AGM 2019

May 2, 2019

Good afternoon, everyone, and welcome to the 2019 Annual Meeting of Shareholders. I'm Michael Callahan, and I'm Vice President of Investor Relations for Duke Energy. Thank you for joining us by webcast or the toll free number we provided in advance. I'm pleased to welcome our shareholders from around the world. Today's meeting is being recorded and will be available through our website. Let's begin by reviewing today's agenda. In a moment, I'll introduce Lynn Good, our Chairman, President and CEO to call the meeting to order and facilitate the business portion of the agenda. Lynn will also provide an update on the company, followed by a question and answer session. You may submit questions using the text box on the web portal. Today's discussion will forward looking information and the use of non GAAP financial measures. You should refer to information contained in our 2018 Form 10 ks concerning factors that could cause future results to differ from this forward looking information. A reconciliation of non GAAP financial measures can be found on the Investor Relations section of our website. Now, it is my pleasure to introduce Lynn Good. Mike, thank you and good afternoon everyone and welcome to the 2019 Annual Meeting of Shareholders. Legal notice of this meeting has been duly given, a quorum is present and the meeting is now lawfully convened for the transaction of business. You should see a vote button on your computer screen. The polls are now open and you can cast your ballot at any time. We're hosting this meeting online for the 3rd straight year and it has been very well received. This platform gives our shareholders worldwide equal opportunity to ask questions and participate in the governance of Duke Energy. And as in previous years, we are running this meeting with the level of transparency and accountability our shareholders expect from Duke Energy. So again, welcome to the meeting. With that, the meeting will please come to order. Like all of you, our directors are gathered together and participating online, along with our independent auditors, Deloitte and Touche. In addition, Broadridge Financial Solutions has been appointed to act as Inspector of Elections. Jan Castillo from Broadridge is here with us today and has taken the oath of Inspector of Elections. David Fountain is our Senior Vice President, Legal, Chief Ethics and Compliance Officer and Corporate Secretary. Today, he also acts as the secretary of this meeting. David will report the number of shares entitled to vote and the number of shares and votes represented in person or by proxy at this meeting. So David, let me turn it over to you. Thank you very much, Lynn. As of the close of business, on March 4, 2019, Duke Energy Corporation had outstanding and entitled to vote 727,000,000 645,547 shares of common stock, each of which is entitled to one vote. There are here represented by proxy, 632,000,000,935,515 shares of the corporation's common stock, which constitute 86.98 percent of the total shares entitled to vote at this meeting. The final reports of the Inspector of Election will include the votes, if any, of the shareholders voting through the web portal. Lynn, let me turn it back to you. Yes, David, thank you. Let's proceed with the matters to be voted on. The first management proposal is the election of the Board of Directors. We have a declassified Board, which means that all of the directors stand for election every year at the annual These nominees whose bios begin on Page 9 of the proxy statement are presented for the purpose of voting for their election as directors. Michael Browning, Chairman of Browning Consolidated and our Independent Lead Director Annette Clayton, President and CEO, North America Operations of Schneider Electric Ted Craver, retired Chairman, President and CEO of Edison International. Rob Davis, CFO and Executive Vice President, Global Services for Merck and Company Dan D'Amico, Chairman Emeritus, Retired President and CEO of Nucor Corporation John Herron, Retired President, CEO and Chief Nuclear Officer of Entergy Nuclear Bill Kennard, Co Founder and Non Executive Chairman of Velocitas Partners Marie McKee, Retired Senior Vice President of Corning Incorporated Wick Morman, Senior Advisor to Amtrak Maria Rose, Vice President and Chief Administrative Officer, Cummins Carlos Saladregas, Chairman of Regis HR Group Tom Skanes, retired Chairman, President and CEO of Piedmont Natural Gas and Bill Webster, retired Executive Vice President for the Institute of Nuclear Power Operations. They have been nominated for election as directors for 1 year terms expiring in 2020. I'd also like to pause for a moment and recognize John Forsgren and Jim Heiler, who are retiring at the end of today's meeting. I'd like to thank them both for their outstanding service to our company and wish them the very best. There are 2 additional management proposals being presented for approval. Proposal 2 is the ratification of Deloitte and Touche as Duke Energy's independent registered public accounting firm for 2019 as stated on Page 33 of the proxy statement. Proposal 3 is a vote on an advisory basis of our named executive officer compensation as disclosed on Page 35 of the proxy statement. Also to be presented are 4 proposals we received from shareholders, which David will now introduce. So David, I'll turn it to you. Thank you, Lynn. Each proponent has elected to pre tape statements in support of their proposal. I would like to remind shareholders that each of the proponents statements are their own and do not represent the views of Duke Energy. The first shareholder proposal identified as Proposal 4 in the statement beginning on Page 67 relates to a request for a semi annual report on Duke Energy's political contributions, Presenting on behalf of the proponent, the State of New York Office of the State Comptroller is their Director of Corporate Governance, Patrick Dougherty. Mr. Chairman, my name is Patrick Dougherty, and I'm speaking today on behalf of the New York State Common Retirement Fund to present our funds resolution calling on Duke Energy to fully report on its political spending and its process and procedures for making political contributions with corporate funds. As long term shareholders of Duke Energy, our fund supports policies that apply transparency and accountability to corporate political giving. In our view, such disclosure is fully consistent with public policy in regard to public company disclosures. Company executives exercise wide discretion over the use of corporate resources for political purposes and relying only on the limited data available from the Federal Election Commission and the Internal Revenue Service can give shareholders an incomplete picture of the company's political spending. Our New York State Fund believes that a complete disclosure by the company is necessary for shareholders to be able to fully evaluate the political use of corporate assets. And therefore, on behalf of the New York State Common Retirement Fund, holder of 1,709,000 500 Duke Energy Shares, I submit the resolution on political disclosure found in your proxy materials. Thank you. The next shareholder proposal identified as Proposal 5 beginning on Page 69 of the proxy statement relates to an annual report on the corporation's lobbying expenses. Presenting on behalf of the proponents, Mercy Investment Services and the Sisters of St. Francis of Philadelphia is Susan Makos, Vice President of Social Responsibility. Good afternoon. I am Susan Makos, Vice President of Mercy Investment Services. On behalf of Mercy Investments, currently owning more than 10,000 shares of Duke Energy and the Sisters of St. Francis of Philadelphia, I hereby move proposal number 5, a proposal recommending that Duke Energy provide a detailed report of all state and federal lobbying expenditures, including expenditures that fund lobbying through trade associations, which actively lobby on issues which can affect our company's long term interests. This proposal is not asking our company to stop its participation in political or lobbying activities that serve our company's interests. Rather, it requests the company to provide sufficient information to shareholders to determine if corporate assets are being used to promote public policy objectives, which may pose reputational or financial risks to our company. Duke Energy states on its website that the company is committed to a lower carbon future and states we're dedicated to reducing our greenhouse gas footprint through our air and climate change initiatives. As shareholders, we commend the company on its commitment to addressing the environmental impacts of company operations. The resolution asks the company to improve its disclosure on lobbying activities, both direct and through trade associations, to trade associations that are used to lobby on their behalf and these trade associations spend 100 of 1,000,000 to lobby. For example, our company is a member of the U. S. Chamber of Commerce, which spent more than $94,000,000 lobbying in the 2018. The U. S. Chamber for many years has lobbied against effective climate change regulations. Duke Energy is also a member of several trade associations whose position on climate change and climate policy do not align with our company's stated commitment to a lower carbon future, such as the Edison Electric Institute. For 2018, publicly available reports state that Duke Energy spent more than $5,300,000 on lobbying of Congress and federal agencies. Yet Duke's 2018 lobbying expenditure reports names only the U. S. Chamber and the Indiana Energy Association as receiving a total of $214,000 This disclosure represents only 4% of the over $5,000,000 spent by our company on federal lobbying. While we acknowledge the company's new commitment to publicly identify trade associations, receiving federal lobbying financial support exceeding $50,000 This new disclosure is insufficient to provide a good picture of the significant dollars being spent by the company for federal lobbying and the lobbying efforts being funded. In addition, Duke Energy spends significant company funds to support lobbying in the different states where it operates. Without clear reporting, shareholders are not able to understand if company's funds are promoting public policy objectives, which pose risks to Duke Energy's reputation to the detriment of our shareholder value. In closing, we urge all shareholders to vote for this proposal. The next shareholder proposal identified as Proposal 6 beginning on Page 71 of the proxy statement relates to a report on mitigating health and climate impacts of coal use. Presenting on behalf of the proponents, Andrew Behar and the daughters of Charity, Province of St. Louise is Lila Holzman, the Energy Program Manager for As You Sow. To the Duke Energy Board, shareholders and management team, my name is Laila Holzman, and I would like to thank you for the opportunity to present shareholder proposal number 6. This proposal was submitted on behalf of As You Sow and the Daughters of Charity, Province of St. Louis. It requests a report on how Duke Energy is mitigating the health and climate impacts of its coal use. The burning of coal results in a range of harms to public health, including water contamination, poor air quality, climate change. Coal burning results in coal waste, also called coal ash, which is laced with heavy metals like arsenic, lead and mercury, pollutants that can contaminate water and raise cancer risk for nearby communities. A recent report from the Environmental Integrity Project on groundwater contamination contamination at coal ash storage sites across the country ranks Duke's Allen Steam Station as the 2nd most contaminated site in the nation with cobalt, heavy metal linked to thyroid damage and nearby groundwater at 500x safe levels. As importantly, climate change is resulting in increased intensity and frequency of extreme weather events, including storms and flooding. 2 major storms in the past 3 years, Hurricane Matthew and Hurricane Florence, wreaked havoc across Duke's service territory and infrastructure, resulting in brand damage, harm to water bodies in the local environment and 1,000,000 of dollars in costs borne by shareholders. Duke's compliance with bare minimum regulations has done little to counter concerns from investors, stakeholders and the public about the harm its practices can cause to nearby communities. Duke has continued to advocate for capping in place some of its remaining coal ash ponds despite strong public opposition. It has also spent 1,000,000 in recent years opposing better protections for coal plant emissions and waste management. The North Carolina DEQ recently ordered the company to completely excavate all coal ash ponds in the state, highlighting the high risk and cost of the company's current go slow approach to coal ash management. We hope that Duke will take the opportunity to expedite the adoption of best practices across all states in which it operates. Despite clear risks, Duke remains inexplicably committed to coal. Duke is one of the largest electric power generators in the United States and its generation continues to rely heavily on coal. As long term investors in Duke Energy, we are concerned that the company is not adequately managing public health impacts and risks to the company's reputation and business from its past and continued coal use, nor is it adequately addressing the reality of climate change. The time for Duke to show that it will move beyond coal and join peers in providing clean energy that is safer for communities and safer for the environment. Thank you for your time today. Juan? The final shareholder proposal identified as proposal 7 beginning on Page 73 of the proxy statement relates to a report on the costs and benefits of Duke Energy's voluntary environment related activities. Stephen J. Malloy is the proponent, and he elected to pre tape the following statement. Good afternoon, fellow shareholders. I am Steve Molloy, and here is my proposal. The purpose of Duke Energy is to make money by generating affordable and reliable electricity for customers while obeying the law. Coal plants are the cheapest way to generate electricity and burning coal in a modern coal plant is clean, yet management intends to close Duke's coal plants. By doing so, management hopes to somehow alter whatever global climate change may or may not be occurring. This proposal is intended to help shareholders monitor whether Duke's extensive voluntary activities related to the climate and environment are actually producing meaningful benefits to customers, shareholders, the public health and the environment. Corporate management sometimes engage in what I call greenwashing. They spend shareholder money on schemes that appear to be related to the environment. But these schemes are really undertaken merely for the purpose of polishing management's public image. Greenwashing harms shareholders by distracting management, wasting corporate assets, ripping off customers and deceiving shareholders and the public. I believe, for example, that Duke management is greenwashing by pretending that there are benefits from closing coal plants and cutting carbon dioxide emissions. Management recently claimed that it had cut carbon dioxide emissions by 31% since 2,005. No law required these cuts. What did they accomplish? Anything? Nothing? Who knows? Shareholders should have an honest accounting of the actual benefits of the emissions cuts. The emphasis here is on actual benefits, not hypothetical, pretend or imaginary benefits. After all, Duke's unilateral emissions cuts are not an obvious benefit to anyone or anything. Management now says its goal is to reduce CO2 emissions even more. Still, no law requires this action. What will the actual benefits be to anyone or anything? Global carbon dioxide emissions are higher now than ever and increasing with no end in sight. China is building coal plants equal to the entire U. S. Coal fleet. Around the world, there are 1100 coal plants under construction. In comparison, Duke operates a mere 14 coal plants. So what are the actual benefits to customers, shareholders and the environment of meeting Duke Management's goal? By how much? In what way? And when will Duke's emissions cuts alter climate change? I don't believe there are any benefits to be had by closing Duke's coal plants. It's all pain and no gain for all concern except, of course, for our greenwashing management hoping to get patted on the back for its political correctness. Customers will pay higher rates for no purpose. Customers, regulators and investors will continue to be deceived about the purpose and effects of the emission cuts. This is bad business. It is dishonest business. If management disagrees, and we know it does because it opposes this proposal, let them show us their math. Until they do, we can only assume that they are greenwashing. Nothing good will come from this If you have not already voted your shares or if you'd like to change your vote, you may do so by clicking on the voting button on the web portal and following the instructions there. The polls will remain open for the next several minutes until the question and answer session begins. So now let me turn it back over to Lynn. David, thank you. And I wanted to spend a few minutes sharing a brief business update as 2018 was another very strong year for Duke Energy. Starting with our financial performance, we finished the year within the top half of our original guidance range. This was driven by strong results from our electric, natural gas and commercial renewables businesses, As well, our long term growth capital plan and cost management continue to generate positive financial results. Our stock performed well as our total shareholder return outperformed the Philadelphia Utility Index. We increased our dividend by 4.2 percent last year and 2019 marks the 93rd consecutive year that we've paid a cash dividend. We will continue growing our dividend as we look to return value to our shareholders. This past year, we responded to federal tax reform, ensuring the laws benefits flow to our customers, while also maintaining our balance sheet and credit quality. We issued $2,000,000,000 of common equity and worked with regulators to address the effect on customers' rates from the new law. Our performance gives us confidence as we grow the company and execute our long term strategy, which is our roadmap to bring value to our shareholders and our customers. That strategy starts with our customers because for us to win, we must put them at the center of everything we do. In 2018, we focused on turning data into results, helping provide more value to our customers. Already we've used data to improve how customers pay their bills, report outages and start service. In addition, we've recently launched several mobile apps, giving customers more control and access to information right on their smartphone. We saw improvements across almost all of our jurisdictions in our J. D. Power scores for exceed our customers' expectations, we're creating a more modern intelligent grid that is more resilient, secure and reliable. Across our footprint, self healing technologies have prevented more than 700,000 extended power outages in 2018. And our technology prevented 80,000 extended outages during Hurricane Florence and gave us better information to expedite restoration following this storm. In addition, more than 62% of our alerts. We remain on track to have smart meters fully deployed in all of our jurisdictions by year end 2021. And increasingly, the power we transmit over the grid is cleaner. Over the past year, we continue to transition from coal to natural gas, expand our renewable energy while efficiently carbon emissions by 40% from our 2,005 carbon emissions by 40% from March 2,005 levels by 2,030. We brought 2 combined cycle natural gas plants online and we'll bring a third online by the end of 2019. We also remained one of the nation's largest renewable energy providers. By year end, we owned or purchased a total of 7,100 Megawatts of wind, solar and biomass energy, enough to power 2,000,000 homes. We have connected more than 2,500 megawatts in the Carolinas over the past 4 years, helping keep North Carolina second in the nation for overall solar power capacity. And in Florida, we're adding 700 megawatts of solar in the state. We expanded our commercial renewables footprint to 14 states last year and we're pursuing new opportunities in this growing segment. In addition, we outlined plans for $500,000,000 in battery storage projects in the Carolinas over the next 15 years. But even as we invest in new sources, nuclear power remains fundamental to our success. That's why we continue evaluating subsequent license renewals for our nuclear fleet for an additional 20 years of operation. Also making progress expanding our natural gas infrastructure. In 2018, we retrofitted 2 coal units to run on natural gas. We also announced plans to build a liquefied natural gas facility helping Piedmont natural gas meet demand during peak usage days. Importantly, we worked diligently to complete the Atlantic Coast pipeline. Unfortunately, legal and permitting challenges have stopped major construction activity, but let there be no doubt that we remain committed to this project. It will bring much needed natural gas supplies to the Southeast as well as economic growth in rural areas of this region. As we execute our strategy, reliable operations are foundational to our company's success. And this starts with safety, because we will not be successful without our steadfast focus on the safety of our employees and the environment. I'm proud that our employees maintained our industry leading performance for a 4th straight year. In 2018, our generation fleet continued to perform well. Our nuclear fleet's capacity factor was 93%, marking the 20th consecutive year that our fleet's capacity factor has been above 90%. However, our ability to deliver operational excellence was tested by hurricanes Florence and Michael. Our employees restored 3,000,000 outages, handled over 3,000,000 calls and sent over 27,000,000 emails and text messages to our customers. I cannot thank our employees enough for their incredible work to support our customers. Operational excellence also underpins our focus on environmental stewardship and coal ash. This is an important topic, which I'll talk more about during Q and A, but I'm very proud of our progress as we permanently closed every ash basin to protect people and the environment while keeping costs affordable. Since the company was founded in 190 4, we have been an active partner in our communities. Our employees continued this proud tradition last year. In 2018, Duke Energy helped attract $5,300,000,000 in capital investment and created 14,000 jobs. In addition, the Duke Energy Foundation donated more than $31,000,000 and our employees and retirees volunteered over 126,000 hours. As well, our workforce has embraced our digital transformation, responding to the changing needs of our business and our customers. In closing, I want to say that 2018 was a powerful chapter in our company's history and I'm excited about what lies ahead. By executing our strategy, we will deliver the value our customers look for from their energy provider. We will have more technology making our system smarter, cleaner and more efficient. And we'll build on strong relationships to ensure we're delivering on the expectations our customers and stakeholders have for Duke Energy. Now that the polls are closed, I'll ask David for the Inspector of Elections report before I answer your questions. David? Thank you, Lynn. Based on the proxies received, each nominee for Director has been elected by over 95% of the shares voted. Congratulations to each of our directors and thank you for your service. The ratification of Deloitte and Touche as Duke Energy's independent registered public accounting firm for 2019 has been approved with approximately 96% of the vote. The advisory vote on our named executive officer compensation has been approved with approximately 92% of the vote. Shareholder Proposal 4, seeking a report on Duke Energy's political contributions has failed, receiving approximately 35% of the vote. Shareholder Proposal 5 seeking a report on Duke Energy's lobbying expenses has failed receiving approximately 36% of the vote. Shareholder Proposal 6, seeking a report on mitigating health and climate impacts of coal use, has failed, receiving approximately 41% of the vote. Finally, shareholder proposal 7, seeking a report on the costs and benefits of Duke Energy's voluntary environment related activities has failed, receiving approximately 4% of the vote. Lynn? David, thank you. The final reports of the Inspector of Election are ordered to be filed with the minutes of this meeting. So the meeting is adjourned. And now I'd like to answer some of your questions. So Mike, I'll turn it to you. Well, very good. Thank you for that, Lynn. So this is our 3rd meeting with this format and I've come to actually start looking forward to it because I get to be the voice of our shareholders today. And so let me just start by reminding our shareholders that I'm asking your questions. I'm going to ask them exactly as they submitted them. I'm going to read them, give you a chance to respond, Lynn. And of course, we'll answer all of the questions that we don't get to hear today online and put that on our website very soon as we've done in the past. So let's go ahead and jump into some of the questions. I've been looking at the queue while we've been sitting here. We have a range of topics again like we've had in the past couple of years, topics like compensation, diversity, retirement benefits. And of course, we have several questions on the environment here. And I'm going to start with a couple on climate change specifically. Let me read the first one here from a shareholder who asks, 3 investor owned utilities, Xcel, Avista and PNM have already committed to full decarbonization by 2,050 or even sooner. When will Duke be doing the same? And let me ask one more here. Duke Director, Daniel D'Amico called the 2015 Paris Climate Agreement a government money grab and said that reducing CO2 emissions is not a serious problem. Why does Duke believe it is appropriate for him to serve on the corporate governance committee and oversee the company's sustainability and political spending efforts? Now we had some more questions, one in fact from a shareholder that maybe disagrees with our strategy around climate change. But why don't I let you respond to these questions? Sure. And Mike, it's an important topic and it's a topic that we feel very deeply about. We're committed to progress on reduction of carbon emissions. We think climate change is important to our customers, to our communities we serve, our policymakers, our stakeholders. And I believe our track record here is a very strong one. I talked in my remarks about the fact that we are committed to a 40% reduction by 2,030 and that is in fact ahead of the pace of the clean power plan requirements that you all may remember and it's also on pace for the 2 degree scenario within the Paris Accords. So I want you to hear clearly that we are committed to reducing carbon in a way that makes sense, not only for the reliability of the system and affordability, but also demonstrating progress on carbon. We also took the step of issuing a climate report last year, Mike, that talks about what we believe needs to happen between 2,030 and 2,050. As we look over that longer term period, we do not believe we have all of the tools necessary and are a strong supporter of research and development for carbon capture, small modular nuclear battery technology and technologies which we may not even know of today that will help us continue to make the progress that I know we expect and our customers and our stakeholders are counting on. So as we continue on this journey, we'll continue to look for ways that we can talk further about climate change. We're looking at our goals as we move forward and we'll continue to be very active in reducing carbon across our footprint. So something that we obviously spend time thinking about balancing a lot of priorities here. I always find it interesting when we meet with shareholders, there's a lot of different viewpoints on this topic. So I appreciate you providing ours. I'm want to move on to a question we received on coal ash. So another topic that we've covered in the last couple of annual meetings, an area where we certainly as the Duke team has been extremely focused, particularly this year as we're working in our home state of North Carolina around the specific closure options. The question the shareholder asks is why are the shareholders and customers being asked to pay for bad decisions by Duke executives concerning ash removal? I know coal ash is a topic not only in North Carolina, but throughout the U. S. Because all utilities who've operated coal over many decades are working actively to close basins. And I'm very proud of the work that Duke Energy has completed in this area. And I really want to set the record straight here because I think there's so much misinformation. We have been conducting our activities and operations around our coal plants in accordance with a very strict state and federal laws and permits and oversight throughout many decades. And the impact of our operations and the nature of our operations have been well understood there are changing expectations around coal ash. We complied with Clean Water Act and Clean Air Act back in the 90s early 2000s. Now it's coal combustion residuals and in North Carolina, Cama. And so our commitment to continue to close basins in accordance with these laws is undeterred and we will do so striking a balance on ensuring safety of the environment, but also looking for ways that we can complete this work in a way that's affordable to our customers. The issue of who pays, I think, is always a topic and I would suggest that this is something that has been through a very public process over a long period of time where the cost of a utility's operations, our cost of service, whether it's building power plants, whether it's generating power, whether it's decommissioning, will come before a very public process in our states in front of our regulatory commissions and it will be their decision on whether those costs have been prudently incurred in order for them to be included as part of the price of electricity. But I'll close with our commitment, which is to safe operations of our basins and closing them as rapidly as can in a way that ensures safety and also affordability. So you certainly covered how we're thinking about closing NASH basins. You talked about cost recovery. Did you want to address the North Carolina determination at all around excavation? Certainly a topic here in North Carolina. We received an order from the Department of Environmental Quality on April 1 requiring excavation of a number of basins that had been ranked low risk by the same agency. And we are appealing this ruling because the ruling actually requires the most extreme measure, the most costly measure to close low risk basins without incremental environmental benefit and without consideration of the additional environmental impact of leaping the basins open and excavating them over decades. And so I believe this is such an important topic that we should continue to have discussions on the right approach. Again, safety paramount, safety of the environment, safety of our communities, but also ensuring that science and engineering are bringing us to conclusions that make sense on this important topic and keeping an eye on affordability for our customers. Appreciate your comments on that. I know it's something that's on the mind of our shareholders, many of which live in North Carolina and our customers as well. So appreciate that. I want to move on to another question we have here from one of our retirees. We often have questions from retirees at our shareholder meeting. As you mentioned, they're very active with us still in the community and many remain shareholders well into retirement. The question that is asked here is about retirement benefit specifically and the question reads, why is there no cost of living applied to Duke retirements? Well, I appreciate that Mike and appreciate very much the retirees of Duke Energy. As I talked in my remarks about their ongoing commitment, not only to the company, but to our communities, they've been very active in volunteer work and really supporting the efforts of the company over a long period of time. And we take our responsibilities around retirement benefits very seriously. And often when I see retirees, their advice to me is to keep the dividend coming. Absolutely. Because many of them are also shareholders. It is true that the retirement benefits do not adjust for inflation, but they're not intended to be all of the retirement that a retiree has at their disposal. So 401 plans, Social Security, savings, investment in stock, whether it's Duke or others, or investment in mutual funds or other things that might be in a savings portfolio, all of that is intended to place our retirees in a position where they have about 70% of a working wage available to them upon retirement. And we strongly encourage planning and have resources available to our employees so that they can plan for this important time of their life. And so I want to again thank our retirees. They're an important part of the Duke community and really a part of the legacy of the company. I would certainly echo those comments. We certainly appreciate the contributions of our retirees and our shareholders there. I'm going to move on to a question here around compensation. So I've had the privilege of working for you for the last decade and I certainly know that one of your priorities every day is that we strive for excellence. We know that assignment. We take it very seriously. And I know that in order to achieve that, you need to attract and retain the best team to do that. And compensation is one of the tools we use to do to attract that team. And so the question that this shareholder asks is Lendgood's compensation package and the bonuses for Duke's employees is obscene. Will you change it? Mike, I appreciate the compensation is an important topic and certainly on the minds of this shareholder and I'm sure many others. The proxy season brings all of that compensation information to the table in a very transparent way. And I would start with some of the comments that you made because compensation is really a tool that we use to make sure that we can attract and retain the talent necessary for the company to complete the strategy, to serve customers, to move forward, to make the investments that are important not only to our customers, but to our shareholders. And so we spend a lot of time benchmarking, making sure that our compensation appropriately attracts and retains talent as our talent and our employees have alternatives on where they can work. And as we think about the executive ranks in particular, a substantial part of the compensation is tied to performance. My compensation alone 90%, which means there are very high around customer satisfaction, safety, stock performance, reliability of our system, ability to serve our customers in hurricanes and in other circumstances. And if we perform well, we are compensated. If we don't perform well and don't meet those expectations, it is reflected directly in that compensation. And so we spend a lot of time looking at this. We will commit to continue doing that with an eye toward competitive compensation, but also setting high expectations that our customers and shareholders expect of us so that we have the right talent doing the right things. And if we do that, then everyone should win. We should have a strong company, strong balance sheet, good returns to shareholders, and importantly, reliable and affordable service for our customers. So, Amit, clearly you spent a lot of time thinking about Compensation is important. Obviously, it's very important to have that team in place. It is. I'm going to move back to a question here on the environment. And this question is actually specifically about our renewables business. And this is a business that we've been in for over a decade now, very strong set of assets, one of the largest providers of renewable generation in the country, the wind and solar assets that we have. And of course, just this past week, we entered into a partnership with a company that many of our shareholders will recognize and that's John Hancock. John Hancock. And so this question is specifically about the operational aspects of the business. And it reads, how many birds have been killed by Duke's solar and wind generation plants in 2018? Mike, this question actually came in early. We opened the website for questions in advance. And so I had an opportunity to ask our renewable team how many birds have been impacted by operations in 2018 and the answer is 250. We operate 85 sites over a very large geography, 14 states that I mentioned before. And by those standards and the scale of our operation, that take rate is low. And it is actually lower than where we were in 2017 because we continue to make investments with new technologies, looking for migratory bird patterns to minimize the impact of our operations certain times when the risk to birds and avian risk is greater. But I think this underscores a really important point, which is that every form of generation, solar, wind, natural gas, all of them have an environmental footprint. And that's certainly And that's certainly what we're doing with our wind and solar assets. So every form of generation has an impact. I'm sure that that's something that not everyone always fully appreciates. So appreciate you providing your comments on that. It's something that we have to manage and I think we manage it well. As an operator, you see the full picture and so it is true, Mike. Definitely. Yes. All right. I'm going to move to a different topic here. And it's one that we haven't had at the shareholder meeting before, but it's certainly on the minds of a lot of folks and that includes you and the Board. It's something that we've been focused on that cybersecurity. So you often read in the news about companies that have been the victim of cybersecurity. We have a very security. We have a very talented team in place that's monitoring this 20 fourseven. And this is a very technical question, so I'm just going to give a couple of definitions here before I read the big question, just to get that out of the way. One of those is CME, so that's a coronal mass ejection and then an EMP which is an electromagnetic pulse. And the question here is, how is Duke Energy addressing the issue of hardening the system to protect and who are shareholders as well and appreciate that question because it's been a topic around the impact to the electric grid of these types of events. And what it's really speaking to is how resilient is our system and are we prepared for a series of events that could unfold over time. In fact, it's been such an important topic for our industry that the industry's research arm, the Electric Power Research Institute, has just released a report specifically testing the resiliency of our grid and making recommendations on investments and steps that we could take to mitigate. And so we've been very involved in that study and have already begun making investments in order to minimize impact. But this really speaks again, I believe, to a broader issue, which is that energy delivery system is the system that we all count on for reliable energy. And it has more demands on it today than it ever has cyber and physical security risks, with storm hardening and resiliency. We learned a lot from the hurricanes. Also renewables, renewables being attached to our system in a way that creates new challenges for us. And then of course as we continue to look for ways that we can enable new customer information and interaction, that all impacts the delivery system. So Duke has been spending a lot of time thinking about how can we prioritize investments that deliver value to our customers and also strengthen that grid over time. And so we have plans in every one of our jurisdictions specifically focused on investing in the grid to address just those concerns that the shareholder raised. So really good to hear in that answer that you talked about us working with our industry peers on that because I think that's something we can all learn from each other. It's like interconnected power system. It's important. Exactly. So I'm going to move here to another I know it's a topic again that's of importance to you. And the question is, I'd like to know the percentage of women employees of color at the management and director level. Diversity and inclusion at Duke Energy is foundational to how we think about preparing and sustaining our company into the future. And I think about an industry that's going through transformation, having diverse points of view at the table and diverse teammates is going to do nothing but make us better. But I would also say that it's a journey and I'm not sure we'll ever get to exactly where we want to be because it's an ever moving and ever important topic. And so as I look at Duke today, about 23% of our workforce is female and a little less, about 18% of our workforce is a traditional definition of minority. And those percentages are ones we're working actively on to get to 20% 25% by the year 2020. And then we're working hard to think about where we should be by 2025. And I have a number of initiatives focused on the pipeline of talent coming into our company so that we have an opportunity to achieve success in that area. At the leadership level, we're slightly below those percentages. So for women, instead of 23%, we're at 20%, minorities instead of 18%, we're closer to 12%. And we're not satisfied with that. That's an area that the pipeline is particularly important so that we can continue to progress both minorities and women and create the opportunities for the diverse talent that we need to be successful in this period. So more to come on diversity and inclusion, it's front and center for the leadership of Duke Energy. So an area where perhaps more to do, we will always continue to strive to be better, but clearly a focus on that. A focus area. And Mike, I'd mentioned just for a moment, we've also been focused on diversity and inclusion at the board level. So we've had an opportunity to add a couple of additional board members as we've refreshed our board and had some retirements and have welcomed 2 women, 2 new women to the Board. And at the Board level, we're at about 40% diverse across those various areas. And so that also remains a focus, not only of the employee base, but the leadership and governance of the company. Well, another area where we always strive to be excellent in and we're always trying to do more is in the area of safety. You talked about it as being priority number 1 for the company. And we received a question here on safety. I know it's something that you are deeply committed to. And I know it's embedded within the fabric of the company. I think if you ask new employees, what is one of the key parts of our culture, they're going to talk about safety. And the question from this shareholder reads, according to Duke's 2017 sustainability report, the company had 2 deaths in 2017 and 2 life altering injuries to workers and its contracted out work force. Further, according to work zonesafety.org, there were a total of 28 fatalities in work zones in the state of Indiana in 20 17. Considering these high numbers of workplace incidents, what is the company doing to protect Flaggers at its operations in Indiana? Well, on the specific part of that question around the flaggers, I hear maybe in that question So, Mike, I'd like to take an assignment on that. But as we answer that question, So, Mike, I'd like to take an assignment on that. But as we answer that question on the website, we look into the specifics around Indiana. But I do want to take a moment to talk about safety broadly because your comments about it being foundational to the success of Duke Energy could not be more true or more emphasized than the culture at Duke. So for us, safety is foundational. We don't do anything until we ensure that we're doing it in a safe manner. And I made a comment in my remarks about Duke operating at an industry leading level on total incident case rate, which is a key measure of safety. But as mentioned by the shareholder, we have not made the progress that we'd like to make on more serious injuries and 2018 was an indication of that. And so we are redoubling as we always do. Our focus on serious injuries as well as continuing to create a safe work environment for our employees and that commitment will never change. It is front and center. Every time my staff meets on a Monday morning, the very first thing we talk about is safety, the safety of our employees, the safety of our contractors who are working on our system and then the safety of the environment and any impacts that we've had to the environment over the preceding week. So that is an unwavering commitment and a part of the culture and fabric and values at Duke Energy. I can certainly attest to that commitment. And you're right, it is something that most of our meetings at the company, we start with safety. And so appreciate your thoughts there. I want to ask a question here. It's actually a question that we've received while we've been sitting here doing the annual meeting. So the question is back on the topic of renewables. The question reads, the adoption of solar energy resourcing must require an evaluation of trade offs. Does and how is Duke Energy evaluating the apparent consumption of agricultural land, especially in Eastern North Carolina versus the usefulness that solar power in meeting other environmental questions? It's interesting in the question, Mike, the reference to land is another environmental impact. And one of the environmental considerations that we often hear about is the land usage of solar and whether that land usage is the appropriate one. And in Duke's, and I think about my responsibility and the way we think about it, we are continuing to add renewable energy consistent with what is economic for our customers, consistent with the laws and expectations in each of our states, consistent with where our policymakers, customers and stakeholders are leading us. And I think that is a topic that's going to receive increasing focus over time on how much, how much land, how much solar, to bring together a balanced portfolio that achieves those carbon reductions that are so important, receives diversity of supplies so that we continue to maintain an eye on reliability and also a focus on affordability. So we are focused on Our states will need to address how to think about how much. And we Our states will need to address how to think about how much. And we'd be delighted to be a part of that conversation because we think it's an important one as we continue to make progress to 2,030 and beyond getting the right portfolio of resources to match environment, reliability and affordability. So how much trade offs, these are all things that we have to do. We have to do and there's no perfect solution to any of this. That's right. If we had the perfect solution, I think we'd all be executing toward it. But we have changing technologies, we have changing expectations, we have considerations around price and reliability. And one of the things that we think about is that we have or we need to build transmission or we need to build transmission to make that happen. So those are all trade offs and considerations that we have to keep front and center. So we received several questions on the topic of the shareholder proposals themselves that were in the proxy and they range from, can you provide more information on the particular proposal? Can you provide the Board's perspective? I'm just going to ask one of the ones here that's representative of those questions. And it's really around all the proposals. And the question is, in the interest of transparency and accountability, I'm wondering why the Board would be against proposals 4, 5, 6 and 7 and recommend shareholders reject them. Does the company have something to hide in keeping this information secret? Thank you. Those proposals I would share with you are reviewed very closely not only by management but by our Board, our Corporate Governance Committee and then the full Board. And I believe if you look at our track record at Duke Energy, we have worked to be responsive to shareholders in many of these areas. And there's a couple of things that I would point to is we have improved, increased our transparency around political contributions and lobbying expenses consistently. And we believe that information is available and useful and front and center for customers and shareholders. And if at any point there are questions, our Investor Relations team is available if you're having trouble finding your way through those disclosures. So we evaluated it within the context of what we're providing and feel like we're really being responsive. On the issues of climate change, whole use and the variety of other items that came into some of those other proposals, I would point shareholders to 2 important documents, a sustainability report that was recently issued that covers a range of issues around sustainability and how Duke Energy thinks about it. And then the climate report that we issued last year that talks about our aspirations and goals for 2,040 and then beyond or 2,030 and beyond. And I think those documents taken together really provide a very robust disclosure on all of those topics that could be useful to shareholders who have particular interests in that area. And we really use those documents all the time with investors. I mean, you talked about sustainability report, the climate report. They're very useful for people to understand our story and what we're doing in these areas. So So I'm going to move on to our final question. And it's on the topic of taxes, which is something that sometimes is a complicated subject. But I think we have a great story to tell on this subject and in particular in relation to the question that I have here from the shareholder. It's something we spent a lot of time in 2018 on after tax reform was passed. The question reads, how is Duke Energy using the 2017 Tax Cuts and Jobs Act in its business? And what about the abundant tax credits for renewable generation? When will shareholders see those tax benefits? Tax reform for a utility is a little bit different than what you might have seen with other commercial companies who have perhaps used it for additional investment or used it for employee bonuses or variety of things. For Duke Energy, taxes are part of our cost of service. And so our customers returned to customers. And our customers through reduced electric rates and reduced electric prices. And we have worked with our regulators to not only deliver those benefits timely to customers, but also make sure that the credit strength of the utilities are maintained at the same time because writing multi $1,000,000,000 checks all at once have to be balanced with credit quality. So you also saw us in 2018 issue $2,000,000,000 of equity to prepare the balance sheet for the impacts of tax reform. And as it pertains to renewables, we continue to be an active investor in renewables and the renewable tax credits actually are used to reduce the amount of taxes that we pay and that will continue to be the case for several years to come. So I love that statistic. You think almost $1,000,000,000 going back to our customers. I mean how great is that? It's a very big number. That's all the questions that I have here today. I really appreciate our shareholders for providing such good questions and I want to turn it back to you for any closing comments. Okay. Well, Mike, thank you. And I want to thank Mike for questions and David for his role as the Corporate Secretary, Broadridge Financial Solutions for their role as well. And I want to thank all of you for joining us. We appreciate your interest and your investment in Duke Energy and hope that the questions were helpful today as we talked more real time about things that are on your mind and our commitment is to answer all of them, any that we didn't get to as well as providing written responses to all the ones that I addressed today on the website following this meeting. And so we thank you again and hope you have a great afternoon. Appreciate your investment in Duke Energy.