Duke Energy Corporation (holding Company) · NYSE:DUK

Duke Energy Corporation (holding Company) — Q4 2016 Earnings Presentation

98 slides from Duke Energy Corporation (holding Company)'s earnings presentation, Feb 16, 2017

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

   FOURTH QUARTER EARNINGS REVIEW AND BUSINESS UPDATE FEB. 16, 2017 PRESENTED BY: LYNN GOOD | PRESIDENT, CHAIRMAN AND CEO STEVE YOUNG | EXECUTIVE VP AND CFO

2. Slide 2: Safe Harbor statement

   Safe Harbor statement This presentation includes forward-looking statements within the meaning of the federal securities laws. Actual results could differ materially from such forward-looking statements. The factors that could cause actual results to differ are discussed in the Appendix herein and i

3. Slide 3: We've delivered on our commitments

   We’ve delivered on our commitments COMPLETED THE PORTFOLIO TRANSITION… Duke Energy 2011 Duke Energy & & Progress Exit of merchant Post Transition Acquired Piedmont Energy Merge Progress Energy Merge 2014 Midwest Generation Business 2Q 2015 Natural text Gas 4Q 2016 ~25% ~75%       ~100% Duke Du

4. Slide 4: Complementary businesses with strong growth opportunities

   Complementary businesses with strong growth opportunities ELECTRIC UTILITIES 2017 ADJUSTED 2017-2021 2017 – 2021 & INFRASTRUCTURE EPS CONTRIBUTION GROWTH CAPITAL ADJUSTED EPS CAGR(1) Consolidated 4-6% 89% $30 B 8-12% 10-12% GAS UTILITIES & INFRASTRUCTURE 8% $6 B 4-5% COMMERCIAL RENEWABLES Electric U

5. Slide 5: Our investor proposition

   Our investor proposition A SOLID LONG-TERM HOLDING 4.5% ~8-10% 4 -6% DIVIDEND YIELD(1) ATTRACTIVE zzz HIGHLY WITH DIVIDEND RISK-ADJUSTED ACHIEVABLE GROWTH TOTAL SHAREHOLDER EPS GROWTH COMMITMENT(2) RETURN(3) THROUGH 2021(4) SUPPORTED BY THE STRENGTH OF OUR BALANCE SHEET (1) As of Feb. 15, 2017 (2) 4

6. Slide 6: Investing in infrastructure our customers value

   INVESTING IN INFRASTRUCTURE OUR CUSTOMERS VALUE. DELIVERING SUSTAINABLE GROWTH. FOURTH QUARTER 2016 EARNINGS REVIEW AND BUSINESS UPDATE 6

7. Slide 7: Advancing our strategic vision

   Advancing our strategic vision TRANSFORM THE CUSTOMER EXPERIENCE MODERNIZE THE GENERATE EXPAND NATURAL GAS ENERGY GRID CLEANER ENERGY INFRASTRUCTURE STAKEHOLDER ENGAGEMENT FOURTH QUARTER 2016 EARNINGS REVIEW AND BUSINESS UPDATE 7

8. Slide 8: The next decade

   The next decade ACHIEVE TOP QUARTILE CUSTOMER SATISFACTION MODERNIZE THE GENERATE EXPAND NATURAL GAS ENERGY GRID CLEANER ENERGY INFRASTRUCTURE $25 B $11 B 15% INVESTMENTS IN INVESTMENTS IN PROPORTION OF OUR GRID MODERNIZATION CLEANER GENERATION BUSINESS MIX FROM GAS OVER 10 YEARS OVER 10 YEARS(1) IN

9. Slide 9: Improving system performance through smarter energy infrastructure

   Improving system performance through smarter energy infrastructure GRID MODERNIZATION PROGRAMS More Smarter Reliable Storm Hardening Advanced Metering Grid MODERNIZE THE System ENERGY GRID Targeted Advanced Systems $25 B Undergrounding & Communication OF GRID INVESTMENTS OVER 10 YEARS Self Optimizin

10. Slide 10: Our generation investments result in significantly reduced emissions

    Our generation investments result in significantly reduced emissions FUEL DIVERSITY (MWh OUTPUT) 28% 34% GENERATE CLEANER ENERGY 61% 28% 35% $11 B INVESTMENTS IN 5% CLEANER GENERATION OVER 10 YEARS(1) 28% 32% 34% 35% 2% 4% 9% CO2 REDUCTION 2005(2) 2016(2) 2026(3) BY 2026(4) Coal / Oil Natural Gas FR

11. Slide 11: Expanding natural gas infrastructure with LDCs and midstream growth

    Expanding natural gas infrastructure with LDCs and midstream growth LOW VOLUMETRIC ATLANTIC COAST PIPELINE EXPOSURE DUE TO MOSTLY TO BRING SIGNIFICANT GAS FIXED MARGINS… SUPPLY TO UNDERSERVED 8% EASTERN CAROLINAS 14%  Additional power generation potential  LDC expansion for Piedmont Natural EXPAND

12. Slide 12: We are engaged with policy makers

    We are engaged with policy makers OUR TAX POLICY TAX REFORM OVERVIEW OBJECTIVES Administration Plan House GOP Blueprint RETAINING THE DEDUCTIBILITY OF  20% tax rate(1)  20% tax rate INTEREST EXPENSE  Retention of interest expense  No interest expense Planning deductibility deduction on new debt

13. Slide 13: 2017 earnings guidance and clean base year for long-term earnings growth

    2017 earnings guidance and clean base year for long-term earnings growth 2017 ~5% KEY 2017 GUIDANCE DRIVERS RANGE GROWTH IN CORE BUSINESSES Electric Utilities & Infrastructure $4.70 SINCE 2013(1) HISTORICAL GROWTH • Base rate increases IN CORE BUSINESSES(1)(2) • Investment riders • Major capital pro

14. Slide 14: Consolidated financial plan underpinned by significant growth capital

    Consolidated financial plan underpinned by significant growth capital 2017 - 2021 2017 – 2021 BALANCED GROWTH ADJUSTED EPS CAGR(1) 4 - 6% CAPITAL PLAN Consolidated GROWTH IN EPS(1) Electric THROUGH 2021 Distribution 36% 4-6% OFF 2017 GUIDANCE Commercial 8-12% Renewables, 3% MIDPOINT OF $4.60 Electri

15. Slide 15: Robust growth capital plan driving electric earnings base growth

    Robust growth capital plan driving electric earnings base growth 2017 - 2021 2017 - 2021 ELECTRIC UTILITIES & REGULATED ELECTRIC INFRASTRUCTURE EARNINGS BASE(1) GENERATE GROWTH CAPITAL PLAN CLEANER ENERGY Electric $74 Generation $71 28% $67 $64 Electric Distribution $30 B $60 45% $57 MODERNIZE THE E

16. Slide 16: Continuing to invest in the grid, with an emerging focus on the Carolinas

    Continuing to invest in the grid, with an emerging focus on the Carolinas 2017 - 2021 SPEND BY CATEGORY AMI DEPLOYMENT TODAY DE OHIO 100% DE CAROLINAS 30% DE KENTUCKY 27% DE INDIANA 4% 4% MODERNIZE THE DE FLORIDA DE PROGRESS 4% ENERGY GRID Smarter $10 B Targeted Advanced Metering 13% Grid OF GRID IN

17. Slide 17: Investing in cleaner energy for a low-carbon future

    Investing in cleaner energy for a low-carbon future SOLAR / HYDRO / CHP $100 M (various) GENERATE LEE CC CLEANER ENERGY $600 M (2017) WESTERN CAROLINAS $3.3 B MODERNIZATION $1.1 B (2019) TO BE INVESTED IN SOLAR / HYDRO / CHP REGULATED $400 M (various) NATURAL GAS-FIRED GENERATION OVER 5 YEARS(1) OSP

18. Slide 18: Managing regulatory lag to earn our allowed ROEs

    Managing regulatory lag to earn our allowed ROEs CUSTOMER GROWTH ADJUSTED AND VOLUME TRENDS BOOK ROEs(1) 1.3% 10.6% 1.2% 1.2% 10.0% 1.0% Carolinas EARNING 10.4% 10.0–10.5% ALLOWED ROEs 0.6% 0.6% 0.5% 11.2% WITH NO SIGNIFICANT 0.2% Florida 11.8% 11.4% RATE CASES SINCE 2013 11.0–11.5% 2014 2015 2016 2

19. Slide 19: Recovery of electric investments through frequent rate activity

    Recovery of electric investments through frequent rate activity JURISDICTION 2017 2018 2019 2020 2021 KEY DRIVERS  2017: Lee CCGT, coal ash DEC – NC File 2H2017 Planning for multiple rate cases  2018-2021: Grid modernization  2018-2021: Grid modernization, coal ash DEC – SC Planning for multiple

20. Slide 20: Robust growth capital plan driving gas earnings base growth

    Robust growth capital plan driving gas earnings base growth 2017 - 2021 2017 - 2021 GROWTH CAPITAL PLAN REGULATED GAS EARNINGS BASE(1) EXPAND NATURAL GAS INFRASTRUCTURE LDC $8.7 $8.8 $6 B Infrastructure $8.2 23% $7.3 GROWTH CAPITAL PLAN Gas $6.0 $5.2 FOR GAS UTILITIES AND Midstream $6 B Electric Uti

21. Slide 21: Scale and expertise from a decade of commercial renewables growth

    Scale and expertise from a decade of commercial renewables growth BUILDING SCALE SINCE ENTERING COMMERCIAL RENEWABLES SPACE IN 2007…  Invested more than $5 billion over the past 10 years Wind MW 2,893  Long-term power purchase Solar MW 2,350 GENERATE agreements with creditworthy CLEANER ENERGY 1,5

22. Slide 22: 2017 Financing plan: maintaining the strength of our balance sheet

    2017 Financing plan: maintaining the strength of our balance sheet FORECASTED 2017 KEY MESSAGES SUMMARY CASH FLOWS (1)  Committed to maintaining strong credit quality, Adjusted net income (based on midpoint of 2017 guidance range) $ 3,225 including investment-grade ratings Depreciation & amortizati

23. Slide 23: Dividend growth and payout

    91 years of consecutive quarterly cash dividends paid 70 - 75% DUK ANNUALIZED DIVIDEND PER SHARE(2) EXPECTED PAYOUT RATIO THROUGH 2021(1) 4 - 6% ANNUAL DIVIDEND GROWTH $2.88 $2.94 $3.00 $3.06 $3.12 $3.18 $3.30 $3.42 ~75% 2009 2010 2011 2012 2013 2014 2015 2016 2017E (3) OF TSR ACHIEVED THROUGH DIVID

24. Slide 24: The leading energy infrastructure company

    The leading energy infrastructure company Large-scale U.S. electric and Constructive regulatory gas utility creating a cleaner jurisdictions in desirable energy future communities INVESTING IN INFRASTRUCTURE OUR CUSTOMERS VALUE. DELIVERING SUSTAINABLE GROWTH. Proven track record of Solid long-term i

25. Slide 25: Our investor proposition

    Our investor proposition A SOLID LONG-TERM HOLDING 4.5% ~8-10% 4 -6% DIVIDEND YIELD(1) ATTRACTIVE zzz HIGHLY WITH DIVIDEND RISK-ADJUSTED ACHIEVABLE GROWTH TOTAL SHAREHOLDER EPS GROWTH COMMITMENT(2) RETURN(3) THROUGH 2021(4) SUPPORTED BY THE STRENGTH OF OUR BALANCE SHEET (1) As of Feb. 15, 2017 (2) 4

26. Slide 26: Appendix materials

    Appendix materials Item Slide(s) Duke Energy business segment structure 27 2016 performance against guidance assumptions 28-34 2017 guidance support 35-48 Financing assumptions 49-55 Regulatory overview 56-60 Electric Utilities & Infrastructure supplement 61-62 Gas Utilities & Infrastructure supplem

27. Slide 27: Duke Energy business segment structure

    Duke Energy business segment structure Duke Energy Electric Utilities Gas Utilities Commercial Other & Infrastructure & Infrastructure Renewables North and South Duke Energy Carolinas Piedmont Natural Gas Carolina North and South Commercial Duke Energy Progress Carolina Pipelines Duke Energy Florida

28. Slide 28: 2016 performance against guidance assumptions

    Duke Energy business segment structure 2016 performance against guidance assumptions FOURTH QUARTER 2016 EARNINGS REVIEW AND BUSINESS UPDATE 28

29. Slide 29: We deliver on our commitments

    We deliver on our commitments WE COMMIT… Piedmont International Operational Financial acquisition monetization excellence performance … AND WE DELIVER  Closed ahead of schedule  Closed transactions ahead of  Restored 2.6 million  Delivered earnings(1) at high  Accretive to adjusted EPS in sched

30. Slide 30: 4Q 2015 – 4Q 2016 adjusted diluted EPS waterfall

    4Q 2015 – 4Q 2016 adjusted diluted EPS waterfall Favorable Previously Electric Utilities Gas Utilities Commercial Change in 4Q 2016 Other(1) Disposed & Infrastructure & Infrastructure Renewables Share Count Weather Businesses $0.03 ($0.18) $0.87 ($0.01) $0.02 ($0.01) ($0.02) $0.11 Primarily $0.83due

31. Slide 31: Full year 2015 – full year 2016 adjusted diluted EPS waterfall

    Full year 2015 – full year 2016 adjusted diluted EPS waterfall Favorable Previously Electric Utilities Gas Utilities Commercial Change in Full Year 2016 Other(1) Disposed & Infrastructure & Infrastructure Renewables Share Count Weather Businesses $0.02 ($0.20) $0.11 $4.86 $0.14 ▲ Piedmont’s $0.02 ($

32. Slide 32: Key 2016 adjusted earnings guidance assumptions

    Key 2016 adjusted earnings guidance assumptions ($ in millions) Original 2016 2016 assumptions (1) Actual Adjusted segment income / (expense)(2): Electric Utilities & Infrastructure $3,006 $3,040 Gas Utilities & Infrastructure $93 $152 Commercial Renewables $130 $68 International Energy $173 $243 Ot

33. Slide 33: Weather normalized volume trends, by electric jurisdiction

    Weather normalized volume trends, by electric jurisdiction Rolling Twelve Months, as of Dec. 31, 2016 Duke Energy Duke Energy Duke Energy Duke Energy Duke Energy Electric Carolinas Progress Florida Indiana Ohio/Kentucky Utilities 2.2% 1.7% 0.8% 0.8% 0.7% 0.7% 0.3% 0.2% 0.2% 0.2% 0.2% 0.1% 0.1% 0.0%

34. Slide 34: Electric utilities quarterly weather impacts

    Electric utilities quarterly weather impacts Weather segment 2016 2015(2) income to normal: Pretax impact Weighted avg. EPS impact – Pretax impact Weighted avg. EPS impact – diluted shares favorable / shares favorable / (unfavorable) (unfavorable) First Quarter ($10) 689 ($0.01) $110 708 $0.10 Secon

35. Slide 35: 2017 guidance support

    2017 guidance support FOURTH QUARTER 2016 EARNINGS REVIEW AND BUSINESS UPDATE 35

36. Slide 36: Key 2017 forecast assumptions

    Key 2017 forecast assumptions  Normal weather  ~0.5% electric retail load growth  Wholesale growth (~0.5% EPS growth)  Lower Electric Utilities O&M; ~5% below 2016  Normal wind conditions for Commercial Renewables  Effective tax rate of ~32-33%  Average Brent crude oil of $58/barrel (impactin

37. Slide 37: Key 2017 adjusted earnings guidance assumptions

    Key 2017 adjusted earnings guidance assumptions ($ in millions) 2016 2017 2017 Interest Expense Assumption Actual Assumptions (Consolidated Total $1,974) Adjusted segment income/(expense) (1): Electric Utilities & Infrastructure $3,040 $3,109 $557 Gas Utilities & Infrastructure $152 $282 $1,205 Comm

38. Slide 38: 2016 – 2017 adjusted diluted EPS waterfall

    2016 – 2017 adjusted diluted EPS waterfall Electric Utilities Gas Utilities Commercial Share dilution 2016 Weather International & Infrastructure & Infrastructure Renewables & Other ($0.14) ($0.35) $0.26 $0.19 $0.04 ($0.09) ▲ Normal wind conditions ▲ New wind resources $0.04 ▲ Full year of Piedmont

39. Slide 39: Key 2017 earnings sensitivities

    Key 2017 earnings sensitivities Driver EPS Impact 100 bps change in earned return on equity +/- $0.40 Electric Utilities & $1 billion change in rate base +/- $0.08 Infrastructure 1% change in Electric Utilities volumes +/- $0.10 1% change in earned return on equity +/- $0.04 Gas Utilities & $200 mil

40. Slide 40: 2017 pension funding and costs

    2017 pension funding and costs  Duke Energy’s pension funding policy:  The company is committed to funding its pension obligations and has consistently contributed above legal minimum requirements Pension Costs 2015A 2016A 2017E ($ in millions)  In September 2013, Duke Energy adopted a de-risking

41. Slide 41: Electric utilities weather-normalized volume trends

    Electric utilities weather-normalized volume trends (in % change since prior year) Residential Commercial 1.0% 0.7% 0.5% 0.5% 0.5% 0.3% 0.1% -0.1% 2014A 2015A 2016A 2017E 2014A 2015A 2016A 2017E Industrial Electric Utilities Total 1.0% 1.0% 1.0% 0.6% 0.6% 0.5% 0.2% -0.6% 2014A 2015A 2016A 2017E 2014

42. Slide 42: Regulated utilities end of year earnings base

    Regulated utilities end of year earnings base(1) Electric Utilities Earnings Base ($ in billions) 2016A 2017E 2018E 2019E 2020E 2021E Duke Energy Carolinas $20.8 $21.8 $23.0 $24.2 $25.6 $27.1 Duke Energy Progress 14.5 15.3 16.7 17.9 19.0 19.9 Duke Energy Florida 11.4 12.4 12.9 13.6 14.3 15.4 Duke In

43. Slide 43: Major capital projects timeline and recovery mechanisms

    Major capital projects timeline and recovery mechanisms Spent 2017 2018 2019 2020 2021 Recovery Mechanism (Inception – 2016) Grid Modernization Indiana - TDSIC $ 100 M $1.2 billion Rider Recovery Ohio Ongoing $1.5 billion Rider Recovery All jurisdictions Ongoing $ 7 billion Base Rate Case(1) Environ

44. Slide 44: Capital expenditures profile

    Capital expenditures profile(1) ($ in millions) Electric Utilities & Infrastructure 2016A 2017E 2018E 2019E 2020E 2021E 2017 - 2021 (2) Electric Generation $ 1,766 $ 1,725 $ 1,550 $ 1,700 $ 1,600 $ 1,750 $ 8,325 Electric T ransmission 641 725 725 700 750 675 3,575 Electric Distribution 1,106 1,750 2

45. Slide 45: Capital expenditures by utility

    Capital expenditures by utility(1) ($ in millions) Duke Energy Carolinas 2016A 2017E 2018E 2019E 2020E 2021E 2017 - 2021 Electric Generation $663 $500 $450 $675 $675 $825 $3,125 Electric T ransmission 214 75 75 75 50 50 $325 Electric Distribution 392 700 1,250 1,225 1,150 1,225 $5,550 Environmental(

46. Slide 46: Capital expenditures by utility (continued)

    Capital expenditures by utility (continued)(1) ($ in millions) Duke Energy Florida 2016A 2017E 2018E 2019E 2020E 2021E 2017 - 2021 Electric Generation $660 $550 $250 $300 $250 $475 $1,825 Electric T ransmission 183 250 225 275 300 200 $1,250 Electric Distribution 166 250 275 400 450 475 $1,850 Envir

47. Slide 47: Capital expenditures by utility (continued)

    Capital expenditures by utility (continued)(1) ($ in millions) Duke Energy OH/KY Electric 2016A 2017E 2018E 2019E 2020E 2021E 2017 - 2021 Electric Generation $0 $25 $25 $25 $0 $0 $75 Electric T ransmission 75 125 150 100 125 100 600 Electric Distribution 168 225 225 250 250 250 1,200 (2) Environment

48. Slide 48: Environmental compliance expenditures by category

    Environmental compliance expenditures by category ($ in millions) Total Project Spend 2017 – 2021 Coal Ash Closure Costs Category 2017 – 2021 Costs To Date(2) Plan Air (MATS) $110 Duke Energy Carolinas $2,620 $460 $1,140 Water (316b) $320 Duke Energy Progress $2,550 $310 $1,420 Waste (conversions)(1

49. Slide 49: Financing assumptions

    Financing assumptions FOURTH QUARTER 2016 EARNINGS REVIEW AND BUSINESS UPDATE 49

50. Slide 50: 2017 financing plan

    2017 financing plan (as of Feb. 16, 2017) ($ in millions) $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $- Holding Duke Duke Duke Duke Duke Duke Piedmont Renewables Company Energy Energy Energy Energy Energy Energy Carolinas Progress Florida Indiana Ohio Kentucky 2017 Maturities and Debt Reduction(

51. Slide 51: Liquidity summary (as of Dec. 31, 2016)

    Liquidity summary (as of Dec. 31, 2016) ($ in millions) Duke Duke Duke Duke Duke Duke Piedmont Duke Energy Energy Energy Energy Energy Energy Natural Energy Carolinas Progress Florida Indiana Ohio Kentucky Gas Total Master Credit Facility (1) $ 3,400 $ 1,100 $ 1,000 $ 950 $ 600 $ 300 $ 150 $ - $ 7,5

52. Slide 52: Credit ratings (as of Feb. 16, 2017)

    Credit ratings (as of Feb. 16, 2017) Holding Companies Operating Companies Fitch Moody's S&P Fitch Moody's S&P DUKE ENERGY Negative Negative Stable DUKE ENERGY CAROLINAS Stable Stable Stable Senior Unsecured Debt BBB+ Baa1 BBB+ Senior Secured Debt AA- Aa2 A Senior Unsecured Debt A+ A1 A- Commercial

53. Slide 53: Simplified financing structure

    Simplified financing structure Duke Energy (HoldCo) Cinergy Corp. Progress Energy (HoldCo) (HoldCo) (1) Duke Energy Duke Energy Duke Energy Duke Energy Duke Energy Piedmont Natural Carolinas Ohio Indiana Progress Florida Gas Commercial Paper and LT Financings Duke Energy Duke Energy Renewables Money

54. Slide 54: Long-term debt maturities

    Long-term debt maturities(1) $2,644 $2,578 $118 $118 $2,168 Regulated Utilities Maturities Detail $198 ($ in millions) $1,233 2017 2018 2019 $1,718 Duke Energy Carolinas (2) $ 116 $ 1,204 $5 $871 Duke Energy Progress (2) 452 0 602 Duke Energy Florida (2) (3) 263 508 13 Duke Energy Indiana 3 3 62 Duk

55. Slide 55: Credit metrics

    Credit metrics(1) Committed to maintaining quality, investment-grade ratings (2) FFO/Debt 31% 31% 29% 27% 26% 26% 25% 24% 21% 22% 21% 21% 21% 22% 21% 20% 20% 18% 17% 16% 14% 2015A 2016A 2017E 2015A 2016A 2017E 2015A 2016A 2017E 2015A 2016A 2017E 2015A 2016A 2017E 2015A 2016A 2017E 2015A 2016A 2017E

56. Slide 56: Regulatory overview

    Regulatory overview FOURTH QUARTER 2016 EARNINGS REVIEW AND BUSINESS UPDATE 56

57. Slide 57: Overview of state commissions by jurisdiction

    Overview of state commissions by jurisdiction North South Florida Indiana Ohio Kentucky Tennessee Carolina Carolina Number of 7 7 5 5 5 3 5 Commissioners Term 8-year terms 4-year terms 4-year terms 4-year terms 5-year terms 4-year terms 6-year terms Appointed by Appointed by Appointed/ Appointed by

58. Slide 58: Current electric rate information by jurisdiction

    Current electric rate information by jurisdiction North South Ohio Kentucky Florida Indiana Carolina Carolina (Electric) (Electric) $15.7 B (1) (DEC) Retail Rate Base $10.0 B (2) $7.1 B (3) $1.1 B $600 M (4) $8.0 B (1) (DEP) $1.5 B (DEC) 3Q 2016 $0.4 M Wholesale Rate Base $1.1 B (2) $600 M $0 $2.9 B

59. Slide 59: Current electric rate information by jurisdiction (continued)

    Current electric rate information by jurisdiction (continued) General Rate Case Provisions North South Ohio Kentucky Florida Indiana Carolina Carolina (Electric) (Electric) Notice of Intent Required? Yes Yes Yes Yes(1) Yes Yes Notice Period 30 Days 30 Days 60 Days Varies 30 Days 28 Days Historical A

60. Slide 60: Current gas rate information by jurisdiction

    Current gas rate information by jurisdiction North South Ohio Kentucky Tennessee Carolina Carolina (Gas) (Gas) Rate Base ($M) $1,822 $224 $349 $900(1) $200(2) Allowed ROE 10.0% 10.2% 10.2% 9.84% 10.38% Allowed Equity 50.7% 53.0% 52.7% 53.3% 50.8% Effective Date of 1/1/14 11/1/16(3) 3/1/12 12/1/13 1/

61. Slide 61: Electric Utilities & Infrastructure supplement

    Electric Utilities & Infrastructure supplement FOURTH QUARTER 2016 EARNINGS REVIEW AND BUSINESS UPDATE 61

62. Slide 62: A portfolio of attractive utilities in constructive jurisdictions

    Electric utilities and infrastructure A portfolio of attractive utilities in constructive jurisdictions COMPETITIVE REGULATED ELECTRIC EIGHT UTILITIES IN CUSTOMER RATES 2016 EARNINGS BASE HIGH-QUALITY Avg. ¢/kWh Retail Rates DEO - Electric DEK - Electric REGIONS OF THE U.S. (12 mos. ending 6/30/16)(

63. Slide 63: Gas Utilities and Infrastructure Supplement

    Gas Utilities and Infrastructure Supplement FOURTH QUARTER 2016 EARNINGS REVIEW AND BUSINESS UPDATE 63

64. Slide 64: Gas Utilities and Infrastructure – at a glance

    Gas Utilities and Infrastructure – at a glance LDC Business Overview Joint Ventures(1)  Five state local distribution company  Atlantic Coast Pipeline – 47%  Serving over 1.5 million customers – ~600 mile, 1.5 Bcf/day, interstate pipeline in WV, VA, and NC – Projected investment of $2.4 - 2.6 bil

65. Slide 65: Constructive LDC regulatory environment

    Constructive LDC regulatory environment North Carolina Regulatory North Carolina IMR Highlights  On September 4, 2015, Piedmont reached an IMR settlement with the NC Public Staff  Allows revenue decoupling mechanisms  Settlement seeks to create regulatory certainty, balance  Integrity Management

66. Slide 66: Constructive LDC regulatory environment (continued)

    Constructive LDC regulatory environment (continued) South Carolina Regulatory Highlights Margin Stabilizing Mechanisms  Gas utilities are permitted to adjust rates annually under the Rate Stabilization Act (RSA) if earned ROE is outside a band of 1. Purchased Gas Adjustment All States ±50 basis poi

67. Slide 67: Commercial Renewables Supplement

    Commercial Renewables Supplement FOURTH QUARTER 2016 EARNINGS REVIEW AND BUSINESS UPDATE 67

68. Slide 68: Duke Energy commercial renewables asset locations

    Duke Energy commercial renewables asset locations(1) (1) A full list of generation facilities can be found at https://www.duke-energy.com//_/media/pdfs/our-company/renewables-n-america-facilities.pdf FOURTH QUARTER 2016 EARNINGS REVIEW AND BUSINESS UPDATE 68

69. Slide 69: Upcoming Events & Other

    Upcoming Events & Other FOURTH QUARTER 2016 EARNINGS REVIEW AND BUSINESS UPDATE 69

70. Slide 70: Upcoming events

    Upcoming events Event Date 1Q 2017 earnings call (tentative) May 9, 2017 2Q 2017 earnings call (tentative) August 3, 2017 3Q 2017 earnings call (tentative) November 3, 2017 FOURTH QUARTER 2016 EARNINGS REVIEW AND BUSINESS UPDATE 70

71. Slide 71: Investor relations app

    Investor relations app  Free mobile app for Investor Relations materials now available for iPhone, iPad, and Android mobile devices  The Duke Energy app provides mobile access to commonly used IR materials, including:  SEC Filings  Earnings Materials  Company Presentations  Press Releases  Se

72. Slide 72: Investor relations contact information

    Investor relations contact information Mike Callahan, Vice President Investor Relations  Michael.Callahan@duke-energy.com  (704) 382-1603 Mike Switzer, Director Investor Relations  Mike.Switzer@duke-energy.com  (704) 382-2516 Chris Bauer, Manager Investor Relations  Chris.Bauer@duke-energy.com

73. Slide 73: Safe Harbor statement

    Safe Harbor statement Safe Harbor statement This document includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are based on management’s beliefs and assumptions and can o

74. Slide 74: For additional information on Duke Energy

    For additional information on Duke Energy, please visit: www.duke-energy.com/investors FOURTH QUARTER 2016 EARNINGS REVIEW AND BUSINESS UPDATE 74

75. Slide 75: Non-GAAP Reconciliations

    Duke Energy Corporation Non-GAAP Reconciliations Fourth Quarter Earnings Review & Business Update February 16, 2017 Adjusted Diluted Earnings per Share (EPS) The materials for Duke Energy Corporation’s (Duke Energy) Fourth Quarter Earnings Review and Business Update on February 16, 2017, include a d

76. Slide 76: Non-GAAP measures: adjusted diluted EPS and segment income

    Adjusted diluted EPS is a non-GAAP financial measure as it represents diluted EPS from continuing operations attributable to Duke Energy Corporation shareholders, adjusted for the per-share impact of special items (as discussed above under Adjusted Diluted EPS). Due to the forward-looking nature of

77. Slide 77: Dividend Payout Ratio

    Dividend Payout Ratio The materials for Duke Energy’s Fourth Quarter Earnings Review and Business Update on February 16, 2017 include a discussion of Duke Energy’s forecasted dividend payout ratio of 70% - 75% through 2021 based upon adjusted diluted EPS. This payout ratio is a non-GAAP financial me

78. Slide 78: Available Liquidity

    Available Liquidity The materials for Duke Energy’s Fourth Quarter Earnings Review and Business Update on February 16, 2017 include a discussion of Duke Energy’s available liquidity balance. The available liquidity balance presented is a non-GAAP financial measure as it represents Cash and cash equi

79. Slide 79: Weather Normal

    Weather Normal The materials for Duke Energy’s Fourth Quarter Earnings Review and Business Update on February 16, 2017, include a discussion of Duke Energy’s adjusted diluted EPS on a weather normal basis for the year-to- date periods ended December 31, 2016, 2015, and 2014. Adjusted diluted EPS is

80. Slide 80: Reported to adjusted earnings reconciliation, Q4 2016

    DUKE ENERGY CORPORATION REPORTED TO ADJUSTED EARNINGS RECONCILIATION Three Months Ended December 31, 2016 (Dollars in millions, except per-share amounts) Special Items Costs to Cost International Reported Achieve Savings Energy Discontinued Total Adjusted Earnings Mergers Initiatives Operations Oper

81. Slide 81: Reported to adjusted earnings reconciliation, full year 2016

    DUKE ENERGY CORPORATION REPORTED TO ADJUSTED EARNINGS RECONCILIATION Twelve Months Ended December 31, 2016 (Dollars in millions, except per-share amounts) Special Items Costs to Cost Commercial International Reported Achieve Savings Renewables Energy Discontinued Total Adjusted Earnings Mergers Init

82. Slide 82: Reported to adjusted earnings reconciliation, Q4 2015

    DUKE ENERGY CORPORATION REPORTED TO ADJUSTED EARNINGS RECONCILIATION Three Months Ended December 31, 2015 (Dollars in millions, except per-share amounts) Special Items Ash Basin Economic Costs to Settlement Cost International Hedges Reported Achieve Edwardsport and Savings Energy (Mark-to- Discontin

83. Slide 83: Reported to adjusted earnings reconciliation, full year 2015

    DUKE ENERGY CORPORATION REPORTED TO ADJUSTED EARNINGS RECONCILIATION Twelve Months Ended December 31, 2015 (Dollars in millions, except per-share amounts) Special Items Ash Basin Costs to Midwest Settlement Cost International Reported Achieve Edwardsport Generation and Savings Energy Discontinued To

84. Slide 84: Reported to adjusted earnings reconciliation, full year 2014

    DUKE ENERGY CORPORATION REPORTED TO ADJUSTED EARNINGS RECONCILIATION Twelve Months Ended December 31, 2014 (Dollars in millions, except per-share amounts) Special Items Costs to Economic Achieve, Midwest International Hedges Reported Progress Asset Generation Litigation Asset Energy (Mark-to- Discon

85. Slide 85: Adjusted effective tax reconciliation

    DUKE ENERGY CORPORATION ADJUSTED EFFECTIVE TAX RECONCILIATION Three Months and Year Ended December 31, 2016 (Dollars in Millions) Three Months Ended Year Ended December 31, 2016 December 31, 2016 Balance Effective Tax Rate Balance Effective Tax Rate Reported Income From Continuing Operations Before

86. Slide 86: Available Liquidity Reconciliation

    Duke Energy Corporation Available Liquidity Reconciliation As of December 31, 2016 (In millions) Cash and Cash Equivalents $ 392 Less: Certain Amounts Held in Foreign Jurisdictions (63) Less: Unavailable Domestic Cash (32) 297 Plus: Remaining Availability under Master Credit Facility (a) 5,634 Total

87. Slide 87: Operations, Maintenance and Other Expense

    Duke Energy Corporation Operations, Maintenance and Other Expense (In millions) Actual Actual Actual Forecast December 31, 2014 December 31, 2015 December 31, 2016 December 31, 2017 Operation, maintenance and other(a) $5,506 $5,539 $6,085 $6,201 Adjustments: Costs to Achieve, Mergers (b) (178) (69)

88. Slide 88: 2017 Forecasted Cash Flow Reconciliation

    Duke Energy Corporation 2017 Forecasted Cash Flow Reconciliation, Required by SEC Regulation G 2017 Analyst Meeting February 16, 2017 ($ in millions) Forecast 2017 Primary Sources: Adjusted net income (1) (a) $ 3,225 Depreciation & amortization (a) 4,100 Deferred and accrued taxes (a) 1,450 Other so

89. Slide 89: Adjusted book return on equity, 2016

    DUKE ENERGY CORPORATION ADJUSTED BOOK RETURN ON EQUITY (ROEs) For the period ended December 31, 2016 dollars in millions Duke Energy Duke Energy Duke Energy Duke Energy Duke Energy Ohio Reportable Carolinas Progress Total Carolinas Florida Indiana Segments Reported Net Income 2016 $ 1,166 $ 599 $ 1,

90. Slide 90: Adjusted book return on equity, 2015

    DUKE ENERGY CORPORATION ADJUSTED BOOK RETURN ON EQUITY (ROEs) For the period ended December 31, 2015 dollars in millions Duke Energy Duke Energy Duke Energy Duke Energy Duke Energy Ohio Reportable Carolinas Progress Total Carolinas Florida Indiana Segments Reported Net Income 2015 $ 1,081 $ 566 $ 1,

91. Slide 91: Adjusted book return on equity, 2014

    DUKE ENERGY CORPORATION ADJUSTED BOOK RETURN ON EQUITY (ROEs) For the period ended December 31, 2014 dollars in millions Duke Energy Duke Energy Duke Energy Duke Energy Duke Energy Ohio Reportable Carolinas Progress Total Carolinas Florida Indiana Segments Reported Net Income 2014 $ 1,072 $ 467 $ 1,

92. Slide 92: FFO to Debt Calculation – Duke Energy Corporation

    FFO to Debt Calculation Duke Energy Corporation (in millions) Years Ended December 31, 2017 2016 2015 Forecast Actual Actual Cash From Operations $ 6,734 $ 6,798 $ 6,676 Working capital adjustment (1) 184 345 (181) Capitalized Interest (124) (100) (98) CR3 securitization adjustment (55) (35) ‐ Other

93. Slide 93: FFO to Debt Calculation – Duke Energy Carolinas

    FFO to Debt Calculation Duke Energy Carolinas (in millions) Years Ended December 31, 2017 2016 2015 Forecast Actual Actual Cash From Operations $ 2,556 $ 2,976 $ 2,373 Working capital adjustment (1) 88 (333) 128 Capitalized Interest (46) (38) (38) Funds From Operations 2,598 2,605 2,463 ARO spend ‐

94. Slide 94: FFO to Debt Calculation – Duke Energy Progress

    FFO to Debt Calculation Duke Energy Progress (in millions) Years Ended December 31, 2017 2016 2015 Forecast Actual Actual Cash From Operations $ 1,305 $ 1,932 $ 1,594 Working capital adjustment (1) 106 (502) (219) Capitalized Interest (22) (17) (20) Other 3 2 2 Funds From Operations 1,392 1,415 1,35

95. Slide 95: FFO to Debt Calculation – Duke Energy Florida

    FFO to Debt Calculation Duke Energy Florida (in millions) Years Ended December 31, 2017 2016 2015 Forecast Actual Actual Cash From Operations $ 1,155 $ 844 $ 1,373 Working capital adjustment (1) 3 252 (159) Capitalized Interest (27) (14) (4) CR3 securitization adjustment (55) (35) ‐ Other 14 13 12 F

96. Slide 96: FFO to Debt Calculation – Duke Energy Indiana

    FFO to Debt Calculation Duke Energy Indiana (in millions) Years Ended December 31, 2017 2016 2015 Forecast Actual Actual Cash From Operations $ 1,065 $ 871 $ 1,176 Working capital adjustment (1) (78) 132 (225) Capitalized Interest (15) (7) (6) Funds From Operations 972 996 945 ARO spend ‐ 46 19 ARO

97. Slide 97: FFO to Debt Calculation – Duke Energy Ohio

    FFO to Debt Calculation Duke Energy Ohio (in millions) Years Ended December 31, 2017 2016 2015 Forecast Actual Actual Cash From Operations $ 425 $ 425 $ 667 Working capital adjustment (1) 73 15 (91) Capitalized Interest (9) (8) (10) Funds From Operations 489 432 566 ARO spend ‐ 5 4 ARO spend, net of

98. Slide 98: FFO to Debt Calculation – Piedmont Natural Gas

    FFO to Debt Calculation Piedmont Natural Gas (in millions) Years Ended December 31, October 31, 2017 2016 2015 Forecast Actual Actual Cash From Operations $ 405 $ 308 $ 372 Working capital adjustment (1) 94 101 (37) Funds From Operations 499 409 335 ARO spend ‐ 6 6 ARO spend, net of tax at 38% ‐ 4 4

Duke Energy — Q4 2016 Earnings Presentation on 6ix