23. Subsequent Events
In January 2004, Duke Energy, through its wholly owned subsidiary Duke Energy Royal, LLC, agreed to sell its interest in six energy service agreements and Duke Energy Huntington Beach, LLC. In February 2004, DEFS entered into a purchase and sale agreement to sell certain gas gathering and processing plant assets in West Texas. Also in February 2004, DEM sold its 15-percent ownership interest in Caribbean Nitrogen Company. Additionally, during the first quarter of 2004, DENA sold turbines and surplus equipment. In total, all of these transactions will result in cash proceeds of approximately $265 million and a net gain of approximately $10 million.
In February 2004, DETM sold certain physical power contracts in which it held a liability position. As part of the sale, DETM paid a third party an immaterial amount, which approximated the carrying value of the contracts at December 31, 2003.
On March 1, 2004, Duke Capital Corporation, a Delaware corporation which is a wholly owned subsidiary of Duke Energy, announced that it had changed its form of organization from a corporation to a Delaware limited liability company. The change in form of organization was effected by conversion pursuant to Section 266 of the General Corporation Law of the State of Delaware and Section 18-214 of the Delaware Limited Liability Company Act. Pursuant to the conversion, all rights and liabilities of Duke Capital Corporation vested in Duke Capital LLC, a Delaware limited liability company. This conversion will not have any effect on the Duke Energy consolidated results of operations or financial position.
On March 10, 2004 DEFS entered into an agreement to acquire gathering, processing and transmission assets in Southeast New Mexico from ConocoPhillips for approximately $75 million. Pending approval from the government authorities, the transaction is scheduled to close in second quarter 2004.
In February 2003, Duke Energy received a Western District of North Carolina Grand Jury subpoena for documents related to the audit by the NCUC and the PSCSC of Duke Power regarding certain Duke Power regulatory accounting entries from 1998 to 2000. On March 10, 2004, Duke Energy received notice from the U.S. Attorney for the Western District of North Carolina that its investigation had been closed and that no action against Duke Energy or any individuals was warranted. For additional information on subsequent events related to litigation and contingencies refer to Note 17—Litigation.
On March 14, 2004, Duke Energy entered into a share sale agreement with Alinta Ltd. to purchase Duke Energy’s assets in Australia and New Zealand for approximately US$1.2 billion. The sale will result in a gain for Duke Energy and is expected to close in second quarter 2004.
For information on subsequent events related to debt and other financing matters refer to Note 14. For information on subsequent events related to Regulatory Matters refer to Note 4.