News Release
April 20, 2000

DUKE ENERGY EARNINGS UP 28 PERCENT; SURPASS EXPECTATIONS

Highlights

 

CHARLOTTE, N.C. -- Duke Energy (NYSE: DUK) today reported earnings of $388 million, or $1.06 per share, for first quarter, up 28 percent from $302 million, or $0.83 per share, excluding an extraordinary gain, for first quarter 1999.

Revenues for the quarter increased 73 percent over the prior-year quarter to $7.2 billion, due to strong performance in key business segments, including North American Wholesale Energy, International Energy, Field Services, Natural Gas Transmission and Franchised Electric. Earnings before interest and taxes (EBIT) for the quarter were $859 million, a 26 percent increase over EBIT of $683 million in first quarter last year.

Richard B. Priory, Duke Energy's chairman, president and chief executive officer, noted that first quarter earnings exceeded projections.

"Our first quarter results are proof positive that our integrated strategy is on track to deliver exceptional value to customers and shareholders," Priory said. "We are combining our expertise in operations, asset management and market knowledge to deliver high-impact energy services to our customers."

The $0.83 earnings per share for first quarter 1999 excludes a $660 million extraordinary gain, or $1.82 per share, on the sale of Midwest Pipelines in March 1999.

For the quarter, Duke Energy’s Energy Services group, which include the fast-growing North American Wholesale Energy and International Energy segments, had EBIT of $187 million, a 380 percent increase over the $39 million earned in the same period in 1999.

Operating results for the company’s North American Wholesale Energy segment – Duke Energy North America – include $63 million from the sale of the company’s remaining interest in the Hidalgo Energy Facility, reflecting an aggressive portfolio management strategy designed to capture market premiums.

The increase for the International Energy segment – Duke Energy International – is attributable to new earnings from acquisitions in Latin America and Australia and $54 million from the sale of two liquefied natural gas vessels.

"Earnings from our Energy Services businesses are on track to achieve 40 percent to 50 percent growth this year," Priory said.

The company’s additional Energy Services segments – Trading and Marketing and Other Energy Services – reported strong earnings as well.

The Trading and Marketing segment, comprised of Duke Energy Merchants, contributed first quarter EBIT of $22 million, a 22 percent increase over the $18 million earned in first quarter last year. The increase is largely due to additional earnings from new acquisitions and new businesses, and decreased operating costs.

The Other Energy Services segment, which is comprised of Duke Solutions, Duke Engineering & Services and Duke/Fluor Daniel, reported first quarter EBIT of $7 million, a $12 million increase over first quarter 1999. The positive results are due to earnings from new projects and decreased operating expenses.Field Services, which includes natural gas gathering and processing, accounted for EBIT of $69 million, a 475 percent increase over the $12 million earned in first quarter last year. The growth was due to higher natural gas liquids (NGL) prices, volume increases and operating profits stemming from the acquisition of UPFuels on March 31, 1999.

The Natural Gas Transmission segment reported strong first quarter results with EBIT totaling $152 million, a 10 percent increase over the $138 million earned in first quarter 1999, excluding $70 million attributable to the Midwest Pipelines, which were sold in first quarter 1999. The increase was driven by market expansion projects and acquisitions.

The company's Franchised Electric segment, Duke Power, also realized EBIT growth during the quarter. Earnings of $441 million were 8 percent above the $407 million reported in the same quarter last year, due to residential and commercial customer growth.

"Our Franchised Electric and Natural Gas Transmission segments provide Duke Energy solid, diverse platforms from which we will continue to grow," Priory said.

The positive first quarter results illustrate the strength of Duke Energy’s integrated network of energy businesses, as well as its skilled management of assets to capture maximum value for shareholders. "Our strong first quarter earnings are due in part to the agile management of our portfolio of energy assets, as we continue to aggressively acquire and divest to take advantage of market cycles and maximize the effectiveness of our capital," Priory said.

The Duke Ventures segment, which includes Crescent Resources, DukeNet Communications and Duke Capital Partners, reported first quarter EBIT of $17 million, a 31 percent increase over the $13 million earned in first quarter 1999. The increase is primarily due to decreased operating losses of DukeNet Communications.

Additional first quarter performance information for the company’s reporting segments as well as key earnings drivers can be found on Duke Energy’s web site at www.duke-energy.com.

Duke Energy, a diversified multi-national energy company, creates value for customers and shareholders through an integrated network of energy assets and expertise. Duke Energy manages a dynamic portfolio of natural gas and electric supply, delivery and trading businesses -- generating revenues of nearly $22 billion in 1999. Duke Energy, headquartered in Charlotte, N.C., is a Fortune 100 company traded on the New York Stock Exchange under the symbol DUK. More information about the company is available on the Internet at: www.duke-energy.com.

This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although Duke Energy believes that its expectations are based on reasonable assumptions, it can give no assurance that its goals will be achieved. Important factors that could cause actual results to differ materially from those in the commodity prices for oil, gas, coal electricity and interest rates, the extent of success in connecting natural gas supplies to gathering and processing systems and in connecting and expanding gas and electric markets, the performance of electric generation, pipeline and gas processing facilities, the timing and success of efforts to develop domestic and international power, pipeline, gathering, processing and other infrastructure projects and conditions of the capital markets and equity markets during the periods covered by the forward-looking statements.

###

March 2000
QUARTERLY HIGHLIGHTS
(unaudited)

Three Months Ended

March 31,


(In millions, except where noted)

2000

1999


COMMON STOCK DATA

Earnings Per Share (before extraordinary item)

Basic

$1.06

$0.83

Dilutive

1.06

0.83

Earnings Per Share

Basic

1.06

2.65

Dilutive

1.06

2.64

Dividends Per Share

0.55

0.55

Actual Shares Outstanding

367

364

Weighted Average Shares Outstanding

Basic

367

363

Dilutive

367

364


INCOME

Operating Revenues

$7,236

$4,178

Earnings Before Interest and Taxes (EBIT)

859

683

Interest Expense

185

132

Minority Interests (a)

31

35

Income Taxes

250

209

Extraordinary Gain

-

660

Net Income

393

967

Preferred Stock Dividends and Redemption Premiums

5

5

Earnings Available for Common Stockholders

$388

$962


CAPITALIZATION

Common Equity

41%

51%

Minority Interest

5%

1%

Preferred Stock

1%

2%

Trust Preferred Securities

6%

5%

Total Debt

47%

41%


SEC Fixed Charges Coverage

4.2

4.6

Total Debt

$10,787

$7,230

Book Value Per Share

25.18

24.07


CAPITAL AND INVESTMENT EXPENDITURES

Franchised Electric

$177

$125

Natural Gas Transmission

428

42

Field Services

128

1,445

Trading and Marketing

97

5

North American Wholesale Energy

238

86

International Energy

447

296

Other Energy Services

11

8

Duke Ventures

64

64


EBIT BY BUSINESS SEGMENT

Franchised Electric

$441

$407

Natural Gas Transmission

152

208

Field Services

69

12

Trading and Marketing

22

18

North American Wholesale Energy

56

27

International Energy

102

(1)

Other Energy Services

7

(5)

Duke Ventures

17

13

Other Operations

(13)

(17)



Total Segment EBIT

853

662

EBIT attributable to Minority Interests

6

21



Total EBIT

$859

$683


(a) Includes expense related to the Trust Preferred Securities of $27 million and $18 million for the three months ended March 31, 2000 and 1999, respectively.

 

March 2000
QUARTERLY HIGHLIGHTS
(unaudited)

Three Months Ended


March 31,

(In millions, except where noted)

2000

1999


FRANCHISED ELECTRIC

Operating Revenues

$1,115

$1,061

Operating Expenses

693

675

Other Income (Expenses)

19

21



EBIT

$441

$407



Sales, GWh

20,554

19,537


NATURAL GAS TRANSMISSION

Operating Revenues

$286

$402

Operating Expenses

146

202

Other Income (Expenses)

12

8



EBIT

$152

$208



Throughput, TBtu

505

811


FIELD SERVICES

Operating Revenues

$1,466

$344

Operating Expenses

1,393

332

Other Income (Expenses)

(4)

-



EBIT

$69

$12



Natural Gas Gathered and Processed/Transported, TBtu/day

6.0

3.4

Natural Gas Liquids Production, MBbl/d

231.2

107.6

Natural Gas Marketed, TBtu/day

0.5

0.4

Average Natural Gas Price per MMBtu

$2.52

$1.75

Average Natural Gas Liquids Price per Gallon

$0.50

$0.23


TRADING AND MARKETING

Operating Revenues

$4,431

$2,286

Operating Expenses

4,414

2,257

Other Income (Expenses)

2

4

Minority Interest Expense (Benefit)

(3)

15



EBIT

$22

$18



Natural Gas Marketed, TBtu/day

12.0

11.0

Electricity Marketed, GWh

50,353

21,837


NORTH AMERICAN WHOLESALE ENERGY

Operating Revenues

$142

$81

Operating Expenses

84

53

Other Income (Expenses)

2

3

Minority Interest Expense

4

4



EBIT

$56

$27



Proportional MW Capacity Owned a

6,889

5,012

Estimated Proportional Investment in Project Net Assets a

$1,606

(b)

$1,502

(b)


INTERNATIONAL ENERGY

Operating Revenues

$154

$45

Operating Expenses

115

48

Other Income (Expenses)

68

4

Minority Interest Expense

5

2



EBIT

$102

$(1)



Proportional MW Capacity Owned a

4,205

906

Proportional Maximum Pipeline Capacity, MMcf/d a

332

332

Estimated Proportional Investment in Project Net Assets a

$2,882

(c)

$588

(c)


OTHER ENERGY SERVICES

Operating Revenues

$275

$154

Other Income (Expenses)

268

159



EBIT

$7

$(5)




DUKE VENTURES

Operating Revenues

$34

$26

Operating Expenses

17

13



EBIT

$17

$13



(a) Includes under construction or under contract.

(b) Includes total proportional estimated costs to complete projects under construction or under contract of $542 million and $490 million as of March 31, 2000 and 1999, respectively.

(c) Includes total proportional estimated costs to complete projects under construction or under contract of $90 million and $259 million as of March 31, 2000 and 1999, respectively.

Contact: Danny Gibbs
Phone: 704/373-6680
24 Hour Phone: 704/382-8333
Email: dpgibbs@duke-energy.com