News Release
June 17, 2003


CHARLOTTE, N.C. – Duke Energy welcomed the conclusion of the credit rating review by Moody’s Investors Service despite a one-notch lowering of the ratings of Duke Energy and its subsidiary Duke Capital. The company is confident that the continued execution of its financial strategy will further strengthen its balance sheet and position Duke Energy for growth in the future.

Moody’s lowered its ratings for senior unsecured debt at Duke Energy to Baa1 and Duke Capital to Baa3, both with stable outlooks. Moody’s assigned a “negative outlook” on both entities’ credit ratings in December 2002 and began a review for downgrade on March 31.

“While we would have obviously preferred that Moody’s maintain the Duke Energy and Duke Capital credit ratings, we remain confident that the effectiveness of our actions in 2003 and beyond will significantly strengthen the balance sheet and limit our exposure to the current uncertainties in the merchant energy business,” said Richard B. Priory, chairman and chief executive officer.  “We have made the tough decisions to ensure that we manage through this down cycle and maintain the financial strength necessary to capitalize on future opportunities.”

Priory said today’s action by Moody’s will not affect the 2003 operational or financial plans of the company. Therefore the company affirms its 2003 earnings per share (EPS) guidance of $1.35 - $1.60, before the cumulative effect of changes in accounting principles, and the previously stated $1.10 per share annual dividend.

Moody’s also lowered its credit ratings one notch on debt issued at Duke Energy subsidiaries Texas Eastern LP to Baa2 and PanEnergy to Baa3, as well as the rating for commercial paper at Duke Capital to P-3, which were also on “review for downgrade.”  The outlook for each is now stable. Moody's confirmed Duke Energy's rating for commercial paper at P-2.

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 electric 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 500 company traded on the New York Stock Exchange under the symbol DUK. More information about the company is available on the Internet at:

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; general economic conditions, including any potential effects arising from terrorist attacks and any consequential hostilities or other hostilities; 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 natural gas and electric markets; the performance of electric generation, pipeline and natural 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.

Contact: Terry Francisco, Media Contact
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