Duke Energy : Fourth Quarter and Year-End 2018 Non-GAAP reconciliation

Duke Energy Corporation Non-GAAP Reconciliations

Fourth Quarter Earnings Review & Business Update February 14, 2019

Adjusted Diluted Earnings per Share (EPS)

The materials for Duke Energy Corporation's (Duke Energy) Fourth Quarter Earnings Review and Business Update on February 14, 2019, include a discussion of adjusted diluted EPS for the quarters and year-to-date periods ended December 31, 2018 and 2017.

The non-GAAP financial measure, adjusted diluted EPS, represents diluted EPS from continuing operations attributable to Duke Energy Corporation common stockholders, adjusted for the per share impact of special items. As discussed below, special items represent certain charges and credits, which management believes are not indicative of Duke Energy's ongoing performance.

Management believes the presentation of adjusted diluted EPS provides useful information to investors, as it provides them with an additional relevant comparison of Duke Energy's performance across periods. Management uses this non-GAAP financial measure for planning and forecasting and for reporting financial results to the Duke Energy Board of Directors (Board of Directors), employees, stockholders, analysts and investors. Adjusted diluted EPS is also used as a basis for employee incentive bonuses. The most directly comparable GAAP measure for adjusted diluted EPS is reported diluted EPS attributable to Duke Energy Corporation common stockholders. Reconciliations of adjusted diluted EPS for the quarters and year-to-date periods ended December 31, 2018 and 2017, to the most directly comparable GAAP measures are included herein.

Special items included in the periods presented include the following items, which management believes do not reflect ongoing costs:

• • Costs to Achieve Piedmont Merger represents charges resulting from strategic acquisitions.

• • Regulatory and Legislative Impacts in 2018 represents charges related to the Duke Energy Progress and Duke Energy Carolinas North Carolina rate case orders and the repeal of the South Carolina Base Load Review Act. For 2017, it represents charges related to the Levy nuclear project in Florida and the Mayo Zero Liquid Discharge and Sutton combustion turbine projects in North Carolina.

• • Impairment Charges in 2018 represents an asset impairment at Citrus County, a goodwill impairment at Commercial Renewables and an other-than-temporary impairment of an investment in Constitution Pipeline Company, LLC. For 2017, the charges represent goodwill and other-than-temporary asset impairments at Commercial Renewables.

• • Sale of Retired Plant represents the loss associated with selling Beckjord, a nonregulated generating facility in Ohio.

• • Impacts of the Tax Act represents amounts recognized related to the Tax Cuts and Jobs Act.

• • Severance charges relate to company-wide initiatives, excluding merger integration, to standardize processes and systems, leverage technology and workforce optimization.

Adjusted Diluted EPS Guidance

The materials for Duke Energy's Fourth Quarter Earnings Review and Business Update on February 14, 2019, include a reference to forecasted 2018 adjusted diluted EPS guidance range of $4.65 - $4.85 per share, narrowed from $4.55 - $4.85 per share during the third quarter of 2018 and the forecasted 2019 adjusted diluted EPS guidance range of $4.80 - $5.20 per share. The materials also reference the long-term range ofannual growth of 4% - 6% through 2023 in adjusted diluted EPS (on a compound annual growth rate (CAGR) basis). 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 this non-GAAP financial measure for future periods, information to reconcile it to the most directly comparable GAAP financial measure is not available at this time, as management is unable to project all special items for future periods, such as legal settlements, the impact of regulatory orders or asset impairments.

Adjusted Segment Income and Adjusted Other Net Expense

The materials for Duke Energy's Fourth Quarter Earnings Review and Business Update on February 14, 2019, include a discussion of adjusted segment income and adjusted other net expense for the year-to-date period ended December 31, 2018 and a discussion of 2018 and 2019 forecasted adjusted segment income and forecasted adjusted other net expense.

Adjusted segment income and adjusted other net expense are non-GAAP financial measures, as they represent reported segment income and other net expense adjusted for special items (as discussed above under Adjusted Diluted EPS). Management believes the presentation of adjusted segment income and adjusted other net expense provides useful information to investors, as it provides an additional relevant comparison of a segment's or Other's performance across periods. When an EPS amount is provided for a segment income driver, the per share impact is derived by taking the pretax amount of the item less income taxes based on the consolidated statutory tax rate of 38 percent, except for Duke Energy Renewables, which uses an effective tax rate, divided by the Duke Energy weighted-average diluted shares outstanding for the period. The most directly comparable GAAP measures for adjusted segment income and adjusted other net expense are reported segment income and other net expense, which represents segment income and other net expense from continuing operations, including any special items. A reconciliation of adjusted segment income and adjusted other net expense for the year-to-date period ended December 31, 2018, to the most directly comparable GAAP measures is included herein. Due to the forward-looking nature of any forecasted adjusted segment income and forecasted other net expense and any related growth rates for future periods, information to reconcile these non-GAAP financial measures to the most directly comparable GAAP financial measures are not available at this time, as the company is unable to forecast all special items, as discussed above under Adjusted Diluted EPS Guidance.

Adjusted Effective Tax Rate (ETR)

The materials for Duke Energy's Fourth Quarter Earnings Review and Business Update on February 14, 2019 include a discussion of the adjusted ETR for the year-to-date period ended December 31, 2018. The materials also include a discussion of the 2018 and 2019 forecasted adjusted ETR. Adjusted ETR is a non-GAAP financial measure as the rate is calculated using a pretax earnings and income tax expense, both adjusted for the impact of special items, as discussed above under Adjusted Diluted EPS. The most directly comparable GAAP measure for adjusted ETR is reported effective tax rate. A reconciliation of the adjusted ETR for the year-to-date period ended December 31, 2018 to the most directly comparable GAAP measure is included herein. Due to the forward-looking nature of the 2018 and the 2019 forecasted adjusted ETR, information to reconcile it to the most directly comparable GAAP financial measure is not available at this time, as management is unable to project all special items, as discussed above under Adjusted Diluted EPS Guidance.

Dividend Payout Ratio

The materials for Duke Energy's Fourth Quarter Earnings Review and Business Update on February 14, 2019 include a discussion of Duke Energy's forecasted dividend payout ratio of 65% - 75% based upon adjusted diluted EPS. This payout ratio is a non-GAAP financial measure as it is based upon forecasted 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. The most directly comparable GAAP measure for adjusted diluted EPS is reported diluted EPS from continuing operations attributable to Duke Energy Corporation common shareholders. Due to the forward-looking nature of this non-GAAP financial measure for future periods, information to reconcile it to the most directly comparable GAAP financial measure is not available at this time, as management is unable to project all special items, as discussed above under Adjusted Diluted EPS Guidance.

Adjusted Book Return on Equity (ROE)

The materials for Duke Energy's Fourth Quarter Earnings Review and Business Update on February 14, 2019 include a reference to the historical and projected adjusted book return on equity (ROE) ratio. This ratio is a non-GAAP financial measure. The numerator represents Net Income, adjusted for the impact of special items (as discussed above under Adjusted Diluted EPS). The denominator is average Total Common Stockholder's Equity, reduced for Goodwill. A reconciliation of the components of adjusted ROE to the most directly comparable GAAP measures is included here-in. Due to the forward-looking nature of this non-GAAP financial measure for future periods, information to reconcile it to the most directly comparable GAAP financial measure is not available at this time, as management is unable to project all special items, as discussed above under Adjusted Diluted EPS Guidance.

Funds From Operations ("FFO") Ratios

The materials for Duke Energy's Fourth Quarter Earnings Review and Business Update on February 14, 2019 include a reference to historical and expected FFO to Total Debt ratios. These ratios reflect non-GAAP financial measures. The numerator of the FFO to Total Debt ratio is calculated principally by using net cash provided by operating activities on a GAAP basis, adjusted for changes in working capital, ARO spend, depreciation and amortization of operating leases and reduced for capitalized interest (including any AFUDC interest). The denominator for the FFO to Total Debt ratio is calculated principally by using the balance of long-term debt (excluding purchase accounting adjustments and long-term debt associated with the CR3 Securitization), including current maturities, imputed operating lease liabilities, plus notes payable and commercial paper outstanding. The calculation of FFO to Total Debt ratio for historical periods is included here-in. Due to the forward-looking nature of this non-GAAP financial measure for future periods, information to reconcile it to the most directly comparable GAAP financial measure is not available at this time, as management is unable to project all special items, as discussed above under Adjusted Diluted EPS Guidance.

Holdco Debt Percentage

The materials for Duke Energy's Fourth Quarter Earnings Review and Business Update on February 14, 2019 include a reference to a historical and projected Holdco debt percentage. This percentage reflects a non-GAAP financial measure. The numerator of the Holdco debt percentage is the balance of Duke Energy Corporate debt, Progress Energy, Inc. debt, PremierNotes and the Commercial Paper attributed to the Holding Company. The denominator for the percentage is the balance of long-term debt (excluding purchase accounting adjustments and long-term debt associated with the CR3 Securitization), including current maturities, imputed operating lease liabilities, plus notes payable and commercial paper outstanding.

Available Liquidity

The materials for Duke Energy's Fourth Quarter Earnings Review and Business Update on February 14, 2019 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 equivalents, excluding amounts unavailable for operations, and remaining availability under the master credit and other facilities. The most directly comparable GAAP financial measure for available liquidity is Cash and cash equivalents. A reconciliation of available liquidity as of December 31, 2018 to the most directly comparable GAAP measure is included herein.

Business Mix Percentage

The materials for Duke Energy's Fourth Quarter Earnings Review and Business Update on February 14, 2019 reference each segment's 2019 projected adjusted segment income as a percentage of the total projected 2019 adjusted net income (i.e. business mix), excluding the impact of Other. Duke Energy's segments are comprised of Electric Utilities and Infrastructure, Gas Utilities and Infrastructure and Commercial Renewables.

Adjusted segment income is a non-GAAP financial measure, as it represents reported segment income adjusted for special items as discussed above. Due to the forward-looking nature of any forecasted adjusted segment income, information to reconcile this non-GAAP financial measure to the most directly comparable GAAP financial measure is not available at this time, as management is unable to project all special items (as discussed above under Adjusted Diluted EPS Guidance).

Non-Rider Recoverable O&M

The materials for Duke Energy's Fourth Quarter Earnings Review and Business Update on February 14, 2019 include a discussion of Duke Energy's non-rider recoverable operating, maintenance and other expenses (O&M) for the year-to-date periods ended December 31, 2018, 2017, 2016 and 2015 as well as the forecasted year-to-date period ended December 31, 2019. Non-rider recoverable O&M expenses are non-GAAP financial measures, as they represent reported O&M expenses adjusted for special items and expenses recovered through riders. Management believes that the presentation of non-rider recoverable O&M expenses provides useful information to investors, as it provides a meaningful comparison of financial performance across periods. The most directly comparable GAAP financial measure for non-rider recoverable O&M expenses is reported operating, maintenance and other expenses. A reconciliation of nonrecoverable O&M expenses for the year-to-date periods ended December 31, 2018, 2017, 2016, and 2015, as well as the forecasted year-to-date period ended December 31, 2019, to the most directly comparable GAAP measure are included here-in. Due to the forward-looking nature of this non-GAAP financial measure for future periods, information to reconcile it to the most directly comparable GAAP financial measure is not available at this time, as management is unable to project all special items, as discussed above under Adjusted Diluted EPS Guidance.

DUKE ENERGY CORPORATION

REPORTED TO ADJUSTED EARNINGS RECONCILIATION

Twelve Months Ended December 31, 2018 (Dollars in millions, except per-share amounts)

Special Items

Reported EarningsCosts to Achieve Piedmont MergerRegulatory and Legislative ImpactsSale of Retired PlantImpairment ChargesImpacts of the Tax Act

SeveranceDiscontinued OperationsTotal AdjustmentsAdjusted Earnings

SEGMENT INCOME

Electric Utilities and Infrastructure Gas Utilities and Infrastructure Commercial Renewables

Other (694)

Discontinued Operations 19

EPS ATTRIBUTABLE TO DUKE ENERGY CORP, DILUTED

Total Reportable Segment Income 3,341

3,058$	-$	202 B$	-$	46 D$	24$	-$	-$	272$	3,330
274	-	-	-	42 E	1	-	-	43	317
9	-	-	-	91 F	(3)	-	-	88	97
202	-	179	22	-	-	403	3,744
-	82 C	-	(2)	144 H	-	289	(405)
-	-	-	-	-	(19) I	(19)	-
202$	82$	179$	144$	(19)$	673$	3,339
4.72

$

- 65 A -

Net Income Attributable to Duke Energy Corporation

$ $

2,666$

65$

20 G

$

3.76

$

0.09

$

0.29

$

0.12

$

0.25

$

0.03

$

0.21

$

(0.03)

$

0.96

$

• A - Net of $19 million tax benefit. $84 million recorded within Operating Expenses on the Consolidated Statements of Operations.

• B - Net of $16 million tax benefit at Duke Energy Progress and $47 million tax benefit at Duke Energy Carolinas.

  • • On the Duke Energy Progress Consolidated Statement of Operations, $32 million is recorded within Impairment charges, $31 million within Operations, maintenance and other, $6 million within

  Interest Expense and $(1) million within Depreciation and amortization.

  • • On the Duke Energy Carolinas Consolidated Statement of Operations, $188 million is recorded within Impairment charges, $8 million within Operations, maintenance and other, and $1 million within Depreciation and amortization.

• C - Net of $25 million tax benefit. $107 million recorded within Gains (Losses) on Sales of Other Assets and Other, net on the Consolidated Statement of Operations.

• D - Net of $14 million tax benefit. $60 million recorded within Impairment charges on the Consolidated Statements of Operations

• E - Net of $13 million tax benefit. $55 million included within Other Income and Expenses on the Consolidated Statement of Operations.

• F - Net of $2 million Noncontrolling Interests. $93 million goodwill impairment recorded within Impairment charges on the Consolidated Statements of Operations.

• G - $20 million true up of prior year Tax Act estimates recorded within Income Tax Expense from Continuing Operations on the Consolidated Statements of Operations.

• H - Net of $43 million tax benefit. $187 million recorded with Operations, maintenance and other on the Consolidated Statements of Operations.

• I - Recorded in Income (Loss) from Discontinued Operations, net of tax on the Consolidated Statements of Operations.

Weighted Average Shares, Diluted (reported and adjusted) - 708 million