News Release
Jul. 23, 1997

DUKE ENERGY REPORTS EARNINGS OF 43 CENTS PER SHARE

CHARLOTTE, N.C. -- Duke Energy Corporation today reported second quarter 1997 earnings of 43 cents per share of common stock, down from the 62 cents per share pro forma results of Duke Power Co. and PanEnergy Corp for the same period in 1996.

Duke Power and PanEnergy merged to form Duke Energy on June 18, 1997. For the quarter, Duke Energy earned $157.6 million for common stock, versus $226.1 million in the second quarter of 1996.

Earnings were adversely affected by two factors -- mild weather that decreased sales in Duke’s electric operations and costs associated with the Duke/PanEnergy merger.

"Overall electric sales dropped 3.5 percent for the quarter," said Richard J. Osborne, Duke Energy’s executive vice president and chief financial officer. "That, plus $70.4 million in onetime merger-related costs, accounted for the difference between the two years’ quarters."

The merger-related costs include advisory fees and the planned work force reduction of about 350 jobs at Duke Energy. The reductions, taking place until Nov. 15, will eliminate overlapping corporate jobs at the merged company.

At Duke’s electric operations, residential sales saw the biggest decrease for the quarter -- falling 12.4 percent due to mild weather. General service or commercial sales also dropped, falling 2.6 percent.

Overall industrial sales, not as weather sensitive, rose 2.3 percent, with textile sales rising 2.2 percent.

"Obviously, the weather is beyond our control, but the uptick in industrial sales is good news for Duke Energy," said Osborne. "It shows that the economic health of the Carolinas is still strong."

Earnings before interest and tax in Duke’s natural gas transmission operations rose 1.5 percent for the quarter, with volumes rising 2.1 percent. Expansion at Duke’s northeast pipelines accounted for the increase.

Earnings before interest and tax in Duke’s energy services operations rose 11 percent for the quarter, helped by increased earnings at Duke Energy Field Services and Duke’s Global Asset Development.

Pro forma earnings for the six months ending June 30, 1997, were $1.27 per share, down 13 cents from $1.40 for the previous year. Lower electric sales and merger-related costs again accounted for the decline.

Duke Energy Corporation (NYSE:DUK) is a global energy company with more than $20 billion in assets. Duke Energy companies provide electric service to approximately 2 million customers; operate pipelines that deliver 12 percent of the natural gas consumed in the United States; and are leading marketers of electricity, natural gas and natural gas liquids. Globally the companies develop, own and operate energy facilities and provide engineering, management, operating and environmental services. Contact Duke Energy on the World Wide Web at http://www.duke-energy.com.

Contact: Randy Wheeless
Phone: 704-382-8379
24 Hour Phone: 704-594-0681
Email: crwheele@duke-energy.com