AGM 2018

May 3, 2018

Afternoon, everyone, and thank you for joining the 2018 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. Lynn will call the meeting to order and facilitate the business portion of the agenda, including the election of directors, 3 other management proposals and 1 shareholder proposal. 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 include forward looking information and the use of non GAAP financial measures. You should refer to information contained in our 2017 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. Lynn? Michael, thank you. Good afternoon, everyone, and welcome to the 2018 Annual Meeting of Shareholders. For the 2nd year, we're hosting this meeting online. We continue to believe that this platform gives our shareholders worldwide equal opportunity to ask questions and participate in the governance of Duke Energy. And like last year, we remain committed to running this meeting with the level of transparency and accountability our shareholders expect from us. So again, welcome to the meeting. And 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, the corporation has appointed Broadridge Financial Solutions to act as Inspector of Elections. Jan Castillo from Broadridge is here with us today and has taken the oath of Inspector of Elections. Julie Janssen is our Executive Vice President, External Affairs, Chief Legal Officer and Corporate Secretary. Today, she also acts as secretary of this meeting. Julie 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. Julie, let me turn it to you. Thank you, Lynn. As of the close of business on March 9, 2018, Duke Energy Corporation had outstanding and entitled to vote 700,000,000 605,319 shares of common stock, each of which is entitled to one vote. There are here represented by proxy 620,000,000,9,445 shares of the and 45 shares of the corporation's common stock, which constitute 88.49 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. Julie, thank you. 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. So let's proceed with the matters to be voted on. The first management stand for election every year at the annual meeting. Our stand for election every year at the annual meeting. Our elections also require nominees to receive a majority vote rather than a plurality to be elected. These nominees, whose bios begin on Page 10 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 Ted Craver, Retired Chairman, President and CEO of Edison International Rob Davis, Chief Financial Officer and Executive Vice President, Retired President and CEO of Nucor Corporation John Forsgren, Retired Vice Chairman, Executive Vice President and Chief Financial Officer of Northeast Utilities John Herron, Retired President, CEO and Chief Nuclear Officer of Entergy Nuclear Jim Heiler, Retired Vice Chairman and Chief Operating Officer at First Citizens Bancshares Bill Kennard, Non Executive Chairman of Elacitas Partners Marie McKee, Retired Senior Vice President of Corning Incorporated Whit Moorman, Senior Advisor to Amtrak 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 of Industry Strategy for the Institute of Nuclear Power Operations. They have been nominated for election as directors for 1 year terms, expiring in 2019. There are 3 additional management proposals being presented for approval. Proposal 2 is the ratification of Deloitte and Touche as the corporation's independent registered public accounting firm for 2018, as stated on Page 33 of the proxy. Proposal 3 is a vote on an advisory basis of our named executive officer compensation as disclosed on Page 35 of the proxy statement. Proposal 4 is a vote on the amendment to the corporation's certificate of incorporation to eliminate the super majority voting provision as disclosed on Page 69 of the proxy statement. Also to be presented is one proposal we received from one of our shareholders, which Julie will now introduce. So Julie, let me turn it to you. Thank you. The shareholder proposal identified as Proposal 5 in the proxy statement beginning on Page 79 relates to an annual report on the corporation's lobbying expenses. The Board of Directors has recommended a vote against this proposal. Presenting on behalf of the proponents, National Center For Public Policy Research is their General Counsel, Justin Danhof. Mr. Danhof elected to pre tape the following statement. I would like to remind shareholders that Mr. Danhof's statement is his own and does not represent the views of Duke Energy. I'm Justin Danhof, General Counsel of the National Center For Public Policy Research. I want to tell you about our shareholder proposal entitled Political Lobbying and Contributions. We had 2 goals in filing this proposal. The first goal was to block a shareholder resolution from Mercy Investment Services for making it onto Duke Energy's proxy statement. We succeeded in doing that. The second goal is to encourage the company to stand up for its values and pro capitalist agenda in the face of attacks from Mercy and its cohorts. We didn't know for sure that Mercy would be the specific group to file the anti free speech proposal, but we had a good idea it would come from the anticapitalists in the as you sell network. So we filed a resolution with similar language, but with a pro business message. Since the Securities and Exchange Commission has a first in time role and ours was in 1st, Mercy's proposal won't see the light of day. Duke investors should share that result. Mercy Investment Services is part of a broad network of liberal groups attempting to use American corporations to silence speech and defund advocates of free enterprise. Following the U. S. Supreme Court's 2010 Citizens United decision, this network has filed hundreds of resolutions complaining about an alleged lack of transparency and accountability in corporate lobbying and political activity. However, such groups never express concern about the 1,000,000,000 of corporate dollars that go to fund liberal causes Herein lies the hypocrisy of those proposals. This liberal network abhors corporate speech when it is perceived to skew to the political right, yet it remains silent when speech favors supported leftist causes. The IdoStwo network has tried to co opt Duke's investors into its anti free speech efforts in prior years, and its proposals have received upwards of 30% support. That's appallingly high. Many investors were perhaps misled by Azusa's apparent call for transparency and accountability. We hope investors now understand this network's extremely partisan nature and deceptive tactics. This network complains that corporate relationship with groups such as the U. S. Chamber of Commerce, the American Legislative Exchange Council known as ALEC and the Business Roundtable, the National Association of Manufacturers and other pro business organizations expose companies such as due to reputational risk. Considering that the network regularly smears these free market groups, this is a circular argument with no basis in fact. Groups such as the Chamber and Allied promote a fair economic environment devoid of excessive government regulation and onerous corporate taxation. Such an environment would help, not harm, Duke Energy. But that's just what Mercy and Agisel want, to end American capitalism by destroying private enterprise. In future years and on other corporate proxy statements, if you see a proposal from Mercy Investment Services or any other group in the as you sell orbit that seems to beg for transparency and accountability, vote those down too. Thank you. That concludes our presentation of the proposals before us at the Annual Meeting. 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 Q and A session begins. Julie, thank you. I want to take a few minutes before we move to question and answer and share a brief business update. 2017 was a strong year for Duke Energy. We completed our portfolio We've also delivered on our commitments to customers, the communities we serve and you, our shareholders. We have a clear plan for growth. And today, I wanted to share updates on our progress and talk about our financial results this past year, our strategy execution, our operational performance and how we're investing in our communities and workforce. So let's start with our financial performance. We entered 2017 in a position of strength and continued our strong financial performance. We finished the year near the midpoint of our guidance range, supported by growth in our electric and natural gas businesses and exercised cost discipline that enabled us to offset unfavorable weather. We also increased our dividend by hallmark pledge to our shareholders and 2018 marks the 92nd consecutive year that we have paid 1. We remain committed to maintaining dividend growth in line with our 4% to 6% earnings growth rate. Our stock performed well in 2017, hitting an all time peak in November and we delivered solid shareholder return of 13%, beating our peers in the Philadelphia Utility Index. Late in the year, utility share prices came under pressure due to uncertainty created by tax reform and rising interest rates. These uncertainties have continued in 2018. We supported tax reform as it represents a tremendous opportunity to drive investment and growth in the U. S. Economy. However, for regulated utilities, the impact is more complicated. While our customers will receive the full benefit of tax reform over time, we're working with our regulators to ensure that the timing of this customer benefit also preserves the financial strength of our utilities. Strong credit quality reduces our borrowing costs, which lowers costs for our customers. To further reduce the impact of tax reform, we issued new equity to fund our capital program and support our balance sheet. Looking ahead, Duke Energy remains a premier long term investment. Our earnings growth rate remains at 4% to 6%, underpinned by our commitment to deliver strong results on our 5 year $37,000,000,000 growth capital plan. So now let me share a strategy update. Last year, we unveiled our 10 year vision to transform the customer experience, modernize our grid, generate cleaner energy and expand our natural gas infrastructure. And over the last year, we've made progress executing against this plan. At the center of our strategy are our customers. They've told us that they want more personalized experiences and to engage with us in more meaningful ways and we're working hard to deliver. In 2017, we provided customers with usage and outage alerts, giving them more convenience and control over their energy usage. We started upgrading our customer information system and soon we will launch a new mobile app, giving customers access to tools that they've come to expect. We are on a journey to deliver the experiences our customers expect and we're beginning to see the benefits with rising customer satisfaction across our service territories. As we continue to meet our customers' changing needs, building a smarter, more resilient energy grid is essential. And that's why we're making investments to improve reliability, integrate more renewable energy and provide customers with the information they need. Upgrading our grid with self optimizing technologies will allow us to anticipate outages and reroute power when one occurs. Deployment is underway and we'll build upon the smart grid investments we've already made, which have helped us to avoid over 1,200,000 power interruptions and save our customers 162,000,000 outage minutes. Our goal is to have 80% of our customers connected to our smarter self optimized grid in the next decade. We're also using data analytics, giving us the ability to see our system performance down to the circuit level. Using this information, we are making smart investments to underground the most outage prone lines to drive fewer and shorter outages. And we're investing in smart meters that will give our customers real time information to better control their energy use. In 2017, we deployed 1,200,000 smart meters and remain on track to finish our deployment by 20 21. This $25,000,000,000 10 year investment will deliver a better experience for our customers. We're in the early stages that customers are excited about the potential. This modernized grid also complements our investments in cleaner energy. We have a long standing commitment to the environment. We've cut our carbon emissions by 31% from 2,005 levels, and we plan to reach 40% by 2,030. To help meet this goal, we're investing $11,000,000,000 in cleaner generation, while retiring less efficient coal plants. In retiring less efficient coal plants. In 2017, we connected 500 megawatts of new solar projects in North Carolina, helping the state remain 2nd in the nation for solar capacity. We also announced plans for an additional 700 megawatts of solar in Florida, built our first three solar plants in Kentucky and acquired one of the largest solar projects in New York. Today, Duke Energy is one of the nation's top renewable energy providers, and we are on track to own or purchase 8,000 megawatts of wind, solar and biomass energy by 2020. We are also investing in natural gas generation, a cleaner alternative to coal. Natural gas is a perfect partner for our renewables portfolio, helping us balance demand when renewable resources are not available. Construction of our new natural gas power plants continues to progress. Our W. S. Lee plant came online this April and our Citrus County and Western Carolinas plants remain on track to begin operations in 2018 2019, respectively. We're also expanding our natural gas infrastructure. In 2017, we marked the 1 year anniversary of the Piedmont acquisition and reached several important milestones for our midstream gas business. Sable Trail Pipeline went into commercial operation last summer and the Atlantic Coast Pipeline started construction earlier this year. These pipelines are critical infrastructure investments investments that will bring needed gas supplies to the Southeast while saving customers money through lower fuel costs. They will also serve an engine for economic development in our region. Moving on, I want to share updates on our operational performance. I am very proud to say that we improved our industry leading safety performance from 2016 and reduced the number of reportable events for the 3rd straight year. At the same time, the capacity factor of our nuclear fleet was over 95 This marks the 19th consecutive year our fleet's capacity factor was above 90%. Our nuclear fleet's continued performance remains critical to serving our customers and that was clearly shown when we set an all time peak usage record for Duke Energy Carolina's during January's cold spell. And we continued to show our commitment to environmental stewardship. We met our goal a year early to recycle 80% of our solid waste and continued our progress closing ash basins. To date, we have excavated and relocated nearly 17,000,000 tonnes of ash system wide with 7,000,000 tonnes removed in 2017 alone. We are leading the industry on this important issue and we're committed to closing basins in ways that protect the environment and our customers. In response to shareholders, we also issued a new climate report. This provides information on our efforts to mitigate risks from climate change and lower emissions. Our goal is to reduce carbon emissions 40% by 2,030, which is consistent with a 2 degree scenario, which we discuss further in the climate report. We're also doing our part to support the future of our communities. Last year, Duke Energy worked side by side with communities to attract $5,900,000,000 in capital investments, helping to create over 12,000 jobs. And our foundation and employees contributed over $52,000,000 to local organizations that help our communities thrive. But our employees did more than that. They did more than donating their time and money. They showed determination in executing our strategy, while never forgetting our responsibility to our customers and shareholders. As we evolve for the future, our workforce is also evolving and becoming more agile. As a company, we're supplementing this effort by recruiting employees with diverse viewpoints and skill sets who can create solutions to meet our customers' needs well into the future. As an example, we hired 400 veterans last year and plan to fill 12% of our open positions with veterans going forward. Their training and leadership qualities will be critical for our business to succeed. In closing, I want to say that I'm proud of the work we're doing to build a cleaner, smarter energy future for our customers and our shareholders. And as we look ahead, we have a clear view of the path for Duke Energy. With our customers at the center of everything we do, we're transforming our company while providing reliable, safe and affordable energy. You depend on us to deliver on our commitments and we did just that in 2017. From financial results to operational excellence, we created value for our customers and shareholders excellence, we created value for our customers and shareholders alike and this focus will continue in 2018 beyond. Now that the polls are closed, I'll ask Julie for the Inspector of Elections report before I turn to answering questions. So Julie, can I turn it to you? Absolutely. Thank you, Lynn. Based on the proxies received, each nominee for Director has been elected by over 92% of the shares voted. The ratification of Deloitte and Touche as the corporation's independent registered public accounting firm for 20 18 has been approved with over 97% of the vote. The advisory vote on our named executive The advisory vote on our named executive officer compensation has been approved with approximately 81% of the vote. The vote on the amendment to the corporation's certificate of incorporation has failed, receiving the support of 60 to pass, the amendment required approval of 80% of the outstanding shares of the corporation. The shareholder proposal seeking an annual report on the corporation's lobbying expenses has failed, receiving approximately 34% of the vote. Julie, thank you for those results. The final reports of the Inspector of Elections are ordered to be filed with the minutes of this meeting. So the meeting is now adjourned, and I'd like to turn attention to answering your questions. So Mike Callahan is going to lead us through questions. And Mike, if I could turn it to you. Thank you, Lynn. For the past several weeks, we've invited you to submit questions and even more have come in while we've been on the air. We appreciate and value the level of engagement and interest from our shareholders. We know it's important that your voices are heard, so I'm going to read the questions as you submitted them. All of the questions we received and answers will be posted to the Investors section of our website soon. So let's jump into Q and A. Sure. So similar to last year, we have a number of questions here in the queue, some we received before the meeting. I know that we really wanted to cover today was executive compensation. I have some questions here around how that compensation aligns with shareholder interest, how it aligns with customer interests and so on. So I'm just going to ask one of these. And the question is, why is compensation so over the top for executives while customers are getting rate increases? Their pay and benefits are outrageous while many struggle just to pay their bill. Mike, thank you for that question. And what I'd like to do as we respond to this important topic is to provide some broad context. And then joining me today is Marie McKee, who chairs the compensation committee of the Board. And Marie will take the opportunity to share her perspective on the Board's role and also on CEO pay in particular. Compensation is an important tool for Duke Energy and for any corporation to attract and retain talent. And I think about the world in which we operate with a lot of transformation, new technologies, new ways of doing business, it's extraordinarily important for Duke Energy to be able to attract and retain employees and executives that enable us to move the company forward. We perform very rigorous analysis of compensation, benchmarking to peers in the industry, but beyond that also benchmarking to market at large, particularly for skills that are in demand. And as I think about the executives, the team that works closely with me, with that compensation comes great expectations. And by great expectations, I mean expectations around delivering performance, safety, reliability of our assets, satisfying our customers, delivering on our commitments, whether earnings or dividends, stock price. And in this environment where strategy is so important, looking ahead and preparing Duke Energy for the future. If we fail to meet these objectives, it's reflected directly in compensation. If we do meet the objectives or exceed them, there's success not only for shareholders, but for customers because we're delivering a reliable and affordable product. And so as I draw some of my comments to a close, it's an honor to lead Duke Energy. I take this responsibility very seriously, 28,000 employees, assets around the U. S. I feel the weight of this responsibility And it's my commitment to continue to drive performance and achieve these objectives to strengthen Duke Energy for the future. Always be accountable to customers, to shareholders, our employees who are developing careers here and the communities that are counting on us. And so I'd like at this point to turn it to Marie, who chairs our compensation committee, so she can speak directly to CEO comp and to the Board's perspective. So Marie, let me turn it to you. Thank you, Lynn. The compensation committee is made up of independent Board members of Duke Energy's Board. The board believes it is essential that Lynn be compensated fairly as compared to peer CEOs. We worked with independent compensation consultants to design a market based pay program. Lynn's leadership is instrumental in the evolution of Duke Energy. She's led the development of our strategy. She's restructured our portfolio of businesses. And she's improved returns and reduced risk for Duke. Lynn's leadership is critical as we advance the vision and the execution of our strategy. When Lynn became CEO in 2013, her compensation was set significantly below market. Now why did we do this? Because Lynn was a first time CEO and because our Board takes a conservative approach to compensation. This decision, however, created a major gap between Lenspay and relative CEOs. We have increased her pay over several years based on her performance and Duke results. Lynn's 2017 compensation is not representative of a typical year. It included a one time performance based retention stock grant. The Board wanted to send Lynn a clear message that we wanted to retain and reward Lynn, but based on the company's strong performance. This grant is not a part of our regular program. This grant has not yet been paid. This grant will only be paid if the performance goals are met after a 3 year period of time. Approximately 90% of Lynn's pay is at risk, meaning it is tied to the performance of Duke Energy's stock price. That means that pay for stock awards can differ from the target amount that is reported in the proxy. Again, why is that? Because that amount is paid later than when it's reported and based on the actual company performance. We recognize that Lynn is well paid and that this is a very important issue. And it is vital that she is compensated well as compared to her peers. The actual amount Lynn receives is tied to the company's success and the shareholders' success. Thank you for allowing me to speak with you today about this very important topic. Thank you, Marie, for providing the Board's perspective on that. Thank you, Lynn, for providing your comments as well. I want to move on to some of the other questions we have in the queue. A lot of interesting topics here, including got questions here on diversity, political conventions, coal ash and renewables, the dividend and stock price. So let me get to the next one that I want to cover and it's on the online meeting format itself. As you know, we have shareholders literally around the world. We have shareholders in Europe. We have shareholders in Australia and Japan, etcetera. I learned an interesting fact from my team this week. We actually have shareholders in all 50 states in the U. S. And so we got positive feedback last year about the online meeting for those that didn't have to travel here. They can They can participate in the meeting. They really appreciated that. But I've got a question here from someone who perhaps didn't share in that sentiment, uncertain about the change to an online meeting. And the question is, other than keeping shareholders in the dark, why did you discontinue the physical question, Mike. And certainly the intent is to do nothing but continue to expand on transparency to our shareholders. And I recognize the change, this is a change and so adaptation to change is going to be part of that. But as you mentioned, as we debriefed on last year's meeting, we had twice the attendance that we typically have at annual meetings and also because of the format and the follow-up on questions where we had a chance to answer every question and post that to our website, we actually got to several times more the number of questions and shareholders were able to enjoy in a face to face meeting. So our commitment is to continue energize this format in a way that meets shareholders' needs. And I would strongly encourage shareholders to visit our website frequently. There is a lot of good information directed at keeping you informed so that you're always informed about what's going on. Quarterly reports are there, annual reports are there, 10 ks is there and special interest stories, where you might find our work in Puerto Rico, for example, with the recent hurricane results. And so as you embrace this digital format, I think you'll find a wealth of information and our intent is to keep that fresh and new so that you always know what's going on at Duke Energy. We certainly do spend a lot of time updating the website. So definitely appreciate those comments. Once again this year, we received some questions about diversity. And obviously, you and Marie represent gender diversity on the Board. There's a question I have on gender diversity. We also had a question about racial diversity. So perhaps maybe you can just give your response about diversity in general, but I'll ask the question here. Sure. Up for election? Surely there are more than 2 women qualified to be considered for election. As a 70 year old woman, I find this dismissive of women in general, who probably make up 50% of your customer base. And Mike, diversity is a topic that's near and dear to my heart. And I believe diversity makes Duke Energy stronger, whether it's at the board level, it's in my senior executive ranks or really throughout the company. And we are always on a journey to continue to add diversity. And I think about some of the comments I made a moment ago around transformation and the strategy of the company. I'm even a firmer, more firm believer that we need diverse thought in a period of transformation so that we have the voices around the table helping us get to the best solutions. So today, across gender and ethnicity, we have 30% of our board is diverse. Women, as you said, Marie and I represent the women on the board. And my commitment to shareholders and also to the broader stakeholders of Duke Energy is that we will continue to strive to add diverse talent, not only to our board, but to our executives. Keeping in mind that we're also focused on the right skills, We're focused on people who have availability to spend the time necessary to really devote to our company. And we do have some requirements around geography with our board that we also are very attuned to. And so we will continue to work to adding diversity both to our board and to our executive team. But I just want to leave you with that commitment because it is extraordinarily important to Duke. So, I'm going to turn our attention to lobbying. We had a couple questions from shareholders on this. This is something that we work hard at. We post reports to our website a couple of times a year. Question here also actually touches on alternative energy. I'm going to cover renewables in a moment. So if you just focus on the lobbying portion of this question. The question reads, invest more in alternative energies, not oil, gas and coal. Too much old guard thinking at Duke, but it's not 1950 anymore. Duke and Wells Fargo need to be public transparent with lobbyist activities and their expenditures as are those serving the interest of public sector corporations? So I'll take lobbying first and disclosure, Mike. And then I as you said, we'll get to renewables. We take our responsibility around being involved in the political process very seriously. And as we have heard from shareholders on this important topic, the feedback that we've received is that shareholders want more information on how we govern those expenditures, who approves them, what is the board's role and also expanded disclosure. So we took a very deliberate and intentional approach toward this and continue to refine it a couple of years ago, where you will find on our website, our governance policy, how we approve expenditures at management level and at the Duke Board level. And we also included disclosure on our federal and state lobbying, corporate contributions, Duke PAC. So you'll find a wealth of information. And our commitment is we'll continue to provide the appropriate oversight that our shareholders expect on this important issue. And we'll continue to stay involved in the political process because we think that's important for corporations and for citizens. And so you can expect to continue to see us in that way as well. So that question talked about it being the 1950s and we certainly have done a lot on the renewables front. Sitting here with an iPad, literally getting questions from shareholders and we're streaming it online. So, pretty amazing stuff. So, in the spirit of modernization, I mentioned that last So in the spirit of modernization, I mentioned that last question had an alternative energy feel to it. Let me ask you a renewables question. The question here is, I believe Duke should abandon the pursuit of natural gas and turn attention and resources instead to the growing industries of solar and wind. Where does the Board stand on that? Renewable energy represents an increasingly important part of the Duke portfolio. And I want to spend a minute on this, Mike, because I believe Duke's track record around renewables is very strong. And so I think catching shareholders up on the commitment that we have already demonstrated to renewable investment as well as where we're going is important for people to understand. We have invested $6,000,000,000 in renewable energy and have another $3,000,000,000 forecasted over the next 5 years. We operate 20 wind farms around the U. S. We have 60 solar farms. North Carolina is 2nd in the U. S. In solar. South Carolina in 20 17 moved to the top 10 of solar being added in South Carolina. We've announced 700 megawatts in Florida. And so the progress around adding renewable generation has been extraordinary. And today, Duke Energy is in the top five utilities in the U. S. In terms of the number of renewables that we have in our portfolio. So, I think the investment has been very strong and very aggressive. But I also think it's important to understand that our responsibilities go beyond just investment in a technology. Our responsibility is providing reliable, affordable energy 24 hours a day, 7 days a week and in all seasons. And given the technologies that exist today, we need a diverse portfolio to accomplish that. So, we surround those renewables with natural gas, with nuclear, with hydro power. We have customers involved in energy efficiency. We have demand side management programs and we continue to operate coal plants in many of our states. And that diverse portfolio is what makes it possible for us to provide the reliability that customers count on. Natural gas has been really important for Duke. And as I think about 30% reduction in carbon, that has largely been the result of adding clean natural gas and retiring coal. So as we go forward, we'll continue to keep our eye on carbon emissions. We'll continue to add renewables, but we will also keep our eye on diversity of mix so that our customers can count on affordable and reliable energy. So tremendous progress on that front. When we speak to shareholders, there's a lot of shareholders that are really surprised North Carolina being number 2 in the country. One of the themes that you addressed in that was the retirement of coal. I'm going to ask a question, stay on the topic of the environment. We had several questions on environmental type of issues. One of them just in general, how you think about the environment. This one's on coal ash. Why can't the coal ash, all of it, be shipped to the place where it came from? So short and sweet. Short and sweet answer. And I wish resolution of a decade's long storage issue was a quick answer or an easy solution. But what I will say to you is we have committed to closing our basins in an environmentally responsible way based on science and engineering to keep the environment safe, but also our customers safe. And that will include excavation, some excavation of the ash. It also includes beneficiation, which is a fancy word for recycling, primarily for the concrete industry. And we will also close them in a safe way on-site. We're using off-site landfills as well. And so it's a comprehensive program that will play out over the next 10 to 15 years, consistent with the standards that have been established in our states and by the EPA to ensure that we do so in a safe way. So, our commitment is to continue to operate our plants safely and also to complete our storage of ash in a way that's safe for the environment and for our customers and communities. So appreciate the responses to those questions on the environment. I'm going to switch gears a little bit here. Board governance is something that's clearly important to our investors. And this question asks, why do you have 14 directors, 11 would be plenty? 14 directors, 11 would be plenty. It's a good question, but I think we should step back for a moment and think about the role of a Board for an industry as complex as Duke Energy's. Duke is the largest operator of nuclear, regulated nuclear in the U. S. And so we have a committee that includes nuclear experts that are specifically focused on ensuring the safe and sustainable operations of jurisdictions in which we serve. We have traditional compensation. We have a governance committee. We have an audit committee. We have a finance committee because of the amount of capital that our company spends. On an annual basis, Duke Energy is spending between $8,000,000,000 $10,000,000,000 of capital. That capital is governed by our finance committee to ensure it's being deployed in the right way. So if you look at the scope and complexity of those operations and the fiduciary responsibilities that sit within those committees, I find that 14 is a reasonable number to make sure we have the right mix of skills across that complex business. We continue to focus on skills within our board and refreshment and evaluation of the way we govern and that will continue. But I'm very comfortable with the number of directors we have today. Very good. I'm going to switch gears again, something a little bit different here. The Me Too movement has certainly been a topic in the media this year. This question is also relatively short. The question is, what changes are you making to come in line with the Me Too movement? Mike, we have taken the Me Too movement and some of the disclosures that have come out very seriously at DuPontchy. We strive to have a culture and an environment for employees where people feel safe and comfortable, so that they can give their best work to the company. And as the Me Too movement unfolded, we took a pause at Duke to evaluate our policies, our procedures, our reporting. And I'm pleased to say that we found appropriate policies and appropriate actions being taken if warranted. And really not only reviewed this at the management level, but we also reviewed it at the board level because it's an important topic for our company. And so on something like this, you always remain vigilant. We will continue to ensure that our culture provides the atmosphere for people who feel comfortable reporting and to create that culture of safety and comfort throughout Duke Energy. And so the work continues, but I'm pleased with where we are. Thank you for that. We'll move on to retirees. We often hear from at the annual meeting, many continue to hold Duke stock well under retirement, really relying on that growing dividend as a piece of their retirement. We had a couple of questions on retiree benefits specifically. And I'm just going to read one of these that I think is representative of the questions. While the advisory board is being authorized to consider compensation for corporate executives, it should also consider an increase in retiree compensation. With inflation and continued rising medical premiums, retirees have not received an increase in years. Why not consider increasing retiree compensation? Mike, I appreciate that question and really want to start by thanking the retirees that have been so important to Duke Energy, not only to position us with where we are today, but they continue to be active in the community, representing our company well and involved in so many activities that are important. I recognize that the pension benefits that we provide have not adjusted for inflation. That is consistent with our practice and with many corporations most in fact. But that pension is not intended to be the only part of retirement income, 401 investments, personal investments, social security. We target to replace 70% or more of a working wage for our retirees and strongly encourage planning, because we want nothing more than our retirees to achieve their goals. And so when I'm with retirees, one of the most frequent questions is the one you raised on what about the dividend, keep the dividend coming. And of course, our commitment is to continue dividend growth in the way that our shareholders expect. And so I want to thank retirees for their work. They're an important part of the Duke community and we'll look for ways we can continue to support their efforts as we go forward. So again, I'm going to change topics here a little bit. Back in, I think it was 2012, Charlotte hosted the Democratic National Convention. And I'm going to read the question as it came in. Regardless of your political leanings, the event I would say was a success for the city, literally putting us on the world stage for a week. The shareholder asked about the GOP convention and the question is, if the city of Charlotte gets the GOP convention, will Duke Energy be picking up the tab for unpaid bills like they did for the Democratic convention? Why did the shareholders have to pick up the bill? And then I'm reading what rest of this says. I know the GOP pays their bills and the Dems are deadbeat, but that is what tied the point. So I think you get the clear answer to that. I have no objection, yes. And Charlotte is in the running as our other cities, I believe, for the Republican National Convention in 2020. And Duke Energy is a part of a bipartisan group of corporate leaders and companies in the city really working to see if we can position the city to be successful to host the convention. The whole objective is to showcase Charlotte. The whole objective is to showcase North Carolina and to drive economic development. So we will contribute in a manner consistent with other corporate partners. It'll be structured differently than it was in 2012. But we look at this as a way to proudly recommend our state and our city in a way that we believe will benefit Charlotte and North Carolina. So we're anxious to see where this comes out. And I guess we'll know soon. Yes. So just a couple more topics that I have here, Lynn. I've got one here on energy efficiency. And the question is, growing evidence points to serious consequences from excessive outdoor lighting. What is Duke doing to lower the light level to the night environment, especially to street lighting and to the blue part of the spectrum? So question about outdoor lighting really. So outdoor lighting, Mike, as it comes to my mind, we're working with a lot of communities and municipalities on kind of a smart city approach, which typically includes converting outdoor lighting to LED and putting sensors on the lights and even safety techniques with cameras and other things, so that we're lighting the night in a way that communities want. I think there are more technologies available today to address some of the concerns that the shareholders raising. And I would encourage conversations with your municipality. That's where we are engaged in conversation. So we can be a part of achieving what those communities want to achieve. So last topic and I stay with it for the end. The dividend, we talked a little bit about the dividend today. I didn't think there was a better place to end that on the dividend. Clearly a very important part of the value proposition to our shareholders. It seems that shareholders asking a question about how we think about the dividend in our stock price in the context Why is our stock Why is our stock price down? Thanks. So Mike, I think there are a couple of questions in that one. And the first thing I'd like to acknowledge is in a rising interest rate environment, dividend paying stocks are typically impacted. So when investors have an alternative called a corporate bond or a treasury note that earns a higher yield, it typically has a downward pressure on dividend paying stocks. And we've seen some of that late 2017 into early 2018. We can't control interest rates at Duke Energy, but what we can control is our dividend and positioning our company to be successful in all environments. So you can count on Duke to continue to grow the dividend, growing it within the pace of earnings growth 4% to 6%. And we have a demonstrated track record of the dividend. 92 consecutive years of paying our dividend, we understand how important it is to our investors and how important it is to our value proposition. So with a combination of a growing dividend and earnings growth of 4% to 6%, we're really targeting a stock with an 8% to 10% total shareholder return. And that is our commitment to shareholders. So we really covered a lot of ground here today. Appreciate your comments. Appreciate the participation of Marie on behalf of the Board. And I'm going to turn it back over to you, Lynn, to close out the meeting. Sure. And Mike, thank you for facilitating questions. We really appreciate the engagement today. We appreciate your investment in Duke Energy. As I said earlier today, we will include on our website following this meeting all of the questions as they came in as well as answers. And I want to thank you for your time this afternoon. And again, thank you for your investment in Duke Energy.