News Release
July 18, 2000

 DUKE ENERGY’S SECOND QUARTER EARNINGS RISE 14 PERCENT

Highlights

CHARLOTTE, N.C. -- Duke Energy (NYSE: DUK) today reported earnings of $0.88 per share for the second quarter of 2000, a 14-percent increase over the $0.77 per share earned in the same period last year, due primarily to the success of its high-growth energy businesses.

Gas and electric businesses contributed to the overall strong performance, as wholesale and retail energy operations showed increased quarter-over-quarter earnings. Total revenues for the quarter increased 133 percent over last year to $10.9 billion. Earnings before interest and taxes (EBIT) totaled $837 million, a 47-percent increase over the $568 million earned in 1999.

Richard B. Priory, Duke Energy’s chairman, president and chief executive officer, said the second-quarter results keep the company on course toward achieving earnings at the high end of its target growth range for the year.

"The strong earnings performance this quarter confirms our commitment to deliver outstanding value to investors," Priory said. "A solid strategy, executed with excellence by all our business lines, has transformed Duke Energy into a leader in delivering operational and financial results."

In the second quarter, the company’s high-growth Energy Services businesses, which include the North American Wholesale Energy, International Energy and Other Energy Services business segments, posted EBIT of $199 million for the quarter, a 665-percent increase over the same period last year. Year-to-date EBIT totaled $386 million versus $65 million in 1999, a 494-percent increase.

The North American Wholesale Energy business segment reported second quarter EBIT of $106 million, a 293-percent gain over the same period last year. The increase is due primarily to the strength and volatility of natural gas and electricity prices, availability of merchant generation facilities and solid trading results by Duke Energy North America (DENA). DENA also brought an unprecedented four generation facilities online in June, adding 2,300 megawatts of new capacity in time to help meet summer demand for electricity in the Midwest, Northeast and Texas. Earnings also grew as a result of new business initiatives at Duke Energy Merchants.

The International Energy business segment, comprised of the Asia Pacific, Latin America and Europe regional subsidiaries of Duke Energy International (DEI), delivered EBIT of $84 million, or approximately 1,580 percent over the $5 million earned in the year-ago quarter, primarily due to the strong performance of DEI’s Latin American business and continued solid results from Asia Pacific.

The Other Energy Services business segment, comprised of Duke/Fluor Daniel, DukeSolutions and Duke Engineering & Services, reported second quarter EBIT of $9 million, a $15 million increase over the same quarter last year. The increase is due to new business and improved gross margins across all three businesses.

"Our Energy Services business group is the fastest growing earnings engine in our portfolio," Priory said. "And like an efficiently running engine, Energy Services is hitting on all cylinders, leveraging Duke Energy’s core commercial, development, construction, operation, risk management and trading skills to build integrated regional energy businesses around the world."

Field Services, the company’s natural gas gathering and processing business segment, reported second quarter EBIT of $68 million, an 89-percent increase over the $36 million earned last year. The increase is primarily attributable to the first-quarter combination of Duke Energy's gas gathering and processing business with Phillips Petroleum's Gas Processing and Marketing unit into a new company, named Duke Energy Field Services. Also contributing to the growth were strong commodity prices and the acquisition of gathering and processing assets in central Oklahoma from Conoco Inc. and Mitchell Energy & Development Corp. in the first quarter.

The Natural Gas Transmission segment reported second quarter EBIT of $121 million, a $3 million increase over the same period last year, excluding a $28 million benefit from the successful completion of Texas Eastern’s environmental clean-up program in the second quarter of 1999. Second-quarter earnings increased as a result of expansion projects, particularly the connection to electric generation projects, and from the completion of the East Tennessee Natural Gas Company acquisition during the first quarter.

The Franchised Electric business segment, comprised of Duke Power and Electric Transmission, reported second quarter EBIT of $365 million, a 14-percent increase over the $319 million earned last year, primarily due to growth in customers and warm weather. The increase was partially offset by storm-damage costs incurred in May.

The Duke Ventures business segment, comprised of Crescent Resources, DukeNet Communications and Duke Capital Partners, reported second-quarter EBIT of $13 million, an $11 million decrease from the $24 million earned in the same period last year. The decrease is the result of a decline in Crescent Resources’ land sales - primarily due to the 1999 sale of land in the Jocassee region to the state of North Carolina - and residential developed lot sales. The results were partially offset by earnings from DukeNet Communications, Duke Energy’s telecommunications business.

For the first two quarters, the company earned $1.94 per share, a 21-percent increase over the $1.60 per share before extraordinary items earned in the first half of 1999. Year-to-date revenue increased 105 percent over last year to $18.2 billion. Year-to-date EBIT totaled $1.7 billion, a 36-percent increase over the same period last year.

"Duke Energy’s integration strategy continues to show strong results," Priory said. "Our immersion in regional growth markets means we’re able to convert gas supply, storage, pipelines, power generation, risk management and trading capabilities into lower costs for customers and increased earnings for investors."

Duke Energy, a diversified multinational 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.

Duke Energy Earnings Conference Call: Richard J. Osborne, Duke Energy’s chief financial officer, will discuss second quarter earnings during a conference call scheduled for 2 p.m. EDT Wednesday. Media representatives are invited to listen to the conference by visiting Duke Energy’s web site at www.duke-energy.com or by dialing 800/967-7140 in the United States or 719/457-2629 outside the United States. The confirmation code is 852164. Please call in 5-10 minutes prior to the scheduled start time. A replay of the conference will be available through Tuesday, Aug. 1, on Duke Energy’s web site or by calling 888/203-1112 in the United States or 719/457-0820 outside the United States. The access code is 852164.

This document 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.

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June 2000
QUARTERLY HIGHLIGHTS
(unaudited)

Three Months Ended

Six Months Ended

June 30,

June 30,



(In millions, except where noted)

2000

1999

2000

1999


COMMON STOCK DATA

Earnings Per Share (before extraordinary item)

  Basic

$0.88

$0.77

$1.94

$1.60

  Dilutive

0.88

0.77

1.93

1.60

Earnings Per Share

  Basic

0.88

0.77

1.94

3.42

  Dilutive

0.88

0.77

1.93

3.41

Dividends Per Share

1.10

1.10

1.65

1.65

Actual Shares Outstanding

368

365

367

365

Weighted Average Shares Outstanding

  Basic

368

364

367

364

  Dilutive

369

365

368

365


INCOME

Operating Revenues

$10,926

$4,691

$18,216

$8,869

Earnings Before Interest and Taxes (EBIT)

837

568

1,696

1,251

Interest Expense

228

120

413

252

Minority Interests (a)

89

33

120

68

Income Taxes

191

127

441

336

Extraordinary Gain

-

-

-

660

Net Income

329

288

722

1,255

Preferred Stock Dividends and Redemption Premiums

5

5

10

10

Earnings Available for Common Stockholders

$324

$283

$712

$1,245


CAPITALIZATION

Common Equity

37%

50%

Minority Interest

5%

1%

Preferred Stock

1%

2%

Trust Preferred Securities

6%

7%

Total Debt

51%

40%

SEC Fixed Charges Coverage

3.5

4.3

Total Debt

$13,042

$7,083

Book Value Per Share

25.41

24.32


CAPITAL AND INVESTMENT EXPENDITURES

Franchised Electric

$114

$178

$291

$303

Natural Gas Transmission

39

65

467

107

Field Services

87

92

215

1,537

North American Wholesale Energy

491

262

826

353

International Energy

383

20

830

316

Other Energy Services

5

2

16

10

Duke Ventures

100

98

164

162


EBIT BY BUSINESS SEGMENT

Franchised Electric

$365

$319

$806

$726

Natural Gas Transmission

121

146

273

354

Field Services

68

36

137

48

North American Wholesale Energy (b)

106

27

184

72

International Energy

84

5

186

4

Other Energy Services

9

(6)

16

(11)

Duke Ventures

13

24

30

37

Other Operations

(6)

1

(19)

(16)





Total Segment EBIT

760

552

1,613

1,214

EBIT attributable to Minority Interests

77

16

83

37





Total EBIT

$837

$568

$1,696

$1,251






(a) Includes expense related to the Trust Preferred Securities of $27 million and $18 million for the three months ended and $54 million and $36 million for the six months ended June 30, 2000 and 1999, respectively.

(b) Includes the segment that was previously known as Trading and Marketing.

June 2000
QUARTERLY HIGHLIGHTS
(unaudited)

Three Months Ended

Six Months Ended

June 30,

June 30,



(In millions, except where noted)

2000

1999

2000

1999


FRANCHISED ELECTRIC

Operating Revenues

$1,158

$1,095

$2,273

$2,156

Operating Expenses

813

796

1,506

1,471

Other Income (Expenses)

20

20

39

41





EBIT

$365

$319

$806

$726





Sales, GWh

20,661

19,787

41,215

39,323


NATURAL GAS TRANSMISSION

Operating Revenues

$281

$260

$567

$662

Operating Expenses

162

116

308

318

Other Income (Expenses)

2

2

14

10





EBIT

$121

$146

$273

$354





Throughput, TBtu

372

340

877

1,151


FIELD SERVICES

Operating Revenues

$2,155

$782

$3,621

$1,126

Operating Expenses

2,044

747

3,437

1,079

Other Income (Expenses)

-

1

(4)

1

Minority Interest Expense

43

-

43

-





EBIT

$68

$36

$137

$48





Natural Gas Gathered and Processed/Transported, TBtu/day

8.0

5.3

7.0

4.4

Natural Gas Liquids Production, MBbl/d

401.5

214.0

316.3

161.1

Natural Gas Marketed, TBtu/day

0.5

0.5

0.5

0.4

Average Natural Gas Price per MMBtu

$3.47

$2.14

$2.99

$1.95

Average Natural Gas Liquids Price per Gallon

$0.47

$0.30

$0.49

$0.27


NORTH AMERICAN WHOLESALE ENERGY

Operating Revenues

$7,062

$2,605

$11,635

$4,972

Operating Expenses

6,920

2,575

11,418

4,885

Other Income (Expenses)

(8)

11

(4)

18

Minority Interest Expense

28

14

29

33





EBIT

$106

$27

$184

$72





Natural Gas Marketed, TBtu/day

11.2

10.0

11.6

10.5

Electricity Marketed, GWh

58,198

22,179

108,551

44,016

Proportional MW Capacity Owneda

NA

NA

8,473

6,225

Estimated Proportional Investment in Project Net Assetsa

NA

NA

$2,618

(b)

$1,951

(b)


INTERNATIONAL ENERGY

Operating Revenues

$249

$55

$457

$100

Operating Expenses

173

51

288

99

Other Income (Expenses)

14

3

28

7

Minority Interest Expense

6

2

11

4





EBIT

$84

$5

$186

$4





Proportional MW Capacity Owned a

NA

NA

4,370

906

Proportional Maximum Pipeline Capacity, MMcf/d a

NA

NA

321

321

Estimated Proportional Investment in Project Net Assets a

NA

NA

$2,963

(c)

$608

(c)


OTHER ENERGY SERVICES

Operating Revenues

$138

$159

$413

$313

Other Income (Expenses)

129

165

397

324





EBIT

$9

$(6)

$16

$(11)






DUKE VENTURES

Operating Revenues

$33

$37

$67

$63

Operating Expenses

20

13

37

26





EBIT

$13

$24

$30

$37





(a) Includes under construction or under contract.

(b) Includes total proportional estimated costs to complete projects under construction or under contract of $546 million and $666 million as of June 30, 2000 and 1999, respectively.

(c) Includes total proportional estimated costs to complete projects under construction or under contract of $303 million and $254 million as of June 30, 2000 and 1999, respectively.

Contact: Paul Mason
Phone: 704/373-4512
24 Hour Phone: 704/382-8333
Email: pemason@duke-energy.com