News Release
Oct. 21, 1997

DUKE ENERGY REPORTS EARNINGS OF 83 CENTS PER SHARE

CHARLOTTE, N.C. -- Duke Energy Corporation today reported third quarter 1997 earnings of 83 cents per share of common stock, down from the 94 cents per share pro forma results of Duke Power Co. and PanEnergy Corp for the same period in 1996.

Duke Power and Houston-based PanEnergy merged earlier this year to form Duke Energy.

For the quarter, Duke Energy earned $298.4 million for common stock, versus $340.2 million in the third quarter of 1996. Overall, the company’s earnings before interest and tax was $632.2 million, compared to $697.5 million for the same quarter last year.

Earnings were reduced by various factors -- charges associated with a work force reduction at the company’s electric operations, lower earnings in the company’s energy services area and non-recurring gains in 1996.

"Despite the decline in earnings, it’s good to get these restructuring and efficiency improvement costs behind us," said Richard Priory, chairman and chief executive officer of Duke Energy. "This was the first full quarter as a merged energy company. Several new projects were announced this quarter which will begin to position us for strong future growth."

During the quarter, Duke announced a work force reduction of more than 500 employees in the company’s electric operations area. The company took a $46.8 million charge for the reduction.

For the quarter, overall Duke electric sales were up 3.9 percent due to warmer summer weather and increased business activity. Residential sales increased 3.2 percent while general service or commercial sales rose 4.3 percent.

Overall industrial sales moved up 1.8 percent. Textile sales, a major component of industrial sales, rose 2.8 percent while other industrial sales increased 1.2 percent.

"The weather was a main driver in the increased sales, and the increase in Duke’s industrial and commercial sales signals the continuation of a strong economy in the Piedmont Carolinas," said Priory.

Earnings before interest and tax at Duke’s natural gas transmission operations decreased to $134.6 million this quarter, versus $148.8 for last year’s quarter.

Natural gas transmission earnings were affected by the favorable resolution of certain regulatory matters in 1996. No such favorable actions occurred in this year’s quarter.

During the quarter, Duke’s Trunkline Gas Company received Federal Energy Regulatory Commission approval to expand its Terrebonne natural gas pipeline system located in offshore Louisiana. The $52 million project will give Trunkline additional, efficient and cost-effective pipeline capacity for moving natural gas from newly developed offshore production areas to multiple onshore markets.

Earnings before interest and tax in Duke’s energy services operations dropped to $37.5 million, versus $51.0 million in last year’s quarter.

A significant portion of the earnings decline was in Duke’s energy trading and marketing activity where unusual market conditions with respect to natural gas prices resulted in reduced margins.

During the quarter, Duke’s energy services announced various projects throughout the nation. Duke Energy Power Services announced a natural gas cogeneration plant near Mobile Bay, Ala. The facility will provide electric power and thermal energy to the first major natural gas liquids processing plant in southern Alabama.

Also, Duke Energy Trading and Marketing (DETM) announced a three-year deal with Providence Gas Co. of Rhode Island --delivering the local gas distribution company’s full gas requirements at a fixed price. DETM began providing complete fuel supply and asset management services to Providence Gas on Oct. 1.

"Overall, this quarter has been noteworthy for the announcement of several Duke Energy projects around the nation," said Priory. "These projects are significant milestones in our strategy to build a leading energy services company."

Pro forma earnings for the nine months ending Sept. 30, 1997, were $2.10 per share, down from $2.34 for the previous year. Various one-time charges associated with the merger, work force reductions and warmer winter and spring weather led to the decrease.

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