DUKE ENERGY EARNS 57 CENTS PER SHARE IN SECOND QUARTER

• Gas Transmission EBIT up 120 percent due to addition of Canadian assets
• Energy Services increases domestic merchant portfolio to more than 12,000 megawatts
• Company revises forecast for 2002 EPS results to $2.45 to $2.55
• Company discusses capital expenditures and 2003 earnings guidance
• Company's trading investigation concludes no material financial impact

CHARLOTTE, N.C. -- Duke Energy earned 57 cents per share in second quarter 2002, compared with 54 cents per share in second quarter 2001, as greater earnings from the company's gas transmission businesses were offset by lower results at Duke Energy North America (DENA). During the quarter, the company completed construction of a new natural gas pipeline to Florida and significantly increased its merchant energy portfolio to more than 12,000 megawatts.

For the first half of 2002, Duke Energy earned $1.05 a share, compared to $1.27 per share during the first half of 2001, before the 13-cent per share charge in first quarter 2001 for the cumulative effect of a change in accounting principle. Year-to-date earnings before interest and taxes (EBIT) were $1.8 billion, compared to $2.2 billion last year.

"Our second quarter results reflect the high quality operational performance that is our hallmark," said Richard B. Priory, chairman, president and chief executive officer of Duke Energy. "The recent dramatic softening of the energy market is affecting our near-term outlook, and we've accordingly adjusted our business plan to reflect this climate and to align future expectations with the reality of these markets."

Capital Expenditures

"We will reduce our annual capital expenditures consistent with the reduced opportunities present in the changing energy markets. Our current expectation for capex spending this year is approximately $6.8 billion, excluding the acquisition of Westcoast. For 2003 and 2004, we expect our annual capex program to be about $4 billion to $6 billion. These figures include an annual maintenance capex of about $2 billion each year. Our previous guidance included estimates of annual capex spending of $6 billion to $8 billion.

Earnings Guidance

"In light of the reduced capital expenditures for business expansion and the decreased opportunities for the trading and marketing business, we believe earnings per share for 2002 will be in a range of $2.45 to $2.55, which is at the lower end or slightly below our previous guidance. These lower expectations are primarily the result of reduced volatility, subdued commodity pricing and reduced energy demand due to the prolonged economic downturn," Priory continued.

"For 2003, we expect earnings to grow from 5 percent to 10 percent per share above the 2002 base. The 2003 projection also includes expected lower results for Duke Power, as we begin the seven-year amortization of the $1.5 billion in planned expenditures called for in North Carolina's recently passed "clean air" legislation.

"Our view of the future can certainly be impacted by the rapidly changing market. Therefore, we will review the guidance on earnings growth and capital expenditures as part of our business planning cycle and provide an update in January.

Trading and Marketing Business

"Although energy trading has been under severe pressure, the trading and marketing business is an integral part of Duke Energy's ongoing strategy of maximizing returns on our asset positions while providing valuable risk management services to our energy customers."

The company has continued its comprehensive review of its trading activities following the interim reply last week to the Security and Exchange Commission's (SEC) informal data request regarding round-trip trading. The SEC response is being finalized and will be filed shortly.

Duke Energy has concluded its investigation and has determined that there is no material financial impact in current or prior periods. In the course of the investigations, the company identified the need to strengthen some aspects of its trading operations and is taking appropriate management actions.

BUSINESS UNIT RESULTS

The company's Energy Services businesses, which include DENA, International Energy and Other Energy Services segments, delivered combined EBIT of $335 million for second quarter, compared to $328 million during the same period last year. The company revised the reporting segments within Energy Services to provide greater transparency into DENA's operations. Duke Energy Merchants (DEM) is now reported in the Other Energy Services segment.

Duke Energy North America

DENA, which includes Duke Energy's 60 percent share of interest in Duke Energy Trading and Marketing (DETM), reported EBIT of $196 million for the quarter, compared to $272 million in EBIT during second quarter 2001. Last year's second quarter included net gains from the sale of interests in power plants and DENA's ability to profit from atypical levels of market volatility, whereas this quarter's results were achieved in a market with reduced spark spreads and lower volatility. Also, the 2002 second quarter EBIT includes the appreciation of the fair value of the mark-to-market portfolio of $46 million as a result of applying improved and standardized valuation modeling techniques for all North American regions.

Year-to-date EBIT for DENA is $250 million, compared to $656 million in 2001.

During the quarter, DENA added 5,120 megawatts to its merchant portfolio, all ahead of schedule and under budget. An additional 1,380 megawatts were brought on line in July with the remaining 160 megawatts scheduled for commercial operation in August. This additional generation will bring DENA's operating portfolio to more than 14,000 megawatts, providing DENA with significant earnings growth opportunities in the third quarter and beyond.

DENA also announced origination transactions with Nevada Power and Georgia Power as well as the sale of its ownership interest in the Fredrickson generating facility in Washington.

International Energy

For second quarter 2002, the International Energy segment, composed of the Asia-Pacific, Latin American and European regional businesses of Duke Energy International (DEI), delivered EBIT of $67 million, essentially flat compared to second quarter 2001. Results for the quarter were positively impacted by strong performance throughout DEI's Latin American portfolio, and by the addition to DEI's portfolio of assets associated with Duke Energy's acquisition of Westcoast Energy. These positive impacts were offset by lower results in Europe due to decreased liquidity and margin. Year-to-date EBIT was $134 million, as compared to $144 million in 2001.

During the quarter, DEI made significant progress on the construction of the Tasmania Natural Gas Pipeline, which is on schedule for commercial operation in third quarter 2002, and on the construction of the company's new 165-megawatt plant in Guatemala.

Other Energy Services

Other Energy Services, the financial reporting unit that includes Duke/Fluor Daniel (D/FD) and DEM, reported EBIT of $72 million for second quarter 2002, versus an EBIT loss of $12 million in second quarter 2001. Year-to-date EBIT was $83 million, as compared to an EBIT loss of $44 million in 2001.

D/FD's results for the quarter were positively impacted by the completion of 10 plants, which on average were completed more than two weeks ahead of schedule. Most of the plants completed during the quarter were constructed for DENA. As such, the related profit is eliminated in the consolidation of Duke Energy's reported EBIT.

Also during the quarter, Duke Energy closed the sale of Duke Engineering & Services to French-based Framatome ANP Inc. and the sale of DukeSolutions to Framingham, Mass.-based Ameresco Inc. The net gain taken in second quarter 2002 for these sales was $14 million. DEM benefited from a gain of $15 million on the sale of Duke Energy's interest in Canadian 88, which was offset by lower commodity pricing impacting its trading results.

Gas Transmission

The Natural Gas Transmission segment reported second quarter EBIT of $312 million, a 120-percent increase over the $142 million in second quarter 2001. Results included the first full quarter of earnings from the recently acquired Westcoast Energy natural gas transmission and distribution assets, which contributed $109 million to second quarter EBIT.

Earnings associated with the Gulfstream Natural Gas System, inclusive of a $27 million fee for the successful completion of this pipeline that went into service in May, also contributed to the increase. Gulfstream, a 581-mile pipeline system, 50-percent-owned by Duke Energy, is the first new pipeline to serve Florida in 40 years and the largest interstate pipeline in the Gulf of Mexico.

Year-to-date EBIT for Gas Transmission was $580 million, as compared to $317 million in 2001.

Field Services

The Field Services business segment, which represents Duke Energy's majority interest in Duke Energy Field Services (DEFS), reported EBIT of $41 million as compared to $84 million in second quarter 2001. Results were primarily affected by a decrease in natural gas liquids (NGL) prices and increased operating costs. The average NGL price per gallon was 37 cents in the quarter, as opposed to 48 cents in second quarter 2001. Additionally, the company increased its reserves primarily for imbalances with customers and suppliers by $12 million and took a charge of $6 million for storage inventory write-down. The EBIT impact to Duke Energy after minority interest is $13 million. Acquisition of a 33-percent interest in Discovery Pipeline was completed during second quarter.

Year-to-date EBIT for Field Services was $76 million, as compared to $207 million in 2001.

Franchised Electric

EBIT from Duke Energy's franchised electric business was $389 million versus $361 million for second quarter 2001. This increase is primarily due to reduced maintenance expenses in 2002 as compared to last year's second quarter. Favorable weather conditions in 2002, compared to 2001, were offset by lower sales to industrial customers affected by economic downturn.

Year-to-date EBIT for Franchised Electric was $774 million, as compared to $821 million in 2001.

Next year Duke Power will begin the seven-year amortization of the estimated $1.5 billion in planned expenditures called for in the recently passed "clean air" legislation in North Carolina. This landmark state legislation will allow Duke Power to meet rigorous new state standards for power plant emissions, while keeping electric rates frozen for five years.

Duke Ventures

The Duke Ventures business segment, composed of Crescent Resources, DukeNet Communications and Duke Capital Partners, reported EBIT of $56 million for second quarter 2002, versus $36 million for second quarter 2001. The increase is primarily due to a gain of $30 million on the sale of water assets. Year-to-date EBIT for Duke Ventures was $62 million, as compared to $43 million in 2001.

FINANCIAL STATEMENTS

Duke Energy increased disclosure by releasing its income statement, balance sheet and condensed cash flow statement.

OTHER IMPACT ON EARNINGS AVAILABLE FOR COMMON

Interest expense was $264 million for second quarter 2002, as compared to $202 million for second quarter 2001. The increase is primarily due to debt acquired in conjunction with the Westcoast Energy acquisition.

TRADING AND RISK MANAGEMENT

Duke Energy released the following metrics for its trading and marketing operations. Daily earnings at risk (DER), a measure of the likely one-day favorable or unfavorable movements in commodity prices and their corresponding effects on EBIT within Duke Energy's trading portfolio, averaged $15 million in second quarter 2002. The average DER for second quarter 2001 was $27 million.

DENA's merchant generation portfolio (the "accrual book") -- including merchant generation facilities and hedging contracts held for power, natural gas, crude oil and petroleum products had a total estimated value of $6.4 billion as of June 30, 2002. On a cumulative basis, approximately 9 percent of the fair value of these contracts is expected to be realized by the end of 2002, 20 percent through 2003, 31 percent through 2004 and the remainder in 2005 and beyond.

The expected DENA North American merchant generation output hedged for 2003 is 72 percent, for 2004 is 56 percent and for 2005 is 55 percent.

The value of Duke Energy's portfolio attributable to trading contracts, or its mark-to-market (MTM) trading portfolio book, was $1.2 billion, or 16 percent of the total. On a cumulative basis, approximately 22 percent of the fair value of these contracts is expected to be realized by the end of 2002, 40 percent through 2003, 56 percent through 2004 and the remainder in 2005 and beyond. Under MTM accounting rules, the change in the fair value of trading contracts is recognized in earnings during the current period. The unrealized MTM margin for second quarter 2002 was a positive margin of $103 million compared with a negative margin of approximately $68 million for first quarter 2002.

Duke Energy is a diversified multinational energy company with an integrated network of energy assets and expertise. The company manages a dynamic portfolio of natural gas and supply, delivery and trading businesses - meeting the energy needs of customers throughout North America and in key markets around the world. 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.

An earnings conference call for analysts is scheduled for 10 a.m. ET today. The conference call can be accessed via the investors' section of Duke Energy's Web site or by dialing 800/946-0783 in the United States or 719/457-2658 outside the United States. The confirmation code is 718838. Please call in 5 to10 minutes prior to the scheduled start time. A replay of the conference call will be available for 30 days by dialing 888/203-1112 with a confirmation code of 718838. The international replay number is 719/457-0820, confirmation code 718838. A replay and transcript also will be available by accessing the investors' section of the company's Web site.

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 forward-looking statements herein include legislative and regulatory developments; the outcomes of litigation and regulatory proceedings or inquiries; the effectiveness of the company's risk management and internal controls systems; the timing and extent of changes in 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; conditions of the capital markets and equity markets during the periods covered by the forward-looking statements and other factors discussed in Duke Energy's filings with the Securities and Exchange Commission.