregate they represent over one gigawatt of cost effective incremental capacity.

As we simplify processes and adding operational flexibility to our system.

Turning to new generation, we finalized the EPC agreement for our first combined cycle underdevelopment in the Carolinas and construction is underway.

We are targeting targeting January 27th for the effective date.

We also announced the site location for the third combined cycle and Anderson South Carolina.

And finally, we continue to advance regulatory approved approval processes for new generation investments and plan to.

In Indiana, we reached settlements in archive CPC and proceeding the agreements with reliable energy and industrial in the industrial group provide key support for our request, including the request to recover financing costs as they are incurred.

File our next Carolinas resource plan in North Carolina by October one.

Hearings begin later this month and we expect an order by November these.

These milestones demonstrate our progress in advancing these critical infrastructure investments with turbine secured under our framework agreement with GE or Nova and gas supply contracted we are confident in meeting the in service timelines, we've laid out for these new units.

And we're on track to add over eight gigawatts of dispatch will power across our system through 2031.

In closing our strength in the first half of the year was driven by solid execution by our 26000 teammates. This performance coupled with our unwavering focus on operational excellence demonstrates our ability to meet the unprecedented growth we see over the next decade and deliver value for shareholders and customers.

Turning to new generation, we finalized the EPC agreement for our first combined cycle underdevelopment in the Carolinas and construction is underway.

We also announced the site location for the third combined cycle and Anderson South Carolina.

With that let me turn the call over to Brian.

In Indiana, we reached settlements in our Cayuga, CPC and proceeding the agreements with reliable energy and industrial in the industrial group provide key support for our request, including the request to recover financing costs as they are incurred.

Thanks, Harry and good morning, everyone.

Moving to slide eight we finished the first half of 2025 with another strong quarter with reported and adjusted earnings per share of $1 25 million. This.

This is up from adjusted earnings per share of $1 18 in 2024.

Hearings begin later this month and we expect an order by November these.

Within the segments electric utilities, <unk> infrastructure was up 10 cents compared to last year.

Driven by top line growth from the implementation of new rates across Carolinas, Florida and Indiana.

Partially offsetting these items were higher planned O&M and interest expense.

Gas utilities and infrastructure results were flat to last year consistent with the seasonality of the LDC business.

And finally, the other segment was down too.

Primarily due to higher planned interest expense.

Overall, we are very pleased with the results we've achieved so far this year.

With that let me turn the call over to Brian.

Which continued to reflect the strength of the regulatory outcomes and the operational performance. We have consistently delivered and we are on track to achieve our targeted EPS and credit objectives for 2025.

Thanks, Harry and good morning, everyone.

Moving to slide eight we finished the first half of 2025 with another strong quarter with reported and adjusted earnings per share of $1 25.

Turning to slide nine popular.

Population migration in the southeast and Midwest continues to drive sustained customer growth.

This is up from adjusted earnings per share of $1 18 in 2024.

Within the segments electric utilities and infrastructure was up 10 cents compared to last year.

Led by more than 2% in the Carolinas.

As expected Rolling 12 month volumes moderated in the quarter driven by a very strong second quarter of 2024, particularly in the residential class.

Driven by top line growth from the implementation of new rates across Carolinas, Florida and Indiana.

Partially offsetting these items were higher planned O&M and interest expense.

First half results reflect a shift in mix across retail classes compared to our original assumptions.

Gas utilities and infrastructure results were flat to last year consistent with the seasonality of the LDC business.

We are closely monitoring these trends, but continue progressing towards our one 5% to 2% volume growth expectations for the year.

And finally, the other segment was down too.

Primarily due to higher planned interest expense.

As we look ahead, we continue to expect load growth to accelerate in the latter years of the plan as large load projects come online and begin to ramp.

Overall, we are very pleased with the results. We've achieved so far this year, which continued to reflect the strength of the regulatory outcomes and the operational performance. We have consistently delivered and we are on track to achieve our targeted EPS and credit objectives for 2025.

Our economic development pipeline remains robust.

And we continue to take a risk adjusted approach as we evaluate which projects to include in our forecast.

Turning to slide nine.

As a reminder, our pipeline includes a diverse mix of customers, including advanced manufacturing projects across multiple sectors as well as data centers.

Population migration in the southeast and Midwest continues to drive sustained customer growth.

Led by more than 2% in the Carolinas.

I've talked about how we are streamlining our processes to accelerate economic development projects through the pipeline and these efforts are yielding tangible results.

As expected Rolling 12 month volumes moderated in the quarter driven by a very strong second quarter of 2024, particularly in the residential class.

The $10 billion AWS data center investment in North Carolina is an incredible economic development wins for Richmond County in the entire state of North Carolina.

First half results reflect a shift in mix across retail classes compared to our original assumptions.

We are closely monitoring these trends, but continue progressing towards our one 5% to 2% volume growth expectations for the year.

The data center will support both cloud computing and AI infrastructure and is expected to create at least 500, new high skilled jobs.

As we look ahead, we continue to expect load growth to accelerate in the latter years of the plan as large load projects come online and begin to ramp.

This announcement is a major public milestone for the project.

Highlights our team's continued focus on speed creativity and execution as we help move the project to the development process.

Our economic development pipeline remains robust.

And we continue to take a risk adjusted approach as we evaluate which projects to include in our forecast.

The site selected for this project is part of our site readiness program, which helps our state regional and local economic development partners make potential industrial land more attractive.

As a reminder, our pipeline includes a diverse mix of customers, including advanced manufacturing projects across multiple sectors as well as data centers.

By identifying sites that already have robust transmission infrastructure and capacity.

I've talked about how we are streamlining our processes to accelerate economic development projects through the pipeline and these efforts are yielding tangible results.

Can proactively accelerate the timeline of getting power delivery to our site.

That strategic groundwork has paid off and I'm proud of the work. The team continues to do to consistently meet our customers' needs.

The $10 billion AWS data Center investment North Carolina is an incredible economic development wins for Richmond County in the entire state of North Carolina.

Turning to slide 10.

Proceeds from the minority investment in Duke Energy, Florida, and the sale of our Tennessee, LDC business strongly position us for the transformational generation modernization investments ahead.

The data center will support both cloud computing and AI infrastructure and is expected to create at least 500, new high skilled jobs.

A portion of the proceeds will be used as efficient funding to derisk our equity plan.

This announcement is a major public milestone for the project and at <unk>.

Highlights our team's continued focus on speed creativity and execution as we help move the project through the development process.

And the remaining proceeds will displace long term debt materially strengthening the balance sheet.

Enabled by these transactions.

The site selected for this project is part of our site readiness program, which helps our state regional and local economic development partners make potential industrial land more attractive.

We announced today that we are raising our long term <unk> to debt target to 15%.

New target will provide 200 basis points of cushion above our Moody's downgrade threshold.

By identifying sites that already have robust transmission infrastructure and capacity.

And 300 basis points above our S&P downgrade thresholds.

Can proactively accelerate the timeline of getting power delivery to our site.

We are also delivering on all credit supportive initiatives and are firmly on track to achieve 14% <unk> to debt this year.

That strategic groundwork has paid off and I'm proud of the work. The team continues to do to consistently meet our customers' needs.

Focusing on the equity plan the deal valuations represent significant premiums to our common stock.

Sure.

Turning to slide 10.

Proceeds from the minority investment in Duke Energy, Florida.

We'll use about half of the proceeds or $3 5 billion to displace common equity <unk>.

And the sale of our Tennessee, LDC business strongly position us for the transformational generation modernization investments ahead.

Including funding the incremental capital we're investing in Florida.

We expect to issue the remaining $4 5 billion of common equity through the drip and ATM programs and the 2007 to 2009 timeframe.

A portion of the proceeds will be used as efficient funding to derisk our equity plan.

And the remaining proceeds will displace long term debt materially strengthening the balance sheet.

Moving to slide 11.

We remain confident in delivering our 2025 earnings guidance range of $6 17 to $6 42.

Enabled by these transactions.

We announced today that we are raising our long term <unk> to debt target to 15%.

And 5% to 7% earnings growth through 2029.

This new target will provide 200 basis points of cushion above our Moody's downgrade threshold and 300 basis points above our S&P downgrade thresholds.

Proceeds from the accretive transaction solidify our credit profile and provide further confidence in our potential to earn at the top half of the range as load growth accelerates in the back end of the plan.

We are also delivering on all credit supportive initiatives and are firmly on track to achieve 14% <unk> to debt this year.

Along with supportive legislation in place and our track record of constructive regulatory outcomes.

Focusing on the equity plan the deal valuations represent significant premiums to our common stock.

We are well positioned to achieve our growth targets, which combined with our attractive dividend yield.

We will use about half of the proceeds or $3 $5 billion to displace common equity <unk>.

Provide a compelling risk adjusted return for shareholders.

With that we'll open the line for your questions.

Including funding the incremental capital we're investing in Florida.

We expect to issue the remaining $4 5 billion of common equity through the drip and ATM programs and the 2007 to 2009 timeframe.

Thank you very much as a reminder to ask a question. Please press star followed by one when your telephone keypad now.

Your mind, Please press star two.

Moving to slide 11.

<unk>. Your question, please ensure devices on music locally.

We remain confident in delivering our 2025 earnings guidance range of $6 17 to $6 42.

Our first question comes from Julien Dumoulin Smith from Jefferies. Your line is open Julien. Please go ahead.

And 5% to 7% earnings growth through 2029.

Yeah.

Hey, good morning team. Thanks, Thanks for the time and done nicely done here.

Good morning, Julien Thank you Julien.

Absolutely.

Maybe just to kick it off here a little bit here I mean, obviously a series of constructive data points here, whether it's the Carolinas legislation.

Along with supportive legislation in place and our track record of constructive regulatory outcomes.

Transaction in Tennessee, or now this in Florida, how do you think about this positioning yourself within the EPS CAGR right.

We are well positioned to achieve our growth targets, which combined with our attractive dividend yield.

Provide a compelling risk adjusted return for shareholders.

I only see net accretive actions before us are there any offsets otherwise said.

With that we'll open the line for your questions.

The way I've looked at this doing and is this really just gives us even more confidence in our five to seven range that we've mentioned many times before and also gives us confidence in earning in the top half of that range in the 2008 and 29 in the back end of the plan the $4 billion investment in Florida is going to come in in that time.

Thank you very much.

As a reminder to ask a question. Please press star for about one on your telephone keypad now.

In your mind based Christophe robot too.

Marshall question presents your devices on music locally.

Our first question comes from Julien Dumoulin Smith from Jefferies. Your line is open Julien. Please go ahead.

Graeme.

So I would look at all of these transactions.

Movement is really solidifying is in that range and in the top half of that range towards the back into the plan.

Hey, good morning team. Thanks, Thanks for the time and done nicely done here.

Good morning, Julien Thank you Julien.

Absolutely.

Excellent and then if I can ask a bit more of a fine.

Maybe just to kick it off here a little bit here I mean, obviously a series of constructive data points here, whether it's the Carolinas legislation.

A little bit more of a detailed question here around the latest Carolina legislation can you elaborate just a little bit further about how that shifts to your plan and then just with respect to that.

Transaction in Tennessee, or now this in Florida, how do you think about this positioning yourself within the EPS CAGR right.

Any shift in expectations on earned returns or spending just to elaborate obviously this is a novel development.

I only see net accretive actions before us are there any offsets otherwise said.

Yes, the passage of that Bill really enhances the attractiveness for growth in the state had bipartisan support and we definitely support a growing state and like I mentioned in North Carolina is number one for business ranked by CNBC. So a lot of good things going on in North Carolina with AWS and other things.

The way I've looked at this doing and is this really just gives us even more confidence in our path to seven range that we've mentioned many times before and also gives us confidence in earning in the top half of that range in the 2008 and 29 in the back end of the plan the $4 billion investment in Florida is going to come in in that time.

So our plan is still intact with the bill that gives us some credit help with C with being able to recover annually.

Graeme.

So I've looked at all of these transactions.

Movement is really solidifying is in that range and in the top half of that range towards the back into the plan.

But I would look at it is our plan is still along the same lines of the all of the above that we filed in the multiple rfps that we've done will be following another one here. This fall and just really looking at it all resources that can support the growth that we're seeing in North Carolina. This bill just helps us manage that but also manage the cut.

Excellent and then if I can ask a bit more of a fine.

A little bit more of a detailed question here around the latest Carolina legislation can you elaborate just a little bit further about how that shifts to your plan and then just with respect to that.

<unk> affordability portion.

Any shift in expectations on earned returns or spending just to elaborate obviously this is a novel development.

Excellent I'll pass it on but nicely done again guys.

Thank you.

Yes, the passage of that Bill really enhances the attractiveness for growth in the state. It had bipartisan support we definitely support a growing state and like I mentioned, North Carolina is number one for business.

Okay.

Our next question comes from Nick Campanella Barclays. Your line is open. Please go ahead.

Hey, good morning, Thanks for all the info today.

Good morning, So I just wanted to ask.

CNBC so a lot of good things going on in North Carolina, with AWS and other things.

Hey, good morning, good morning.

Just wanted to ask.

Hi.

So our plan is still intact with the bill that gives us some credit help with C with being able to recover annually.

This is the second time I guess he has done a noncontrolling interest stake in the business. You just did Tennessee, just how are you kind of thinking about any additional opportunities across the portfolio to just knock out that remaining $4 5 billion.

But I would look at it is our plan is still along the same lines of the all will be above that we filed in the multiple rfps that we've done will be following another one here this fall and just.

Kind of done here for now thanks.

The reason we did these deals is they're just very efficient use of equity. So we feel comfortable in what we've done so far and we also feel comfortable with the equity plans that we've laid out to cover our growth.

Really looking at all resources that can support the growth that we're seeing in North Carolina. This bill just helps us manage that but also to manage the customer affordability portion.

I would look at it is for now, but we're going to stick and get these transactions done and implementing our plan and continuing our growth trajectory that we have.

Excellent I'll pass it on but nicely done again guys congrats.

Thank you.

Okay.

Our next question comes from Nick Campanella Barclays. Your line is open. Please go ahead.

Okay, that's very clear and then just.

Youre outlining excuse me youre outlining and increased episode of debt to 15% long term, what's the feedback from the agency has been and then can you just clarify what year, you expect to get to that 15%.

Hey, good morning, Thanks for all the info today.

Good morning, So I just wanted to ask.

Hey, good morning morning.

Wanted to ask.

Hi.

This is the second time I guess he has done a noncontrolling interest stake in the business that you just did Tennessee, just how are you kind of thinking about any additional opportunities across the portfolio to just knock out that remaining $4 5 billion.

Range is it 27 or maybe you can provide more clarity there. Thanks.

Nick I'll kick that off and then Brian can add some color.

The rating agencies have always been supportive of our metrics, where they were this is just going to enhance that we just recently had a meeting in April with them and they were supportive of our plans our regulatory outcomes that we have in the states that we serve around storm securitization in storm recovery.

Done here for now thanks.

The reason we did these deals is they're just very efficient use of equity. So we feel comfortable in what we've done. So far we also feel comfortable with the equity plans that we've laid out to cover our growth. So I would look at it is for now that we're going to stick and get these transactions done.

As tools that we have really help them feel comfortable with where we are today at 14%.

Done in implementing our plan and continuing our growth trajectory that we have.

And they're only going to be more comfortable at a higher level, obviously, Brian do you want to add anything to that yes, I would add Nick I mean, we we have several strategies.

Okay, that's very clear and then just.

Way to improve <unk> to debt even before these transactions were announced right. Then the legislation that Harry just spoke to in North Carolina with quip recovery.

South Carolina Energy Security Act has more efficient credit positive aspects of the regulation and Ohio.

Range is it 27 or maybe you can provide more clarity there. Thanks.

Nick I'll kick that off and then Brian can add some color.

The multi year rate plan structure, it's going to take some time to get those.

The rating agencies have always been supportive of our metrics, where they were this is just going to enhance that we've just recently had a meeting in April with them and they were supportive of our plans our regulatory outcomes that we have in the states that we serve around storm securitization in storm recovery those tools that.

Those will turn in but once they do there is a more efficient cash recovery.

And these these transactions kind of give a booster shot to that <unk>. So I would say, we're tracking really strongly to the 2014 this year without any of those things in place to strong cash flow and execution of the business as expected and.

We have really help them feel comfortable with where we are today at 14%.

Within the five year plan will clearly be in the 15, and we will refresh the the financial plan in February Nick with more detailed as we absorb timing and use of proceeds in a more granular way.

And they are only going to be more comfortable at a higher level. Obviously, Brian do you want to add anything to that yes, I would add Nick I mean, we we have several strategies.

To improve <unk> to debt.

Okay. Thank you very much.

Before these transactions were announced rate then the legislation that Harry just spoke to in North Carolina with quip recovery.

Thank you.

Our next question comes from Steve Fleishman from Wolfe Research. Your line is open Steve. Please go ahead.

South Carolina Energy Security Act has more efficient credit positive aspects of the regulation and Ohio.

Yes, hi, good morning, Thank you.

Maybe just following up on the last question should we should we assume you need to kind of complete.

The multi year rate plan structure, it's going to take some time to get those.

Florida.

Those will turn in but once they do there is a more efficient cash recovery.

Sell down steps to get to the 15%.

Steve I would say as it progresses.

Not all the tranches, but we need to progress through the deal to be right at 2015.

Okay.

And then just thinking about I think I can't remember the exact number but in the past I think you've given a number for us.

Within the five year plan will clearly be in the 15, and we'll refresh the financial plan in February Nick with more detailed as we absorb timing and use of proceeds in a more granular way.

Okay.

As capital goes up a rough ratio is how much would be funded with equity does that.

Change when we kind of look to.

Okay. Thank you very much.

Refresh later this year based on these new metrics. So it's roughly the same.

Thank you.

Our next question comes from Steve Fleishman from Wolfe Research. Your line is open Steve. Please go ahead.

We've always targeted between 30% and 50% depending on what recovery mechanism, we have and will continue to look at that as we refresh our plans.

Yes, hi, good morning, Thank you.

Maybe just following up on the last question should we should we assume you need to kind of complete.

And I would add this okay, great balance sheet.

Florida.

This balance sheet strengthening obviously gives us more flexibility.

Sell down steps to get to the 15%.

Timing of the equity component of that capital investment and the like but the 30% to 50% is a good planning range.

Steve I would say as it progresses.

Not all of the tranches, but we need to progress through the deal to be right at 2015.

Yeah.

Makes sense and then.

Lastly, just maybe.

Okay.

And then just thinking about I think I can't remember the exact number but in the past I think you've given a number for us.

It might be helpful to get a little more color on.

Your views on.

Kind of resource preferences, as we head into the next.

Okay.

As capital goes up a rough ratio is how much would be funded with equity does that.

<unk>, there and I guess specifically.

Any updates on your thinking on new nuclear.

Change when we kind of look to.

Yes, Steve I'll take that one.

Refresh later this year based on these new metrics are roughly the same.

We've always had the all of the above strategy. So we look at a wide range of resources, including nuclear.

We've always targeted between 30% and 50% depending on what recovery mechanism, we have and will continue to look at that as we refresh our plans.

Like we said many times, we operate the largest regulated fleet of nuclear plants in the country.

We think nuclear has a place to play in a lot of promise in the future, but before we go down that path, we're going to have to have some some things figured out we're going to have to have the first of a con risk design supply chain workforce resolved, perhaps tomorrow is an even bigger reactors, how we're going to handle that.

And I would add this okay, great balance sheets and Eric and.

This balance sheet strengthening obviously it gives us more flexibility.

Timing of the equity component of that capital investment and the like but the 30% to 50% is a good planning range.

Makes sense and then.

We're also going to have to have overrun protection from the federal government or others to be able to protect our customers and our investors for many overruns on these projects.

Lastly, just maybe.

It might be helpful to get a little more color on.

Your views on.

Kind of resource preferences, as we head into the next.

And then lastly, we're going to have to have a means to make sure that we're protecting the balance sheet. As we are building. These facilities until we get those items resolved we're still looking at.

Update there and I guess specifically.

Any updates on your thinking on new nuclear.

Solar gas.

Yes, Steve I'll take that one.

Operating and getting everything that we can out of our current assets.

We've always had the all of the above strategy. So we look at a wide range of resources, including nuclear.

Great.

Like we said many times, we operate the largest regulated fleet of nuclear plants in the country.

Makes sense. Thank you appreciate it.

Thanks Dean.

Our next question comes from Jeremy Tonet from Jpmorgan. Your line is open. Please go ahead Jeremy.

Hi, good morning.

Hey, Jeremy Jeremy.

So maybe following up a little bit here I appreciate where we are in the Carolinas RFP process, but could you share any.

We're also going to have to have overrun protection from the federal government or others to be able to protect our customers and our investors from any overruns on these projects.

High level thoughts coming into the filing here beyond nuclear just wondering if there's any other points you would like to highlight.

And then lastly, we're going to have to have a means to make sure that we're protecting the balance sheet as we're building. These facilities. So we get those items resolved we're still looking at.

Yes.

Following that in October again, we're looking at all will be above.

<unk>.

With the new Bill.

70% of carbon.

Solar gas.

And move that out, but we've always been focused on reliability and affordability is being done to the regulators for what we put in our plan. So youll see a lot of the same that you've seen in the previous our IRB is around gas batteries.

<unk> and <unk>.

Getting everything that we can out of our current assets.

Great.

Makes sense. Thank you appreciate it.

Thanks Dean.

Upgrades that I mentioned earlier as well as continued solar as we move forward.

Our next question comes from Jeremy Tonet from Jpmorgan. Your line is open. Please go ahead Jeremy.

We are looking at nuclear when that makes sense like I mentioned, just a minute ago, but a lot of things we will have to be determined before we go forward with that.

Hi, good morning.

Hey, Jeremy Jeremy.

Okay.

So maybe following up a little bit here I appreciate where we are in the Carolinas RFP process, but can you share any.

Got it that's helpful. There, Thanks, and I was just wondering as far as current.

High level thoughts coming into the filing here beyond Nucor, just wondering if theres any other points you'd like to highlight.

Load trends are progressing through the quarter I was wondering if you could provide us just maybe a little bit more detail on what you see on the ground ahead of you that gives you confidence in the full year guide at this point.

Yes, we'll be following that in October again, we're looking at all will be above.

Yes, Jeremy I'll take that this is Brian.

With the new Bill.

70% carbon.

We knew we had a tough comp in Q2 of 2024 was a strong quarter largely in residential growth in Q2 of 2024 was over 2% and total retail growth that Duke was one nine so we had a we had a big comps that we expected.

Moves that out, but we've always been focused on reliability and affordability is being done to the regulators for what we put in our plan. So you'll see a lot of the same that you've seen in the previous our IRB is around gas batteries.

Upgrades that I mentioned earlier as well as continued solar as we move forward. We are looking at nuclear when that makes sense like I mentioned, just a minute ago, but a lot of things we will have to be determined before we go forward with that.

To be.

Behind Q2 of 2024.

But what we're seeing with some of our larger customers.

A very cautious stance alright.

For all of uncertainties that are range from tariffs.

Got it.

As tax policy has been being worked real time in the quarter and alike.

Helpful. There. Thanks.

Just wondering as far as current.

Those customers are.

Not not.

Over producing if you will they're just being very cautious when they have firm orders theyre running to those firm orders. So we're in close contact with these customers as we always are.

Yes, Jeremy I'll take that this is Brian.

We expect and some of these uncertainties get settled I mean, theres a lot of progress on the tariff front that's happened in recent weeks.

That gets more firmed up these customers that have more confidence in their supply chain and what that cost might be on their side. So that gives us and we're tracking in line with the one 5% to 2% growth. This year and we do think this is more of a transit transit item.

Behind Q2 of 2024.

Got it that's very helpful context. Thank you.

But what we're seeing with some of our larger customers.

Yeah.

A very cautious stance alright.

Our next question comes from Anthony Berdahl Mizuno.

Swirl of uncertainties that are range from tariffs.

Your line is open. Please go ahead.

As tax policy has been being worked real time in the quarter and alike.

Hey, good morning, guys, just a heads up mizuno shelf sporting equipment, but.

Those customers are.

Congrats on that transaction.

Not not.

Sure.

Over producing if you will they're just being very cautious when they have firm orders theyre running to those firm orders. So we're in close contact with these customers as we always are and we expect and some of these uncertainties get settled I mean, theres a lot of progress on the tariff front. That's happened in recent weeks as that gets more firmed up these customers.

Curious on the selection process.

<unk>, the Florida subsidiary, not Ohio, or Carolina, or South Carolina, what made the company leaned towards that 20% sale in Florida.

Good morning, Anthony and good to hear from you, we don't need a sporting goods right now.

Have more confidence in their supply chains, and what the cost might be on their side. So that gives us and we're tracking in line with the one 5% to 2% growth. This year and we do think this is more of a transit transit item.

Yeah.

We look at our entire portfolio and we look at where we can get the best value.

On an efficient use of raising funds in Florida fit that bill, it's a premium asset and obviously bar valuation, we got a premium price for it.

Got it that's very helpful context. Thank you.

Thank you.

So it was a natural fit.

Our next question comes from.

So a great jurisdiction to do business in and I think people realize that and we had a lot of interest in that.

Anthony Attardo Mizuno.

Your line is open. Please go ahead.

Hey, good morning, guys, just a heads up mizuno shelf sporting equipment zero, but.

Great. That's all I had congrats again.

Thanks Anthony.

Congrats on that transaction.

Sure.

Our next question comes from Carly Davenport Goldman Sachs. Your line is open. Please go ahead.

Curious on the selection process.

The Florida subsidiary, not Ohio, or Carolina, or South Carolina, what made the company leaned towards that 20% sale in Florida.

Hey, good morning, Thanks for taking the questions.

Maybe just on the Amazon announcement that you mentioned.

North Carolina can you just provide any color on how we should think about the timing of those investments and the impact it could have on your capex expectations is that something that we should expect to be included in the capital plan update on the <unk> call.

Good morning, Anthony and good to hear from you, we don't need any sporting goods right now.

[laughter].

We look at our entire portfolio and we look at where we can get the best value.

Yes, good morning <unk>.

Inefficient use of raising funds in Florida fit that bill, it's a premium asset and obviously bar valuation, we got a premium price for it.

Amazon deal was a big deal for us.

It does have ramping like all of these data centers do so it will start coming in.

In the 27, 28 timeframe and that will ramp in through the next the beginning of the next decade.

So it was a natural fit.

So a great jurisdiction to do business in and I think people realize that and we had a lot of interest in that.

We anticipate that they will also look at ways to add to it.

Typically when they build a data center campus they have plans for longer term as well. So we anticipate some additional items coming in towards the middle part of the 2000, <unk> as well from them, but youll see youll see a ramp in that will be built into our plans as we Europe needs.

Great Thats, all I had congrats again.

Thanks Anthony.

Our next question comes from Carly Davenport Goldman Sachs. Your line is open. Please go ahead.

Hey, good morning, Thanks for taking the questions.

Maybe just on the Amazon announcement that you mentioned in North Carolina can you just provide any color on how we should think about the timing of those investments and the impact it could have on your capex expectations is that something that we should expect to be included in the capital plan update on the <unk> call.

Great. Okay. Thank you for that and then just one quick one on the Brookdale transaction. I think you had mentioned that there is an option for them to fund. The total investments sooner is that something that's just up to their discretion or are there any sort of considerations are gating factors there to keep in mind.

Yes, it is up to their discretion. They do have to do it quarterly and they have to notify us if theyre going to do that but what we've laid out in our plans.

Yeah, good morning <unk>.

The Amazon deal was a big deal for us.

It does have ramping like all of these data centers do so it will start coming in.

Is laying out the basis, we've announced with the tranches.

In the 27, 2008 timeframe and that will ramp in through the next the beginning of the next decade.

Okay. Okay. Thank you so much.

We anticipate that they will also look at ways to add to it.

Our next question comes from Andrew Weisel.

Deutsche Bank your line is open.

Go ahead.

Hey, good morning, everyone. Congrats on all the updates and appreciate all the information.

Maybe this is Jimmy Andrew what was the.

What was the impetus for the sale was it wanting to improve the balance sheet, where you're looking to unlock more capex or something else. Just wondering what drove the decision, especially as they were back to back like this.

Or updates.

Yes, I would say Andy it's we always look for the most efficient ways to fund our growth and we have so much growth ahead of us.

Yes, it is up to their discretion. They do have to do it quarterly and they have to notify us if theyre going to do that but what we've laid out in our plans is laying out the basis, we've announced with the <unk>.

We're adding the 4 billion. So it allows us in Florida to maximize that opportunity and grow that utility at its potential so.

That led us to those fundings as well as what we're focused on with the generation build in the data centers that are coming to our states. It really gives us an efficient way to fund that growth and really supports our balance sheet into the future and allows us to earn that 5% to 7% and at that top half in the back half of the plan.

Tranches.

Okay. Okay. Thank you so much.

Our next question comes from Andrew Weisel from Scotia.

<unk> Bank. Your line is open. Please go ahead.

I would build on that Andrew.

Hey, good morning, everyone. Congrats on all the updates and appreciate all the information.

And our capital allocation process, we were making choices and.

Maybe this is Jimmy Andrew what was the.

Thats holding back some of these businesses to grow at their full potential and we have full faith inspire is going to take the Tennessee business and grow it to the level and can grow we were having to rotate capital from Tennessee into other areas because of the generation modernization effort as well as Florida. So yes, I'd say this unlocks the portfolio.

What was the impetus for the sale.

Wanting to improve the balance sheet, where you're looking to unlock more capex or something else just wondering what drove the decision, especially as they were back to back like this.

Yes, I would say Andy it's we always look for the most efficient ways to fund our growth and we have so much growth ahead of us.

We'll own going forward and it was a very attractive capital recycling opportunity on both fronts.

We're adding the 4 billion. So it allows us in Florida to maximize that opportunity and grow that utility of its potential so that led us to those fundings as well as what we're focused on with the generation build in the data centers that are coming to our states. It really gives us an efficient way to fund that growth and really supports our balance.

Okay that makes a lot of sense, then forgive me if I missed it but the $4 billion upside to Capex is that entirely going to Florida and if so can you give us any details on the timing and what types of investments that's going to be going into.

She'd into the future and allows us to earn that 5% to 7% and at the top half and the back half of the plan.

Yes that is all in Florida, and I would think about it at the end of our multiyear rate plans. So starting with our next multiyear rate plan, which will be 28, and 29 is when those investments would go in.

Okay.

Would build on that Andrew.

Yes.

And our capital allocation process, we were making choices and.

There'll be grid investments generation investments ways to serve our customers better and handle the growth that Florida has experience in it as well.

Thats holding back some of these businesses to grow at their full potential.

We have full faith inspire is going to take the Tennessee business and grow it to the level. It can grow we were having to rotate capital from Tennessee into other areas because of the generation modernization effort as well as Florida. So yes, I'd say this unlocks the portfolio, we will own going forward and it was a very attractive capital recycling.

Okay.

All of the above and more of everything kind of story.

That's a good way to think about it.

Okay, Great and one last one if I may I see the slide still stay targeting 60% to 70% dividend payout ratio with a stronger balance sheet and pointing to a little bit faster earnings growth any thoughts on the pace of dividend growth.

Opportunity on both fronts.

Any philosophical tweak to the thinking there.

Andrew we like the growth the last couple of years, our board has approved a 2% growth in the dividend we feel like that's appropriate given the capital allocation and investment cycle. We are.

Yes that is all in Florida, and I would think about it at the end of our multi year rate plans. So starting with our next multiyear rate plan, which will be <unk> 28, and 29 is when those investments would go in.

<unk> and into <unk>.

So we will continue to drive down the payout ratio is that.

That level of dividend growth.

Remains through the planning period.

There'll be grid investments generation investments ways to serve our customers better and handle the growth that Florida has experience in it as well.

Very clear. Thank you so much guys I appreciate it.

We currently have no further question. So at this time I'd like to talk about the Harris <unk> Harris for some closing remarks.

Sort of all of the above more of everything kind of so sorry.

That's a good way to think about it.

And thanks to all I, just wanted to wrap up todays call by saying, we're entering the second half of the year with a strong momentum a very clear strategy and a team that continues to deliver.

Okay, Great and one last one if I may I see the slide still state targeting 60% to 70% dividend payout ratio with a stronger balance sheet and pointing to a little bit faster earnings growth any thoughts on the pace of dividend growth.

We have materially improved our credit profile and our financial results reflect the strength of our business and the outcomes we have achieved.

Any philosophical tweak to the thinking there.

We're very confident in our ability to meet the evolving needs of our customers, while delivering long term value to our shareholders wanted to thank you again for joining us today and for your investment in Duke energy.

Andrew we like the growth the last couple of years, our board has approved a 2% growth in the dividend we feel like that's appropriate given the capital allocation and investment cycle, we're tacking into.

This concludes today's call. We thank everyone for joining you may now disconnect your lines.

So we will continue to drive down the payout ratio is that that.

That level of dividend growth.

Remains through the planning period.

Very clear. Thank you so much guys I appreciate it.

We currently have no further questions at this time, all the time about the Harris <unk> Harris for some closing remarks.

Thanks, Joe I, just wanted to wrap up todays call by saying, we're entering the second half of the year with a strong momentum a very clear strategy and a team that continues to deliver.

We have materially improved our credit profile and our financial results reflect the strength of our business and the outcomes we have achieved.

This concludes today's call. We thank everyone for joining you may now disconnect your lines.

[music].

Okay.

Yes.

Q2 2025 Duke Energy Corp Earnings Call

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