BUSINESS UPDATE May 9, 2017 PRESENTED BY: LYNN GOOD | CHAIRMAN, - PowerPoint PPT Presentation

FIRST QUARTER EARNINGS REVIEW AND BUSINESS UPDATE May 9, 2017 PRESENTED BY: LYNN GOOD | CHAIRMAN, PRESIDENT AND CEO STEVE YOUNG | EXECUTIVE VP AND CFO

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 in Duke Energy’s SEC filings, available at www.sec.gov. Regulation G disclosure In addition, today's discussion includes certain non-GAAP financial measures as defined under SEC Regulation G. A reconciliation of those measures to the most directly comparable GAAP measures is available in the Appendix herein and on our Investor Relations website at www.duke-energy.com/investors/ . FIRST QUARTER 2017 EARNINGS REVIEW AND BUSINESS UPDATE 2

Topics for today’s call BUSINESS UPDATE Lynn Good, Chairman, President & CEO  First Quarter 2017 Financial and Operational Highlights  Our Strategic Vision Markland hydro station, Indiana  Grid Modernization  Update on Strategic Initiatives FINANCIAL UPDATE Steve Young, Executive VP & CFO  First Quarter 2017 Earnings Drivers Dogwood solar facility, North Carolina  Economic Conditions and Load Growth Trends  Regulatory Update  Key Investor Considerations Piedmont resource center, Tennessee FIRST QUARTER 2017 EARNINGS REVIEW AND BUSINESS UPDATE 3

First quarter 2017 financial and operational highlights $1.02 REPORTED DILUTED EPS Financial Performance Operational Highlights FOR 1Q 2017 COMPARED TO $1.01 IN 1Q 2016  Ongoing investments driving solid growth in electric and  Midwest LDCs received $1.04 gas utilities 2016 American Gas ADJUSTED DILUTED EPS  Warm winter weather Association Safety FOR 1Q 2017 Achievement award compared to normal across COMPARED TO $1.13 IN 1Q 2016 each of our jurisdictions  Piedmont named a Top  Cost management to Utility Environmental address warm weather, in Champion of 2017 addition to ongoing ON TRACK efficiency efforts TO ACHIEVE 2017 EPS GUIDANCE RANGE OF $4.50 - $4.70 (1) (1) Based on adjusted diluted EPS FIRST QUARTER 2017 EARNINGS REVIEW AND BUSINESS UPDATE 4

INVESTING IN INFRASTRUCTURE OUR CUSTOMERS VALUE. DELIVERING SUSTAINABLE GROWTH. FIRST QUARTER 2017 EARNINGS REVIEW AND BUSINESS UPDATE 5

Advancing our strategic vision for 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 10 YEARS FROM 8% TODAY (2) REVENUES RECOVERED VIA ALL MODERN REGULATORY MECHANISMS JURISDICTIONS WITHIN 10 YEARS (1) Includes natural gas and renewables generation. Excludes nuclear relicensing and new nuclear projects FIRST QUARTER 2017 EARNINGS REVIEW AND BUSINESS UPDATE 6 (2) Based on adjusted diluted EPS

Building a smarter energy future TARGETED UNDERGROUNDING MODERNIZE THE ENERGY GRID SELF- TRANSMISSION OPTIMIZATION IMPROVEMENTS $25 B OF GRID INVESTMENTS OVER 10 YEARS DISTRIBUTION ENTERPRISE HARDENING & SYSTEM UPGRADES RESILIENCY #1 DUKE’S T& D SYSTEM IS LARGEST IN THE U.S . WITH OVER 300K LINE MILES ADVANCED COMMUNICATION METERING NETWORK 50%  INFRASTRUCTURE UPGRADES (AMI) REDUCTION IN OUTAGE FREQUENCY AND DURATION OVER NEXT 10 YEARS FIRST QUARTER 2017 EARNINGS REVIEW AND BUSINESS UPDATE 7

Engaging stakeholders on our grid modernization plans POWER/FORWARD CAROLINAS BUILDING A BETTER WHILE GENERATING JOBS ENERGY FUTURE FOR AND STIMULATING MODERNIZE THE ECONOMIC GROWTH (1) NORTH CAROLINA ENERGY GRID PEOPLE/POWER Communication Self- Network Upgrades Optimization 13,907 $0.5B $1.3B Average jobs Targeted ENGAGE Undergrounding ECONOMIC/POWER STAKEHOLDERS $4.9B $13 B Distribution Hardening & $21.5 billion Resiliency 10-year total $3.5B economic output $13 B Transmission Improvements FUTURE/POWER 10-YEAR POWER/FORWARD $2.2B AMI Enterprise CAROLINAS INITIATIVE $0.5B System Upgrades A smarter, safer ANNOUNCED APRIL 12 $0.1B energy system for our customers and communities (1) Source: EY Quantitative Economics and Statistics (QUEST). Quantifying the potential North Carolina impacts of Duke Energy’s capital improvements. March 2017 FIRST QUARTER 2017 EARNINGS REVIEW AND BUSINESS UPDATE 8

Making progress on our strategic initiatives STATUS UPDATE  Power/Forward Carolinas Announcement  Over 2 million smart meters deployed to-date, including over 1 million in the Carolinas  Indiana grid modernization (TDSIC) underway MODERNIZE THE ENERGY GRID  W.S. Lee CCGT on track ENGAGE TRANSFORM THE  Citrus County CCGT on track STAKEHOLDERS CUSTOMER  Western Carolinas Modernization Project on track EXPERIENCE GENERATE CLEANER ENERGY  Sabal Trail on track  ACP awaiting Final Environmental Impact Statement  Constitution permitting still pending  Gas infrastructure for W.S. Lee (Piedmont) and EXPAND NATURAL GAS Citrus County (Sabal Trail) on track INFRASTRUCTURE FIRST QUARTER 2017 EARNINGS REVIEW AND BUSINESS UPDATE 9

1Q 2017 Adjusted diluted EPS summary and primary drivers ADJUSTED DILUTED EARNINGS PER SHARE SEGMENT RESULTS VS. PRIOR YEAR QUARTER (1)(2) Electric Utilities & Infrastructure, -$29 M (-$0.03 per share) $1.13 ▼ Warm winter weather (-$0.14) $1.04 ▲ Lower O&M due to reduced storm restoration costs compared to prior year and ongoing cost savings ▲ Higher retail revenues from increased pricing, riders and volumes Gas Utilities & Infrastructure, +$101 M (+$0.14 per share) 1Q 2016 1Q 2017 ▲ Contribution from Piedmont Natural Gas (3) WEATHER-NORMAL Commercial Renewables, -$1 M (Flat) ADJUSTED DILUTED ▲ Higher earnings from new projects brought on-line in 2016 EARNINGS PER SHARE ▼ Lower solar ITCs in the current year $1.20 Other, -$5 M (-$0.01 per share) $1.14 ▼ Higher interest expense (3) ▲ Higher earnings from NMC Share Dilution (-$0.02 per share) PREVIOUSLY DISPOSED BUSINESS (4) (5) 1Q 2016 1Q 2017 International Energy, -$117 M (-$0.17 per share) ON TRACK (1) Detailed drivers of adjusted segment income (expense) are available in the 1Q 2017 earnings release located on our Investor Relations website at www.duke-energy.com/investors/ TO ACHIEVE 2017 EPS (2) Prior year segment income recast to conform to the new segment structure (3) Piedmont’s earnings contribution excludes financing costs recorded in Other GUIDANCE RANGE (4) Includes results from International Energy, which was sold in Dec. 2016, and $0.05 of abnormal storm expense in 1Q 2016 OF $4.50 - $4.70 (6) (5) Weather-normal adjustment includes $0.15 in Electric Utilities and Infrastructure and $0.01 in Gas Utilities and Infrastructure related to Midwest LDCs (6) Based on adjusted diluted EPS FIRST QUARTER 2017 EARNINGS REVIEW AND BUSINESS UPDATE 10

Electric utilities & infrastructure weather-normal volume trends Rolling 12 Month RESIDENTIAL Retail Sales Grow th  Continued strength in average customer growth (+1.4% over the rolling 12 months) partially offset by lower usage per customer 0.6% 0.2% 0.5%  New permit applications for single-family housing starts are up over 10% across all of our service territories -0.6% COMMERCIAL  Office vacancies continue to decline even as new office space is Residential Commercial Industrial Total Retail being added  Consumers are driving sales in tourism and amusement activities Annual Grow th in Number (restaurants, lodging, etc.) of Residential Customers INDUSTRIAL 1.6% 1.4% 1.4%  Industries supporting sales to U.S. consumers (construction, home furnishings) are showing resilience as the job market and 1.1% incomes continue to improve  Industries more heavily dependent on global trade continue to face headwinds from a continued strong dollar and geopolitical uncertainties Midwest Carolinas Florida Total Excluding the impact of leap day in the prior year, rolling 12 month retail volumes w ere up 0.5% FIRST QUARTER 2017 EARNINGS REVIEW AND BUSINESS UPDATE 11

Moving forward with key regulatory filings FILING KEY STATUS TYPE DRIVERS  Osprey rates  Osprey CCGT Generation Base Rate DUKE ENERGY effective Feb. ‘17 Adjustment acquisition  Hines chiller rates FLORIDA  Hines Chiller Project (GBRA) effective Apr. ’17 ENGAGE STAKEHOLDERS Transmission,  TDSIC-1 rates  TDSIC-1 investments Distribution and Storage effective Apr. ‘17 through Jun. ’16 DUKE ENERGY System Improvement  TDSIC-2 filed on  TDSIC-2 investments INDIANA Charge Apr. 25, 2017 through Dec. ‘16 (TDSIC) Nuclear projects, ON TRACK Sutton CTs, Asheville Filed notice on DUKE ENERGY General Rate Case CWIP, Hurricane TO ACHIEVE 2017 PROGRESS May 2 with NCUC Matthew, utility- REGULATORY owned solar, coal ash PRIORITIES Lee CCGT, nuclear Plan to file DUKE ENERGY General Rate Case projects, AMI, utility- Summer 2017 CAROLINAS owned solar, coal ash Integrity and safety Integrity Management NC: Filed May 1 for PIEDMONT investments through Rider rates effective June 1 NATURAL GAS Mar. 1, 2017 FIRST QUARTER 2017 EARNINGS REVIEW AND BUSINESS UPDATE 12