News Release Jan. 18, 2001

DUKE ENERGY EXCEEDS EXPECTATIONS WITH 17-PERCENT INCREASE
IN ONGOING YEAR-END EARNINGS PER SHARE

CHARLOTTE, N.C. – Marking a year of sustained and significant growth in its domestic and international competitive energy businesses, Duke Energy announced record ongoing earnings per share of $4.20 in 2000, a 17-percent increase over $3.60 per share in 1999.

The earnings exclude one-time charges and gains in 2000 including the sale of two liquefied natural gas vessels, the sale of the company’s interest in a wireless telecommunications company and a fourth-quarter charge taken as a provision against receivable balances related to energy sales in California.

Reported earnings per share were $4.78 in 2000, versus $4.08 per share in 1999. Adjusted for the two-for-one stock split effective Jan. 26, 2001, earnings per share for the year will be $2.39, compared to $2.04 for 1999.

Revenues for 2000 grew 127 percent to $49.3 billion, and earnings before interest and taxes (EBIT) increased 29 percent to $3.7 billion during the year, excluding the previously mentioned one-time items.

Duke Energy Chairman, President and Chief Executive Officer Richard B. Priory said the company’s strong results in 2000 demonstrate its successful transition to a leading, multinational energy company.

"The increase in revenue and earnings demonstrates that our long-term growth strategy is on track," Priory said. "In 2000, we invested in regional growth opportunities both domestically and internationally, bolstering our presence in key energy markets and our position as a leading wholesale energy producer and trader."

The company showed positive results across its business segments, with particularly strong gains in its competitive energy businesses. The company’s competitive energy businesses report earnings under the North American Wholesale Energy, International Energy, Other Energy Services, Field Services, Duke Ventures and Natural Gas Transmission business segments. These segments accounted for 90 percent of the company’s revenue and 53 percent of EBIT for the year.

The company’s Energy Services businesses, which include the North American Wholesale Energy, International Energy and Other Energy Services segments, delivered combined EBIT of $744 million for the year, a 374-percent increase over 1999. These results were driven by the aggressive expansion and management of the merchant plant portfolio as well as gains in the marketing and trading of power, natural gas and other commodities. These ongoing 2000 EBIT results do not include the profit on the sale of LNG vessels in the first quarter or the $110 million provision North American Wholesale Energy took in the fourth quarter against receivable balances related to energy sales in California.

At the end of 2000, the company had approximately $400 million of receivables related to energy sales in California.

The Field Services business segment, which represents Duke Energy’s majority interest in Duke Energy Field Services (DEFS), reported EBIT of $296 million in 2000, a 106-percent increase in EBIT for the year. The increase is primarily due to the positive impact of the combination of Duke Energy’s gas gathering and processing business with Phillips Petroleum’s GPM Gas Corporation unit earlier in the year. In addition, a full year of earnings stemming from the company’s UPFuels acquisition and increased natural gas liquids (NGL) prices contributed to the increase in EBIT.

The Natural Gas Transmission segment reported EBIT of $534 million for the year, compared with $495 million in 1999, an 8-percent increase. The 1999 results exclude the gain on the sale of Duke Energy’s interest in the Alliance Pipeline Project, benefits relating to environmental cleanup programs and earnings attributable to the Midwest pipelines that were sold in 1999. Those items reported in 1999 total $132 million. The strong gains in 2000 EBIT are the result of successful acquisitions and market-expansion projects, including the connection to five new power plants during the year.

The Franchised Electric business segment, comprised of Duke Power and Electric Transmission, reported a 3-percent increase in EBIT for the year due primarily to strong economic growth resulting in increased demand for power as well as more favorable weather conditions. The segment saw a 2.5-percent increase in the total average number of customers. For the year, EBIT totaled $1,704 million versus $1,656 million in 1999, excluding the previously mentioned charge for contingency reserves related to power plant construction activity.

The Duke Ventures business segment, comprised of Crescent Resources, DukeNet Communications and Duke Capital Partners, reported EBIT of $156 million for the year, excluding the gain on the sale of DukeNet’s interest in the BellSouth PCS business, down slightly from EBIT of $162 million in 1999.

For the fourth quarter, Duke Energy showed ongoing earnings of $0.94 per share, a 16-percent increase over $0.81 per share in 1999 excluding the charge taken as a provision against receivable balances related to energy sales in California and the charge for contingency reserves taken by the Franchised Electric business segment, or $0.47 versus $0.40 on a split-adjusted basis. Net income totaled $352 million for the quarter. EBIT increased 28 percent to $872 million. The North American Wholesale Energy, International Energy, Field Services and Franchised Electric segments led gains in the quarter.

North American Wholesale Energy
For the year, the North American Wholesale Energy segment, comprised of Duke Energy North America (DENA) and Duke Energy Merchants (DEM), reported EBIT of $528 million, a 153-percent increase over 1999. For fourth quarter 2000, the segment reported EBIT of $113 million, a 113-percent increase over fourth quarter 1999. These results exclude the $110 million provision related to receivables for energy sales to the California PX, the California ISO, SoCal Edison and PG&E. This provision represents Duke Energy’s estimate of its potential exposure to non-payment by these entities.

DENA, Duke Energy’s domestic merchant energy company, delivered strong fourth quarter earnings growth due to the efficient operation of its merchant generation fleet and gains in its commodity trading activities. DENA’s merchant generation portfolio includes approximately 6,500 megawatts in operation, 4,300 megawatts under construction and 12,500 megawatts in advanced development.

Consistent with its active portfolio management strategy, DENA announced the divestiture of a 23-percent interest in the McClain Electric Generating Station and an agreement to acquire additional interest in American Ref-Fuel, the largest waste-to-energy company in the northeast United States.

Duke Energy Merchants, which provides energy management and financial management services to producers, transporters and large users of energy, achieved increased EBIT for the quarter. DEM’s efforts to build new business lines gathered additional momentum with strong marketing margins in the refined products business line and trading gains in the coal and fertilizer businesses. DEM also realized gains from the appreciation of its investment in Canadian 88 Energy Corp.

International Energy
For 2000, the International Energy segment, comprised of the Asia Pacific, Latin America and European regional businesses of Duke Energy International (DEI), reported EBIT excluding the sale of two liquefied natural gas vessels of $277 million, a 560-percent increase over 1999. For fourth quarter, the segment delivered a 256-percent increase in quarter-on-quarter earnings with EBIT of $64 million.

DEI’s success for the quarter and the year was the result of strong performance from its portfolio of diversified assets worldwide with particularly strong performance continuing in Latin America. DEI’s presence continued to grow in its targeted regions. During the quarter, DEI completed the $75-million, 100-megawatt expansion of its Acajutla power generating facility in El Salvador, which brings the output of the plant to 300 megawatts. Additionally, DEI announced it had identified the customer base to support the $220 million Tasmanian Gas Pipeline in its Asia Pacific region. The pipeline will deliver natural gas to the energy markets of the Australian State of Tasmania for the first time. Construction is slated to begin in mid-2001.

Other Energy Services
For the year, the Other Energy Services business segment, comprised of DukeSolutions, Duke Engineering & Services and Duke/Fluor Daniel, reported an EBIT loss of $61 million, versus a loss of $94 million in 1999. In the fourth quarter, the segment reported an EBIT loss of $8 million versus a loss of $36 million in 1999.

DukeSolutions, the company’s integrated industrial and commercial energy services business, expanded its on the customer’s site, or "inside-the-fence," presence in the industrial and institutional marketplace. It was awarded an energy management project by Eastman Chemical Company’s Tennessee Operations and expanded its relationship with Harmony Products, agreeing to develop at least four additional waste-to-energy facilities.

Duke Engineering & Services (DE&S) is Duke Energy’s energy engineering, technical and professional services business. During the quarter, DE&S announced an agreement with Siemens Power Corporation to provide digital instrumentation and control upgrade services to the U.S. nuclear power industry.

Duke/Fluor Daniel (D/FD) maintained its position as North America’s market leader in thermal power plant engineering, construction, procurement, operations and maintenance in 2000. D/FD now has gained experience on projects with a total generating capacity of more than 90,000 megawatts. These projects have ranged in size from 6 megawatts to 2,700 megawatts. D/FD continues to provide primary support to DENA and DEI projects, increasing Duke Energy’s competitive advantage through integration across business units and first-to-market capabilities.

Field Services
For 2000, the Field Services segment, which represents Duke Energy’s majority interest in Duke Energy Field Services, reported EBIT of $296 million, a 106-percent increase over 1999. For the quarter, the segment posted earnings increases with reported EBIT of $78 million, a 66-percent increase over fourth quarter 1999.

Duke Energy Field Services built upon its industry leading midstream position on several fronts. The combination of Duke Energy’s gas gathering and processing business with Phillips Petroleum’s GPM Gas Corporation unit earlier in the year had a positive impact as did other merger and acquisition activity such as the strategic gathering and processing assets DEFS acquired from Conoco and Mitchell Energy. Further, DEFS realized a full year of earnings stemming from its acquisition of UPFuels and saw increased NGL prices in each quarter. All those factors contributed to the increase in EBIT for DEFS for the year.

Natural Gas Transmission
For the year, the Natural Gas Transmission segment reported EBIT of $534 million, an 8-percent increase over 1999 excluding the gain on the sale of Duke Energy’s interest in the Alliance Pipeline, benefits relating to environmental clean-up programs and earnings attributable to the Midwest pipelines. For the quarter, the segment reported EBIT of $136 million compared to $121 million in the same period last year, excluding the gain on the sale of Duke Energy’s interest in the Alliance Pipeline Project.

Duke Energy Gas Transmission’s (DEGT) positive results are attributed to earnings generated by acquisitions, a full year’s operation of Maritimes & Northeast Pipeline and the continued expansion of business to new electric generation plants. During the year, DEGT acquired the natural gas storage business Market Hub Partners and the East Tennessee Natural Gas Pipeline. These acquisitions led to additional earnings opportunities including the second-quarter interconnection of ETNG with DEGT’s Texas Eastern Transmission system and an announced extension of ETNG called "Patriot" that will serve markets in Virginia and North Carolina. These developments increase demand for transportation services on the Texas Eastern system from the Gulf Coast and will extend DEGT’s integrated natural gas pipeline system further into high growth markets in the Southeast.

Franchised Electric
For 2000, the Franchised Electric business segment reported EBIT of $1,704 million, a 3-percent increase over 1999. For the fourth quarter, the segment reported EBIT of $309 million, a 1-percent decrease compared with fourth quarter 1999. EBIT for the year and the 1999 quarter exclude the charge for contingency reserves related to power plant construction activity. Strong economic growth resulted in increased demand for power and improved earnings for the segment. Franchised Electric experienced favorable weather and a 2.5-percent growth in the total average number of customers. Sales to residential customers increased 13.1 percent and sales to industrial customers decreased 2.3 percent during the quarter.

Duke Ventures
For the year, the Duke Ventures business segment, comprised of Crescent Resources, DukeNet Communications and Duke Capital Partners, reported EBIT of $156 million excluding the gain realized on the sale of DukeNet’s interest in the BellSouth PCS business, a slight decrease from 1999. In the fourth quarter, the segment reported EBIT of $89 million, an 8-percent decrease from EBIT of $97 million in 1999, primarily due to decreased land and commercial project sales at Crescent Resources and costs associated with the start-up of Duke Capital Partners. The decreases were partially offset by increased residential developed lot sales.

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 more than $49 billion in 2000. 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.

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