Duke Energy completes sale of its non-regulated Midwest generation business to Dynegy

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CHARLOTTE, N.C. - Duke Energy today announced the completion of the sale of its non-regulated Midwest Commercial Generation Business to Dynegy Inc. for $2.8 billion in cash.

The transaction includes ownership interests in 11 power plants and Duke Energy Retail Sales, the company'’s competitive retail business in Ohio.

"This transaction allows Duke Energy to sharpen our focus to better meet our customers’ needs, while creating additional long-term value for our investors," said Lynn Good, president, CEO and vice chairman of Duke Energy.

The cash proceeds from the transaction will be used to further strengthen the balance sheet while also quickly returning capital to shareholders.

Approximately $1.5 billion will be used to repurchase shares of the company'’s common stock through an accelerated share repurchase (ASR) program. The remainder will be used to pay down holding company debt and fund 2015 capital investments.

"Proceeds will be deployed in a disciplined manner, ensuring accretive returns for our shareholders and support for future growth initiatives," said Steve Young, executive vice president and CFO of Duke Energy.

The transaction is expected to be accretive to the company'’s adjusted diluted EPS within the first 12 months after closing.

Accelerated Share Repurchase Program

Within the next several business days, the company expects to initiate ASR agreements with financial institutions to repurchase an aggregate of $1.5 billion of Duke Energy’s common stock. Once the ASR agreements are finalized, the company will make total payments of $1.5 billion to the banks and will receive immediate delivery and retirement of the vast majority of shares that are expected to be repurchased under the ASR agreements. The total number of shares that Duke will repurchase under the ASR agreements will be based generally upon the volume-weighted average share price of Duke'’s common stock during the term of the transaction.

Non-regulated Midwest generation business overview

The non-regulated Midwest generation business sold to Dynegy includes 11 merchant power plants in Ohio, Illinois and Pennsylvania with a capacity of approximately 6,100 megawatts. The plants are dispatched into the PJM wholesale power market and equipped with significant environmental controls. The plants were fully owned or partially owned by Duke Energy Ohio and were reported in the company'’s Commercial Power business unit.

"“We are proud of the employees who have operated these plants for many years, and we appreciate the long and important role these operations have had for Duke Energy and our customers in the Midwest,"” said Marc Manly, president of Duke Energy'’s Commercial Portfolio.

The company began the process to exit its non-regulated Midwest Commercial Generation Business in February 2014. The Duke Energy Ohio and Kentucky and Duke Energy Indiana regulated utilities are not a part of the transaction.

Duke Energy’'s financial advisors were Citigroup and Morgan Stanley. Bracewell & Giuliani was the company'’s legal advisor.

Duke Energy

Duke Energy is the largest electric power holding company in the United States with approximately $121 billion in total assets as of Dec. 31, 2014. Its regulated utility operations serve approximately 7.3 million electric customers located in six states in the Southeast and Midwest. Its commercial power and international energy business segments own and operate diverse power generation assets in North America and Latin America, including a growing portfolio of renewable energy assets in the United States.

Headquartered in Charlotte, N.C., Duke Energy is a Fortune 250 company traded on the New York Stock Exchange under the symbol DUK. More information about the company is available at duke-energy.com.