Duke Energy Corporation (Holding Company) · NYSE:DUK

Duke Energy Corporation (Holding Company) — Q4 2013 Earnings Presentation

101 slides from Duke Energy Corporation (Holding Company)'s earnings presentation, Feb 18, 2014

1. Slide 1: Earnings Review and Business Update, Fourth Quarter 2013

   Earnings Review and Business Update February 18, 2014 | Fourth Quarter 2013 Lynn Good, President and CEO Steve Young, Executive VP and CFO

2. Slide 2: Safe Harbor

   Safe Harbor Safe Harbor statement Some of the statements in this document concerning future company performance will be forward-looking within the meanings of the securities laws. Actual results may materially differ from those discussed in these forward-looking statements, and you should refer to t

3. Slide 3: Topics for today's call

   Topics for today’s call  Our 2013 accomplishments and financial results  Achieving strategic clarity with the Commercial Businesses  Full-year 2014 EPS guidance range and financial assumptions  Long-term EPS growth expectations through 2016  Key priorities for 2014 and beyond 3 | Fourth Quarter

4. Slide 4: Delivering on our financial objectives

   Delivering on our financial objectives  Achieve 2013 EPS guidance (1)  Position for 4-6% EPS growth beyond 2013 (1)(2)  Grow the dividend  Maintain strong balance sheet  Adjusted EPS of  Midpoint of 2014 EPS  Increased dividend by  S&P revised outlook $4.35 in 2013 (at mid- guidance range 2%

5. Slide 5: 2013: Situating the regulated business for future success

   2013: Situating the regulated business for future success  Edwardsport IGCC in-service and new rates implemented Midwest  IGCC performance testing continues  Constructive outcomes in  Constructive outcomes in two three rate cases Ohio distribution rate cases  Delivered expected merger Carolinas

6. Slide 6: Realizing merger benefits for customers and investors

   Realizing merger benefits for customers and investors Fuel and Joint Dispatch savings Non-fuel O&M savings Guaranteed $687 million in fuel and joint Original merger target of 5-7% non-fuel O&M dispatch savings to Carolinas customers over 5 savings years (1)  Exceeding original target through cost 

7. Slide 7: Exiting merchant generation business

   Exiting merchant generation business  On February 13, 2014, the PUCO denied Duke Energy Ohio’s cost-based capacity request  On February 17, 2014, Duke Energy announced it has begun a process to exit the Midwest Generation business  Complete transfer of assets out of utility within the next 60 day

8. Slide 8: Significant Drivers of Full Year 2013 Results

   Achieved 2013 adjusted EPS at midpoint of guidance range (1) Adjusted Diluted EPS Adjusted Segment Income 2013 Plan 2013 Actual (in millions) Regulated Utilities $ 2,755 $ 2,776 International 405 408 $4.32 $4.35 Commercial Power 95 15 Total Business Segments $ 3,255 $ 3,199 $0.70 $1.00 Other (205) (

9. Slide 9: Industrial and commercial activity supports 2013 load growth

   Industrial and commercial activity supports 2013 load growth Full-year 2013 weather-normalized load Regulated Utilities weather-normal volume changes growth of 0.6%, in line with expectations for Residential Commercial Industrial Total ~0.5% growth 1.2%  Residential: steady growth in average number

10. Slide 10: 2014 adjusted EPS growth drivers

    2014 adjusted EPS growth drivers (1) (2) 2014 Guidance Range Segment Adjusted EPS Drivers Key 2014 Assumptions REGULATED UTILITIES +$0.11  Capex of $5.8-6.1 billion ▲Full year impact from 2013 regulatory activity ▲Normal weather  Retail load growth of ~0.5% $4.45 - ▲Retail load growth $4.60  Nucl

11. Slide 11: ~9% merger savings to keep O&M flat through 2014

    ~9% merger savings to keep O&M flat through 2014 $ in millions Functional Consolidation $ 235 Emerging Supply Chain 90 Costs Systems Consolidation 65 Fukushima Costs Operational Best Practices 60 Cost Savings Inflation Cyber Security Initiatives Benefits & Other 100 (~2.5% annually) New Generatio

12. Slide 12: A return to normal quarterly earnings shaping in 2014

    A return to normal quarterly earnings shaping in 2014 2014 Quarterly Earnings Expectations (*)  2013 earnings significantly weighted to back half of year due to rate case approvals  2014 quarterly results are expected to revert to more normal trends  Expect higher year-over-year adjusted EPS in 1

13. Slide 13: Financing our growth investments

    Financing our growth investments (in millions) 2014 Financing Plan (3) Estimated 2014 Cash Flows $1,760 (1) Duke Energy(4) Adjusted net income $ 3,200 $1,550 Depreciation & amortization 3,700 DEC Deferred and accrued taxes 1,340 $50 Other sources / (uses), net (2) (565) DEP $600 Primary sources 7,67

14. Slide 14: Strength of balance sheet supports credit metrics and ratings

    Strength of balance sheet supports credit metrics and ratings (As of February 18, 2014) Credit metrics summary 2014E Target Holding company FFO / Debt 19% 18% - 22% Fitch Moody's S&P FFO Interest Coverage 5.3x 3.5x – 4.0x DUKE ENERGY Stable Stable Stable Senior Unsecured Debt BBB+ A3 BBB Debt to Cap

15. Slide 15: Achieving long term earnings growth of 4-6% through 2016

    Achieving long term earnings growth of 4-6% through 2016 Adjusted diluted EPS summary (1) EPS CAGR Long-term segment earnings drivers Contribution Thru 2016 Regulated  Investments in regulated fleet 4% Utilities  Long-term load growth of 0.5 – 1.0% 1 - 2%  Wholesale and customer program growth 2%

16. Slide 16: Continued productivity gains to yield flat O&M through 2016

    Continued productivity gains to yield flat O&M through 2016 (1) Project flat O&M expense (1) from 2011 to 2014 Our Track  Merger savings offset inflation and emerging costs Corporate Consolidation Record  Removed ~20% of corporate center O&M expense Focus Flat O&M expense from 2014 through 2016 (1

17. Slide 17: Capital investment supports earnings growth

    Capital investment supports earnings growth ($ in billions) Total Capital 2014-2016 Capital Expenditures $7.0 – $8.0 Capital Type Amount Recovery Mechanism $7.2 – $8.2 per year Generation Growth $6.9 – $7.5 $1.0 $1.0 Generation – Carolinas $2.3 B Base rates $0.6 $0.7 $0.5 Generation – Florida $1.1 B

18. Slide 18: Incremental growth projects to support 4-6% EPS growth

    Incremental growth projects to support 4-6% EPS growth (1)  Duke Energy Progress (DEP) entered into Purchase exclusive discussions with NCEMPA to NCEMPA purchase ~700MW of NCEMPA’s ownership in certain existing DEP plants (2) ownership in  No definitive agreement reached DE Progress  Transaction

19. Slide 19: Established track record of dividend growth

    Established track record of dividend growth DUK annual dividend per share(1)  Supported by strong regulated earnings  88-year history of quarterly cash dividends  Increased quarterly dividend $0.015 to $0.78/share in 2013  Target long-term payout range of 65 - 70% of adjusted diluted EPS  Flexi

20. Slide 20: Financial objectives for 2014 and beyond

    Financial objectives for 2014 and beyond Achieve Grow 2014 EPS guidance EPS 4 - 6% $4.45 - $4.60 (1) through 2016 (1)(2) Grow Maintain strong dividend at 65 - 70% credit ratings and target payout (1) balance sheet (1) Based on adjusted diluted EPS (2) Long-term adjusted diluted EPS growth rate of 4-

21. Slide 21: Key priorities for 2014 and beyond

    Key priorities for 2014 and beyond Achieve Financial Maximize value from the Maintain Effective Objectives Commercial Businesses Collaboration  Increase productivity and  Advance process to exit  Engage regulators and manage costs Midwest Generation customers  Execute regulatory stay-  Optimize

22. Slide 22: Appendix materials

    Appendix materials Item Slides 2013 performance against guidance assumptions 23-33 2014 guidance support 34-51 Financing assumptions 52-57 Regulated Utilities supplement 58-64 International Energy supplement 65-71 Commercial Power supplement 72-75 Environmental overview 76-83 Upcoming events 84 22 |

23. Slide 23: 2013 performance against guidance assumptions

    2013 performance against guidance assumptions 23 | Fourth Quarter 2013 Earnings Review and Business Update

24. Slide 24: Update on key 2013 earnings guidance assumptions

    Update on key 2013 earnings guidance assumptions ($ in millions) 2013 2013 assumptions Actual Adjusted segment income (expense) (1): Regulated Utilities $2,755 $2,776 International Energy $405 $408 Commercial Power $95 $15 Other ($205) ($128) Duke Energy Consolidated $3,050 $3,071 Additional consoli

25. Slide 25: 4Q-2013 earnings summary and key drivers

    4Q-2013 earnings summary and key drivers Adjusted diluted EPS 4Q-2013 Key adjusted segment income drivers (2) REGULATED UTILITIES (+$109 million) +$0.15 ▲Lower O&M, including nuclear outage cost levelization +$0.20 $4.32 $4.35 ▲Increased pricing and riders (3) +$0.12 ▲Favorable weather +$0.06 ▲Incre

26. Slide 26: Regulated Utilities adjusted segment income

    Regulated Utilities Reported & adjusted segment income Adjusted segment income history YTD YTD ($ in millions) ($ in millions) 4Q13 4Q12 $1,000 2013 2012 $750 Reported segment income $ 572 $ 481 $ 2,504 $ 1,744 $500 $250 Adjustments 35 17 272 342 $0 Q1 Q2 Q3 Q4 Adjusted segment income $ 607 $ 498 $

27. Slide 27: Regulated Utilities 2013 normalized volume trends, by jurisdiction

    Regulated Utilities 2013 normalized volume trends, by jurisdiction Full-year 2013 Duke Energy Duke Energy Duke Energy Duke Energy Duke Energy Regulated Carolinas Progress Florida Indiana Ohio/Kentucky Utilities 1.9% 2.0% 1.7% 1.3% 1.3% 1.1% 1.0% 0.8% 0.7% 0.8% 0.9% 0.6% 0.5% 0.6% 0.4% 0.4% 0.3% 0.2%

28. Slide 28: Regulated Utilities 2013 weather-normal volume trends

    Regulated Utilities 2013 weather-normal volume trends Residential Commercial Industrial Total Retail 3.0% 1.6% 1.7% 0.9% 1.1% 1.2% 0.8% 1.2% 0.9% 0.6% 0.7% 0.3% 0.5% 0.5% 0.4% -0.5%-0.4% -0.5% -0.6% -0.5% Q1 2013 Q2 2013 Q3 2013 Q4 2013 Full Year 2013 Note: Q1 and full year 2013 Y-O-Y growth was neg

29. Slide 29: Regulated Utilities quarterly weather impacts

    Regulated Utilities quarterly weather impacts Weather segment 2013 2012 income to normal: Pretax impact Weighted avg. EPS impact – Pretax impact Weighted avg. EPS impact – diluted shares favorable / diluted shares favorable / (unfavorable) (unfavorable) First Quarter (1) $25 705 $0.02 ($80) 446 ($0.

30. Slide 30: Duke Energy Florida cost of removal history

    Duke Energy Florida cost of removal history (1) 2013 ($ in millions) 2010 (2) 2011 (2) 2012 (2) 1Q 2Q 3Q 4Q YTD Amount recognized $60 $250 $120 $56 $17 $22 $19 $114 (pre-tax) Balance remaining $461 $246 $110 $58 $41 $19 $-- $-- (1) The cost of removal balance remaining is impacted by accruals in acc

31. Slide 31: International Energy adjusted segment income

    International Energy Reported & adjusted segment income Adjusted segment income history YTD YTD ($ in millions) ($ in millions) 4Q13 4Q12 $250 2013 2012 $200 Reported segment income $ 108 $ 89 $ 408 $ 439 $150 $100 Adjustments -- -- -- -- $50 $0 Q1 Q2 Q3 Q4 Adjusted segment income $ 108 $ 89 $ 408 $

32. Slide 32: Commercial Power adjusted segment income

    Commercial Power Reported & adjusted segment income (expense) Adjusted segment income history ($ in millions) YTD YTD ($ in millions) 4Q13 4Q12 $40 2013 2012 $30 Reported segment income $20 $ (29) $ 16 $ (3) $ 87 (expense) $10 Adjustments 26 (16) 18 6 $0 -$10 Adjusted segment income Q1 Q2 Q3 Q4 $ (3

33. Slide 33: Other adjusted segment expense

    Other Reported & adjusted segment expense Adjusted segment expense history YTD YTD ($ in millions) ($ in millions) 4Q13 4Q12 $0 2013 2012 -$20 Reported segment -$40 $ 31 $ (182) $ (261) $ (538) (expense) income -$60 Adjustments (37) 91 133 403 -$80 -$100 Q1 Q2 Q3 Q4 Adjusted segment expense $ (6) $

34. Slide 34: 2014 guidance support

    2014 guidance support 34 | Fourth Quarter 2013 Earnings Review and Business Update

35. Slide 35: Duke Energy value proposition

    Duke Energy value proposition Superior Total Shareholder Return (TSR) Potential  Long-term EPS growth of 4-6% (1) R  Strong annual dividend yield (~4.4%(2)) with growth flexibility  ~8.4%-10.4% average annual TSR potential  Strong balance sheet  Operate in constructive regulated jurisdictions 

36. Slide 36: Business segment structure

    Business segment structure DUKE ENERGY REGULATED COMMERCIAL INTERNATIONAL UTILITIES POWER ENERGY North and South Duke Energy Duke Energy Carolinas Carolina Renewables North and South Duke Energy Duke Energy Progress Carolina Retail Duke Energy Florida Florida Duke Energy Indiana Indiana Ohio T&D Mid

37. Slide 37: 2014 adjusted earnings drivers

    2014 adjusted earnings drivers Regulated Utilities Commercial Power International Other +~$0.11 +~$0.16 +~$0.03 (~$0.12) $4.45 - DEI  Higher $4.60 DEGS  Favorable effective tax $4.38  Renewables pricing & rate  Nuclear outage MW Gen growth volumes in 2014 $4.35  Full year rate cost  Higher PJM

38. Slide 38: Update on key 2014 earnings guidance assumptions

    Update on key 2014 earnings guidance assumptions ($ in millions) 2013 2014 MEMO: 2014 Interest MEMO: 2014 Adj. Actual Assumptions Expense Effective Tax Rate Adjusted segment income (expense) (1): Regulated Utilities $2,776 $2,855 $1,115 36 – 38% International Energy $408 $430 $85 26 – 28% Commercial

39. Slide 39: Forecasted 2014 adjusted book returns

    Forecasted 2014 adjusted book returns (1) 10.00% – 10.75% 10.50% – 11.00% 9.25% – 9.75% 9.00% – 9.50% (2) Carolinas Florida Indiana Ohio & Kentucky (1) Adjusted book returns include wholesale margins, exclude special items, and are based on average book equity. (2) DE Florida’s return is based on bo

40. Slide 40: Key 2014 earnings sensitivities

    Key 2014 earnings sensitivities Driver EPS Change Regulated Utilities 100 bps change in earned return on equity +/- $0.39 $1 billion change in rate base +/- $0.08 1% change in USFE&G volumes +/- $0.10 International 10% change in BRL/US$ foreign exchange rate +/- $0.03 $10/barrel change in brent crud

41. Slide 41: Wholesale sales growth provides earnings support

    Wholesale sales growth provides earnings support  2014 total wholesale net margin is Wholesale Net Margin expected to be ~$1.1 billion  New long-term contracts in the Carolinas – New 20-year contract with NCEMC at $1 B Duke Energy Progress began in 2013 – 18-year contract with Central EMC at Duke

42. Slide 42: 2014 pension funding and costs

    2014 pension funding and costs  Duke Energy’s pension funding policy: Pension Costs 2012A 2013A 2014E – The company is committed to funding its pension obligations ($ in millions) and has consistently contributed above legal minimum Duke Energy plans (1) $62 $102 $60 requirements Progress Energy pl

43. Slide 43: Regulated Utilities weather-normalized volume trends

    Regulated Utilities weather-normalized volume trends ( in % change since prior year) Residential Commercial 0.7% 0.8% 0.3% ~0.4% ~0.4% 0.1% -0.1% -0.2% 2011A 2012A 2013A 2014E 2011A 2012A 2013A 2014E Industrial Regulated Utilities Total 1.2% 1.0% 0.9% ~0.6% 0.6% 0.6% ~0.5% 0.2% 2011A 2012A 2013A 201

44. Slide 44: Regulated Utilities projected earnings base growth

    Regulated Utilities projected earnings base growth (1)(2) $62 $59 ($ in billions) $55 $52 $49 $50 Midwest Florida Carolinas (3) 2013A 2014E 2015E 2016E 2017E 2018E (1) Illustrative earnings base for presentation purposes only and includes retail and wholesale; Projected earnings base = prior period

45. Slide 45: Regulated Utilities earnings base

    Regulated Utilities earnings base (1) ($ in billions) 2013A 2014E 2015E 2016E 2017E 2018E Duke Carolinas $18.7 $19.0 $19.6 $20.4 $21.3 $22.1 Progress Carolinas 10.8 11.1 11.8 12.7 13.7 14.5 Progress Florida 8.7 9.0 9.5 10.0 12.4 (2) 13.0 Duke Indiana 7.2 7.5 7.5 7.5 7.6 7.9 Duke Ohio 2.8 2.9 3.1 3.3

46. Slide 46: Capital expenditures profile

    Capital expenditures profile ($ in millions) 2013A 2014E 2015E 2016E 2017E 2018E 2014-2018 New Generation $ 250 $ 200 $ 975 $ 1,175 $ 1,500 $ 1,225 $ 5,075 Environmental 300 400 250 250 500 500 1,900 Nuclear Fuel 500 525 525 575 525 550 2,700 Major Nuclear 275 350 375 325 175 75 1,300 Customer Addit

47. Slide 47: Capital expenditures by utility

    Capital expenditures by utility ($ in millions) Duke Energy Carolinas 2013A 2014E 2015E 2016E 2017E 2018E 2014-2018 New Generation $ 25 $ - $ 300 $ 450 $ 325 $ 425 $ 1,500 Environmental - 25 25 50 125 150 375 Nuclear Fuel 300 300 325 350 325 350 1,650 Major Nuclear 125 125 150 125 100 25 525 Custome

48. Slide 48: Capital expenditures by utility, (Cont'd)

    Capital expenditures by utility, (Cont’d) ($ in millions) Duke Energy Florida 2013A 2014E 2015E 2016E 2017E 2018E 2014-2018 New Generation $ - $ 175 $ 350 $ 350 $ 700 $ 325 $ 1,900 Environmental 100 50 25 - - 25 100 Major Nuclear 75 75 50 50 - - 175 Customer Additions 50 75 75 75 75 75 375 Grid Mode

49. Slide 49: Capital expenditures by utility, (Cont'd)

    Capital expenditures by utility, (Cont’d) ($ in millions) Duke Energy Ohio / Kentucky 2013A 2014E 2015E 2016E 2017E 2018E 2014-2018 New Generation $ - $ - $ 50 $ - $ - $ - $ 50 Environmental - - - - - 25 25 Customer Additions 25 25 25 50 50 50 200 Grid Modernization and other T&D projects 75 25 150

50. Slide 50: ~$6 billion in generation growth investments from 2014-2018

    ~$6 billion in generation growth investments from 2014-2018 ($ in millions) Carolinas 2014 – 2016 2017 - 2018  New generation investments and large nuclear projects will drive rate base Lee CC – 2018 growth CT’s / Regulated Solar  98% of this capital is allocated to the 2019 – 2021 CCs Carolinas a

51. Slide 51: ~$4.5 to $5.5 billion of environmental compliance costs through 2023

    ~$4.5 to $5.5 billion of environmental compliance costs through 2023  Anticipate ~$4.5-$5.5 billion in Carolinas (1) 2014 – 2016 2017 - 2023 compliance costs for approved Mercury Controls/Sorbent Injection Response to Emissions Standards or pending air, water and Wastewater Treatment waste regulati

52. Slide 52: Financing assumptions

    Financing assumptions 52 | Fourth Quarter 2013 Earnings Review and Business Update

53. Slide 53: Simplified financing structure

    Simplified financing structure Duke Energy (HoldCo) Cinergy Corp. Duke Energy Progress Energy (HoldCo) International (HoldCo) (1) Duke Energy Duke Energy Duke Energy Duke Energy Duke Energy Carolinas Ohio Indiana Progress Florida Duke Energy Commercial Paper and LT Financings Duke Energy Money Pool

54. Slide 54: Near-term debt maturities

    Near-term debt maturities ($ in millions) $2,470 Regulated Utilities Maturities Detail $2,170 2014 2015 2016 $250 $1,870 Duke Energy Carolinas (1) $ 50 $ 505 $ 355 $290 Duke Energy Progress (1) 175 700 - Duke Energy Florida 10 550 - $1,915 Duke Energy Indiana 5 5 480 $890 Duke Energy Ohio 5 155 5 Du

55. Slide 55: Credit metrics in line with targets

    Credit metrics (1) FFO/Debt Consolidated 37% Target = 33% 18.0% - 20.0% 29% 29% 29% 26% 24% 23% 24% 23% 23% 24% 23% 21% 22% 19% 20% 17% 2013A 2014E 2015E 2013A 2014E 2015E 2013A 2014E 2015E 2013A 2014E 2015E 2013A 2014E 2015E 2013A 2014E 2015E Duke Carolinas Duke Progress Duke Florida Duke Indiana D

56. Slide 56: Liquidity summary (as of December 31, 2013)

    Liquidity summary (as of December 31, 2013) ($ in millions) Duke Duke Duke Duke Duke Duke Duke Energy Carolinas Progress Florida Indiana Ohio Kentucky Total Master Credit Facility (1) $ 2,250 $ 1,000 $ 750 $ 650 $ 700 $ 550 $ 100 $ 6,000 Less: Notes payable and commercial paper (2) - (300) - - (150)

57. Slide 57: Credit ratings (as of February 18, 2014)

    Credit ratings (as of February 18, 2014) Holding companies Operating companies Fitch Moody's S&P Fitch Moody's S&P DUKE ENERGY Stable Stable Stable DUKE ENERGY CAROLINAS Stable Stable Stable Corporate Credit / Issuer Rating BBB+ A3 BBB+ Senior Secured Debt A+ Aa2 A Senior Unsecured Debt BBB+ A3 BBB

58. Slide 58: Regulated Utilities supplement

    Regulated Utilities supplement 58 | Fourth Quarter 2013 Earnings Review and Business Update

59. Slide 59: Nuclear outage levelization

    Nuclear outage levelization  Retail portion of planned nuclear outages will Utility Plant Unit Refueling Last Cycle Outage be deferred to a regulatory asset and amortized DEC Catawba (1) Unit 1 18 months Fall 2012 over the applicable fuel cycle DEC Catawba (1) Unit 2 18 months Fall 2013 – Amortizat

60. Slide 60: Nuclear refueling outages

    Nuclear refueling outages 2013 2014 2015 2016 Actual Planned Planned Planned Brunswick 1 ● ● Brunswick 2 ● ● Catawba 1 ● ● Catawba 2 ● ● ● Harris ● ● ● McGuire 1 ● ● ● McGuire 2 ● ● Oconee 1 ● ● Oconee 2 ● ● Oconee 3 ● ● Robinson ● ● ● Total Number of Outages 6 6 7 7 60 | Fourth Quarter 2013 Earning

61. Slide 61: Operational Excellence: nuclear KPIs

    Operational Excellence: Continuous measurement of nuclear KPIs to drive accountability and performance 2008 2009 2010 2011 2012 Key Performance Indicator Legacy Legacy Legacy Legacy New (KPI) Duke Duke Duke Duke Duke (1) 2013 Personal Safety (TISAR) Radiological Safety (Dose) Nuclear Safety (Scrams)

62. Slide 62: Current rate information by jurisdiction

    Current rate information by jurisdiction North South Ohio Kentucky Florida Indiana Carolina Carolina Electric Gas Electric Gas $15.7B (1) (DEC) Retail Rate Base $8.1B (2) $7.0B (3) $1.4B (4) $900M (5) $600M (6) $200M (7) $7.8B (1) (DEP) $1 B (DEC) 3Q 2013 Wholesale Rate Base $1.1B (2) $600M $0 N/A $

63. Slide 63: Current rate information by jurisdiction (Cont'd)

    Current rate information by jurisdiction (Cont’d) North South Ohio Kentucky Carolina Carolina Florida Indiana Electric Gas Electric Gas Notice of Intent Yes Yes Yes Yes (2) Yes Yes Yes Yes Required? Notice Period 30 Days 30 Days 60 Days Varies 30 Days 30 Days 28 Days 28 Days Historical Historical Ad

64. Slide 64: Overview of state commissions by jurisdiction

    Overview of state commissions by jurisdiction North Carolina South Carolina Florida Indiana Ohio Kentucky Number 7 commissioners 7 commissioners 5 commissioners 5 commissioners 5 commissioners 3 commissioners Term 8-year terms 4-year terms 4-year terms 4-year terms 5-year terms 4-year terms Appointe

65. Slide 65: International Energy supplement

    International Energy supplement 65 | Fourth Quarter 2013 Earnings Review and Business Update

66. Slide 66: Duke Energy International (DEI) overview

    Duke Energy International (DEI) overview Diverse Portfolio Houston Office MEXICO Strong Earnings Diversity and Cash Flows: BELIZE – Highly contracted business GUATEMALA GUATEMALA HONDURAS 273 MW (bunker & diesel) – Self-funding cash flows NICARAGUA 83 MW (coal) COSTA RICA PANAMA – Annual free cash f

67. Slide 67: DEI – growing electric demand and strong economies

    DEI – growing electric demand and strong economies Real GDP Growth (%) Electricity Demand Growth (%) 12.0% 12.0% 10.0% 10.0% 8.0% 8.0% 6.0% Brazil 6.0% Brazil 4.0% Peru 4.0% Peru 2.0% 2.0% 0.0% Chile Chile 0.0% -2.0% USA -2.0% USA -4.0% -4.0% -6.0% -6.0% 2008 2009 2010 2011 2012 2013 2014 2008 2009

68. Slide 68: Brazil – highly contracted business reduces risk

    Brazil – highly contracted business reduces risk – Highly contracted position in Brazil – Brazil – YE Contractible Capacity (~1,000 MW) Under Firm Contract average tenor over 5 years 93% 87% 73% 60% – Revenue: – New contracts priced at current market 37% prices as contracts mature – Contracts adjust

69. Slide 69: Duke Energy International – Foreign Currency

    Duke Energy International – Foreign Currency Brazil FX – R$ / US$ 2.90 2.70 Unfavorable 2.50 2.30 2.10 Favorable 1.90 1.70 1.50 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Historical DEI Forecast Real/US Dollar Brazilian Real – Annual Average Key Earnings Sensitivity to FX 2010A 2

70. Slide 70: Brazil's reservoir levels – SE region

    Brazil’s reservoir levels – SE region 100 Reservoir Level - Southeast 90 Reservoir Level (% Maximum 80 70 62.45 60 63.75 62.90 60.83 Volume) 50 54.13 55.06 40.30 45.48 48.71 40 43.18 37.46 45.05 43.18 41.62 30 28.86 20 10 2000 2001 2007 2008 2012 2013 2014 0 Dec Jan Feb Mar Apr May Jun Jul Aug Sep O

71. Slide 71: National Methanol Company (NMC)

    Duke Energy International – National Methanol Company (NMC) – Background – NMC is a producer of methanol and MTBE in Saudi Arabia – Current ownership: Saudi Basic Industries Corporation (SABIC) - 50%, Celanese - 25%, and Duke Energy - 25% – JV agreement extended to 2032 (effective April 1, 2010) – U

72. Slide 72: Commercial Power supplement

    Commercial Power supplement 72 | Fourth Quarter 2013 Earnings Review and Business Update

73. Slide 73: Midwest Generation guidance assumptions – 2014

    Midwest Generation guidance assumptions – 2014 2014 Guidance Assumptions Generation Volumes (MM MWh’s) 40,000 Midwest Generation Owned Capacity (in MWs) 6,600 megawatts 30,000 PJM Capacity Revenues $175 million 20,000 ESP Stability Charge $110 million (1) 10,000 Assumed Economic Generation Volumes ~

74. Slide 74: Duke Energy Renewables – Grown to scale since entry in 2007

    Duke Energy Renewables – Grown to scale since entry in 2007 Low Risk Portfolio:  Continue to focus on contracted revenue model, adding projects with long term PPAs with creditworthy counterparties  Grow solar portfolio and continue wind investment – 35 MW of solar being commissioned – 400 MW of wi

75. Slide 75: Commercial transmission announced project pipeline

    Commercial transmission announced project pipeline Project / Total Cost of Milestones Next 2014-2016 2017 & beyond In-service date Project Achieved Milestone (Total ~$100M) Pioneer – JV formed in 2008 with AEP MISO Segment $330 million FERC/MISO approved Routing/ siting ~$40 million 70 miles 765kV l

76. Slide 76: Environmental overview

    Environmental overview 76 | Fourth Quarter 2013 Earnings Review and Business Update

77. Slide 77: Fleet modernization diversifies fuel mix

    Fleet modernization investments... ...have allowed Duke Energy to diversify its fuel mix and become better positioned for environmental compliance More Balanced Fuel Mix (MWh) (1)(3) $9 billion investment adds ~6,600 MW (1) of new capacity, 5% 3% Hydro 3% 2005 1% 2015 replacing up to 6,700 MW (2) of

78. Slide 78: Pending environmental regulations

    Pending environmental regulations Rule overview Potential impacts to Duke Energy  Regulates Hazardous Air Pollutants (e.g., mercury & non-mercury HAPs)  Additional air emissions control Mercury and Air  EPA published final rule on February 16, 2012 equipment Toxics Standards Rule  Compliance dea

79. Slide 79: Pending environmental regulations, cont.

    Pending environmental regulations, cont. Rule overview Potential impacts to Duke Energy  Regulates coal combustion residuals (e.g., coal ash)  Close or upgrade wet ash ponds Coal Combustion  Rule proposed in June 2010  Upgrade wet ash handling to dry Residuals Rule (CCR)  EPA expected to submit

80. Slide 80: Pending EPA regulations will impact U.S. generation

    Pending EPA regulations will impact U.S. generation Major regulations Duke Energy domestic generation (as of 12/31/13) Considerations for EPA Coal Combustion Coal generation profile Residuals Rule TODAY – POST MODERNIZATION (2) – Transition period must 22.0 GW (1) 8% 4% 20.2 GW (Coal Ash) 14% 4% be

81. Slide 81: Positioning our coal fleet for EPA regulations

    Positioning our coal fleet for EPA regulations Coal generation profile – as of 12/31/13 Plans for coal generation without controls Duke Carolinas 4.3 GW 2.5 GW 0.4 – Lee 1&2 ~200 MW potential to be retired by 2015 ~7.2 GW GW – Lee 3 ~170 MW expected to be converted to gas in 2014 Duke Progress 3.3 G

82. Slide 82: Duke Energy steam facility data

    Duke Energy steam facility data (As of 12/31/13) Owned capacity – Fuel Current cooling Ash Handling Ash ponds Structure Operating state Jurisdiction Steam unit facility summer rating (MW) type method Air Emissions controls (flyash; bottom ash) on site (3) Regulated In Operation DE Carolinas Allen 1,

83. Slide 83: Duke Energy steam facility data, cont.

    Duke Energy steam facility data, cont. (As of 12/31/13) Owned capacity – Fuel Current cooling Ash Handling Ash ponds Structure Operating state Jurisdiction Steam unit facility summer rating (MW) type method Air Emissions controls (flyash; bottom ash) on site (2,3) Wet Sluice (Dry Under Scrubber; SCR

84. Slide 84: Upcoming events

    Upcoming events Event Date 1Q 2014 earnings call (tentative) May 7, 2014 2Q 2014 earnings call (tentative) August 7, 2014 84 | Fourth Quarter 2013 Earnings Review and Business Update

85. Slide 85: For additional information on Duke Energy

    For additional information on Duke Energy, please visit: www.duke-energy.com/investors

86. Slide 86: Non-GAAP Reconciliations

    Duke Energy Corporation Non-GAAP Reconciliations Fourth Quarter Earnings Review & Business Update February 18, 2014 Adjusted Diluted Earnings per Share (“EPS”) The materials for Duke Energy Corporation’s (“Duke Energy”) Fourth Quarter Earnings Review and Business Update on February 18, 2014 include

87. Slide 87: Non-GAAP measure definitions

    contracts do not qualify for hedge accounting or regulatory treatment (as discussed separately under “Adjusted Diluted Earnings per Share (“EPS”)”). The most directly comparable GAAP measure for adjusted diluted EPS is reported diluted EPS from continuing operations attributable to Duke Energy Corpo

88. Slide 88: Adjusted Effective Tax Rate

    December 31, 2013, 2012, 2011, and 2010. For the years ended December 31, 2013, 2012, 2011 and 2010, Duke Energy International adjusted net income equals reported net income. Adjusted Effective Tax Rate The materials for Duke Energy’s Fourth Quarter Earnings Review and Business Update on February 18

89. Slide 89: Funds From Operations Ratios

    operations attributable to Duke Energy Corporation common shareholders, which includes the impact of special items and the mark-to-market impacts of economic hedges in the Commercial Power segment. Due to the forward-looking nature of this non-GAAP financial measure for future periods, information t

90. Slide 90: Adjusted to Reported Earnings, Q4 2013

    DUKE ENERGY CORPORATION ADJUSTED TO REPORTED EARNINGS RECONCILATION Three Months Ended December 31, 2013 (Dollars in millions, except per-share amounts) Special Items Costs to Economic Achieve, Crystal River Hedges Adjusted Progress Litigation Unit 3 (Mark-to- Discontinued Total Reported Earnings Me

91. Slide 91: Adjusted to Reported Earnings, Twelve Months 2013

    DUKE ENERGY CORPORATION ADJUSTED TO REPORTED EARNINGS RECONCILIATION Twelve Months Ended December 31, 2013 (Dollars in millions, except per-share amounts) Special Items Costs to Economic Achieve, Nuclear Crystal River Hedges Adjusted Progress Development Litigation Unit 3 (Mark-to- Discontinued Tota

92. Slide 92: Adjusted to Reported Earnings, Q4 2012

    DUKE ENERGY CORPORATION ADJUSTED REPORTED EARNINGS RECONCILIATION Three Months Ended December 31, 2012 (Dollars in millions, except per-share amounts) Special Items Costs to Achieve, Economic Adjusted Progress Edwardsport Hedges (Mark- Discontinued Total Reported Earnings Merger Charges to-Market) *

93. Slide 93: Adjusted to Reported Earnings, Twelve Months 2012

    DUKE ENERGY CORPORATION ADJUSTED TO REPORTED EARNINGS RECONCILIATION Twelve Months Ended December 31, 2012 (Dollars in millions, except per-share amounts) Special Items Costs to Achieve, Voluntary DNC Host Economic Adjusted Progress Opportunity Edwardsport Committee Hedges (Mark- Discontinued Total

94. Slide 94: Adjusted to Reported Earnings, Q3 2013

    DUKE ENERGY CORPORATION ADJUSTED TO REPORTED EARNINGS RECONCILATION Three Months Ended September 30, 2013 (Dollars in millions, except per-share amounts) Special Items Costs to Achieve, Economic Hedges Discontinued Adjusted Earnings Progress Merger (Mark-to-Market) * Operations Total Adjustments Rep

95. Slide 95: Adjusted to Reported Earnings, Q2 2013

    DUKE ENERGY CORPORATION ADJUSTED TO REPORTED EARNINGS RECONCILIATION Three Months Ended June 30, 2013 (Dollars in millions, except per-share amounts) Special Items Costs to Achieve, Progress Nuclear Crystal River Economic Adjusted Energy Development Litigation Unit 3 Hedges (Mark- Discontinued Total

96. Slide 96: Adjusted to Reported Earnings, Q1 2013

    DUKE ENERGY CORPORATION ADJUSTED TO REPORTED EARNINGS RECONCILIATION Three Months Ended March 31, 2013 (Dollars in millions, except per-share amounts) Special Items Costs to Achieve, Economic Adjusted Progress Hedges (Mark- Total Reported Earnings Energy Merger to-Market) * Adjustments Earnings SEGM

97. Slide 97: Adjusted to Reported Earnings, Q3 2012

    DUKE ENERGY CORPORATION ADJUSTED TO REPORTED EARNINGS RECONCILIATION Three Months Ended September 30, 2012 (Dollars in millions, except per-share amounts) Special Items Costs to Achieve, DNC Host Economic Adjusted Progress Committee Edwardsport Hedges (Mark- Discontinued Total Reported Earnings Merg

98. Slide 98: Adjusted to Reported Earnings, Q2 2012

    DUKE ENERGY CORPORATION ADJUSTED TO REPORTED EARNINGS RECONCILIATION Three Months Ended June 30, 2012 (Dollars in millions, except per-share amounts) Special Items (Note 1) Costs to Achieve, Economic Adjusted Progress Hedges (Mark- Discontinued Total Reported Earnings Merger to-Market) * Operations

99. Slide 99: Adjusted to Reported Earnings, Q1 2012

    DUKE ENERGY CORPORATION ADJUSTED TO REPORTED EARNINGS RECONCILIATION Three Months Ended March 31, 2012 (Dollars in millions, except per-share amounts) Special Items Costs to Achieve, Progress Voluntary Economic Adjusted Energy Opportunity Edwardsport Hedges (Mark- Discontinued Total Reported Earning

100. Slide 100: Available Liquidity Reconciliation

     Duke Energy Corporation Available Liquidity Reconciliation As of December 31, 2013 (In millions) Cash and Cash Equivalents $1,501 Short-Term Investments 44 Subtotal 1,545 Less: Amounts Held in Foreign Jurisdictions (1,139) Less: Unavailable Domestic Cash (24) $382 Plus: Remaining Availability under

101. Slide 101: 2014 Forecasted Cash Flow Reconciliation

     Duke Energy Corporation 2014 Forecasted Cash Flow Reconciliation, Required by SEC Regulation G 2014 Analyst Meeting February 18, 2014 ($ in millions) Forecast 2014 Primary Sources: Adjusted net income (1) (a) $ 3,200 Depreciation & amortization (a) 3,700 Deferred and accrued taxes (a) 1,340 Other so

Duke Energy — Q4 2013 Earnings Presentation on 6ix