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Analysts: Bill Currens Office: 704.382.1603

Nov. 5, 2015

Duke Energy reports third quarter 2015 financial results‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌

• Third quarter 2015 adjusted diluted earnings per share (EPS) were $1.47, compared to $1.40 for the third quarter of 2014

• Reported diluted EPS of $1.35 for third quarter 2015, compared to $1.80 for the third quarter of 2014

• Company narrows its 2015 adjusted diluted earnings guidance range from

  $4.55 to $4.75 per share to $4.55 to $4.65 per share

  CHARLOTTE, N.C. - Duke Energy today announced third quarter 2015 adjusted diluted EPS of $1.47, compared to $1.40 for the third quarter of 2014. Third quarter 2015 reported EPS was $1.35, compared to $1.80 for the same period last year.

  Earnings for the third quarter of 2015 were higher than the prior year quarterly results, primarily due to warmer weather compared to the previous year. The company also experienced strong growth in the Regulated Utilities business, including the impact of the recently completed North Carolina Eastern Municipal Power Agency (NCEMPA) acquisition.

  During 2015, the company has been able to offset weakness in the International business with favorable weather, solid operational performance in the regulated business, and benefits from closing certain strategic initiatives earlier than anticipated. The company has narrowed its 2015 adjusted diluted earnings guidance range from

  $4.55 to $4.75 per share to $4.55 to $4.65 per share.

  'I am pleased with our overall operational and financial performance to date in 2015,' said Lynn Good, president and CEO. 'We are on-track to achieve our financial objectives for the year and our regulated generation fleet continues to reliably meet customer needs.

  'Additionally, we are taking significant steps to grow our low-risk regulated business mix as highlighted by last week's announced acquisition of Piedmont Natural Gas, which provides us with additional capabilities and growth potential around natural gas infrastructure,' Good added.

  
  

  Business unit results

  In addition to the summary business unit discussion below, a comprehensive table of quarterly and year-to-date adjusted earnings per share drivers by segment compared to the prior year is provided on pages 16 and 17.

  The discussion below of third quarter results includes adjusted segment income, which is a non-GAAP financial measure. The tables on pages 25 through 28 present a reconciliation of reported results to adjusted results.

  
  

  Regulated Utilities

  Regulated Utilities recognized third quarter 2015 adjusted segment income of $965 million, compared to $920 million in the third quarter 2014, an increase of 7 cents per share, excluding the benefit of the $1.5 billion accelerated stock repurchase program that was completed in June.

  Higher quarterly results at Regulated Utilities were primarily driven by:

• Favorable weather (+$0.09 per share) driven by warmer temperatures in the Carolinas. This was the first above normal summer weather experienced since 2012

• Higher revenues from increased pricing and riders (+$0.07 per share) due to increased energy efficiency programs and prior year true-ups that did not recur

• Increased wholesale net margins (+$0.05 per share) resulting from growth in contracted amounts and earnings from the long-term wholesale contract associated with the recent NCEMPA asset purchase

  These favorable drivers were partially offset by:

• Higher O&M expense (-$0.06 per share) due to the timing of planned work, increased costs related to the recent NCEMPA asset purchase and storm costs

• Higher effective tax rate (-$0.04 per share) primarily due to additional deductions in the prior year

  On a year-to-date basis, Regulated Utilities recognized adjusted segment income of

  $2,371 million, compared to $2,346 million for the same period last year, an increase of 3 cents per share, excluding the benefit of the accelerated stock repurchase program.

  Higher year-to-date results at Regulated Utilities were primarily driven by:

• Higher revenues from increased pricing and riders (+$0.14 per share) due to increased energy efficiency programs and prior year true-ups that did not recur, partially offset by a regulatory order in Ohio related to energy efficiency (-$0.03 per share)

  
  

• Favorable weather (+$0.11 per share) across Duke Energy's service territories

• Increased wholesale net margins (+$0.12 per share) due to growth in contracted amounts and earnings from the long-term wholesale contract associated with the recent NCEMPA asset purchase

• Higher AFUDC equity (+$0.03 per share) due to increased capital spending

• Higher weather-normal retail volumes (+$0.03 per share) of 0.4 percent compared to 2014

  These favorable drivers were partially offset by:

• Higher O&M expense (-$0.19 per share) due to timing of planned outages, increased costs related to the recent NCEMPA asset purchase and nuclear outage cost levelization. These costs were partially offset by lower storm costs.

• Higher effective tax rate (-$0.08 per share) primarily due to a favorable prior year state tax settlement and additional deductions in the prior year

• Higher depreciation and amortization expense (-$0.04 per share) primarily resulting from additional plant in-service

  
  

  International Energy

  International Energy recognized third quarter 2015 adjusted segment income of $69 million, compared to $80 million in the third quarter 2014, a decrease of 2 cents per share, excluding the benefit of the accelerated stock repurchase program.

  Lower quarterly results at International Energy were primarily driven by:

• Lower results in Latin America (-$0.01 per share) principally driven by unfavorable foreign exchange rates and an asset impairment in Ecuador. These drivers were partially offset by lower purchased power costs in Brazil.

• Lower margins at National Methanol (-$0.01 per share) due to lower MTBE prices

  On a year-to-date basis, International Energy recognized adjusted segment income of

  $157 million, compared to $356 million for the same period in 2014, a decrease of 29 cents per share, excluding the benefit of the accelerated stock repurchase program.

  Lower year-to-date earnings at International Energy were driven by:

• Weaker results in Latin America (-$0.25 per share) primarily due to lower sales volumes and higher purchased power costs resulting from ongoing drought conditions and decreased demand in Brazil, a prior-year tax benefit in Chile,

  
  

  unfavorable foreign currency exchange rates, and an asset impairment in Ecuador

• Lower margins at National Methanol (-$0.04 per share) largely driven by lower MTBE and methanol prices

Commercial Portfolio

Subsequent to the sale of its nonregulated Midwest Commercial Generation Business to Dynegy Inc. in April, Commercial Portfolio (formerly Commercial Power) includes Duke Energy's unregulated renewable assets as well as its commercial electric and gas transmission investments.

Commercial Portfolio recognized a third quarter 2015 adjusted segment loss of $4 million, compared to income of $51 million in the third quarter 2014, a decrease of 8 cents per share. The decline in Commercial Portfolio's quarterly earnings was primarily due to the sale of the Midwest Generation business to Dynegy, which was completed in April 2015.

On a year-to-date basis, Commercial Portfolio recognized adjusted segment income of

$99 million, compared to $77 million in the comparable year-to-date period of 2014, an increase of 3 cents per share.

Commercial Portfolio's higher year-to-date earnings were driven by higher results from the Midwest Generation fleet (+$0.06 per share), which was sold in April 2015, partially offset by lower earnings from the renewables fleet (-$0.01 per share) resulting from lower wind resources during 2015.

Other

On an adjusted basis, Other primarily includes corporate interest expense not allocated to the business units, results from Duke Energy's captive insurance company, other investments, and quarterly income tax levelization adjustments.

Other recognized a third quarter 2015 adjusted net expense of $19 million, compared to net expense of $58 million in the third quarter 2014, an improvement of 6 cents per share, excluding the impact of the accelerated stock repurchase program. Other's quarterly results were primarily driven by a prior year tax charge and quarterly tax levelization, including the recognition of renewable tax credits.

On a year-to-date basis, Other recognized adjusted net expense of $77 million, compared to $171 million in the comparable period of 2014, an improvement of 14 cents per share, excluding the impact of the accelerated stock repurchase program. Other's year-to-date results were primarily driven by favorable tax resolution, a prior year tax charge and quarterly tax levelization, including the recognition of renewable tax credits.