News Release
April 29, 2004

DUKE ENERGY REPORTS FIRST QUARTER 2004 RESULTS

  • Ongoing first quarter earnings per share (EPS) of 32 cents versus 42 cents in previous year; reported EPS of 36 cents versus 25 cents in prior year’s quarter

  • Company expects to exceed full-year asset sales and cash flow targets; debt reduction ahead of schedule

  • Proceeds from announced asset sales year-to-date to generate approximately $1.5 billion

  • Field Services posts more than 200-percent increase in EBIT from continuing operations

  • Franchised Electric and Natural Gas Transmission continue to post solid earnings and cash flow

  • DENA results affected by mark-to-market loss of 6 cents per share

CHARLOTTE, N.C. – Duke Energy reported net income in the first quarter of 2004 of $334 million, or $0.36 per share, compared to net income of $225 million, or $0.25 per share in the first quarter of 2003.

Ongoing earnings per share (EPS) for the first quarter of 2004, which excludes special items, was $0.32 versus $0.42 for the comparable quarter.

"We have made exceptional progress in executing our 2004 business and financial plan. By closing the sale of our Australian assets, we have already met our asset sales target of $1.5 billion for 2004,” said Paul Anderson, Duke Energy chairman of the board and chief executive officer. "Overall, ongoing earnings were in line with our expectations except for DENA, which was affected by mark-to-market losses. Thanks to our asset sales and continued solid earnings and cash flow from our franchised electric and natural gas pipeline businesses, Duke Energy's financial strength and flexibility are rapidly improving. As a result, our key businesses are positioned to selectively pursue growth opportunities."

Special items for the quarter include:

($ in Millions)
Pre-Tax Amount
Tax Effect
2004 EPS Impact
2003 EPS Impact 
First Quarter
  • Gain on sale of Australian assets
$256
($18) 
$0.26
--
  • Net loss on sale of DENA assets, primarily anticipated sale of southeast U.S. plants
(322)
119 
(0.22)
--
  • Gains on sale of other assets, including Caribbean Nitrogen Co.
14 
(5) 
0.01
--
  • Charge related to planned sale of Cantarell investment
(13)
(0.01)
--
 
First quarter 2003
  • 2003 gain on asset sales
16 
(5)
--
$0.01 
  • 2003 change in accounting principles
(256)
94 
--
(0.18)
TOTAL EPS IMPACT    
$0.04 
($0.17)
EPS, as reported
 
 
$0.36 
$0.25 
EPS, ongoing
 
 
$0.32 
$0.42 


BUSINESS UNIT RESULTS

Franchised Electric
First quarter 2004 earnings before interest and taxes (EBIT) from Duke Power totaled $424 million, compared to the first quarter of 2003 EBIT of $454 million. The decrease for the quarter was driven primarily by reduced wholesale power sales and additional costs for planned nuclear outages compared to the previous year’s quarter. Storm repair costs were lower during the quarter than in the prior year’s quarter. Storm damages, most notably a wind storm in early March 2004 in North Carolina, cost $11 million, compared to last year’s first quarter ice storm costs of $35 million.

Favorable weather pushed residential sales up 3.4 percent during the quarter while industrial sales continued to decrease – down 4 percent from last year’s quarter. As part of Duke Power’s 100th anniversary of service, the utility has put a renewed emphasis on economic development in North Carolina and South Carolina to increase commercial and industrial sales.

Natural Gas Transmission
Duke Energy Gas Transmission (DEGT) reported first quarter 2004 EBIT of $398 million compared to $423 million in the prior year’s quarter. The decrease is primarily a result of gains of $16 million from asset sales recorded in the prior year’s quarter, and foregone earnings of $17 million in this year’s quarter from various assets sold during 2003. Excluding these amounts related to assets sold, EBIT increased $8 million as a result of contributions from U.S. business expansions and foreign exchange impacts from the strengthening Canadian currency. This was partly offset by warmer weather affecting Union Gas, the Canadian gas distribution business, and project development costs capitalized in the prior year’s period.

The favorable Canadian currency impacts on DEGT’s EBIT were partially offset in Duke Energy’s net income by currency impacts on Canadian interest, taxes and other hedging strategies.

Field Services
The Field Services business segment, which represents Duke Energy's 70-percent interest in Duke Energy Field Services (DEFS), reported first quarter 2004 EBIT of $92 million from continuing operations, compared to $30 million in the first quarter of 2003. The more than 200-percent increase was primarily due to the favorable effects of commodity prices, net of hedging, compared to last year’s quarter and improved results from trading and marketing activities.

During the first quarter of 2004, DEFS declared and paid a $50 million dividend, of which $35 million was paid to Duke Energy.

Duke Energy North America
Duke Energy North America (DENA) reported an EBIT loss of $521 million in the first quarter of 2004, compared to EBIT of $23 million in the prior year’s quarter.

The most significant factors in the loss were: 1) an additional $325 million non-cash loss associated with the anticipated sale of DENA’s southeast U.S. plants, and 2) a mark-to-market loss of $93 million, $87 million after minority interest, taken during the quarter as a result of changes in power and gas prices.

Excluding the net loss on the sale of assets and mark-to-market changes, DENA’s first quarter 2004 EBIT loss would have been $106 million.

International Energy
For the first quarter of 2004, Duke Energy International (DEI) reported EBIT from continuing operations of $29 million, compared to $40 million in the first quarter of 2003. During the quarter, DEI recorded a $13 million non-cash charge to EBIT from continuing operations associated with its intention to sell its ownership share of Cantarell, a nitrogen-production plant in Mexico.

Crescent Resources
Crescent Resources, Duke Energy’s affiliated real estate company, is now reporting earnings as a separate segment. Crescent reported first quarter 2004 EBIT from continuing operations of $60 million versus a break-even first quarter 2003, due to increased land and commercial sales.

Other
Other, including DukeNet Communications, Duke/Fluor Daniel, Duke Energy Merchants, Energy Delivery Services and corporate costs, reported an EBIT loss of $5 million in the first quarter of 2004, compared to an EBIT loss of $48 million in the first quarter of 2003. This improvement is primarily a result of charges taken in 2003 related to exiting proprietary trading at Duke Energy Merchants and the 2004 gain on the sale of Caribbean Nitrogen Co.

Discontinued Operations
At the end of 2003, in accordance with generally accepted accounting principles, Duke Energy re-classified the results for certain operations to a separate line on the statement of operations called “Income (Loss) from Discontinued Operations.” The amounts reported as discontinued operations are reported net of tax. The business units affected by this reclassification are International Energy, Field Services and Other. All reported periods have been restated.

Discontinued Operations generated first quarter 2004 results of $246 million, compared to a first quarter 2003 loss of $5 million, as a result of a $238 million gain, net of tax, on the sale of the Australian assets.

INTEREST EXPENSE

Interest expense was $356 million for the first quarter of 2004, compared to $326 million for the first quarter of 2003. Interest increased primarily due to lower capitalized interest of $14 million, $16 million of interest associated with the re-classification of certain trust preferred securities from minority interest to long-term debt, an $11 million charge related to the re-marketing costs associated with the equity units at Duke Capital and $9 million associated with the Canadian exchange rate. These increases were offset by a $20 million decrease from net debt reduction, refinancing activities and lower interest cost in Brazil.

LIQUIDITY AND CAPITAL RESOURCES

Duke Energy's consolidated capital structure at the end of first quarter 2004, including short-term debt, was 58 percent debt, 37 percent common equity and 5 percent minority interests.

Under various credit facilities, Duke Energy, Duke Capital and other subsidiaries had the ability to borrow up to $3.3 billion at the end of the first quarter of 2004. The companies had borrowings and letters of credit outstanding under these programs of approximately $1.4 billion as of the end of the first quarter of 2004, resulting in unused capacity of approximately $1.9 billion. The company also had approximately $1.5 billion in cash and cash equivalents as of the end of the first quarter of 2004.

ADDITIONAL INFORMATION

Additional information, including EPS reconciliation data and a schedule for Duke Energy Field Services gas volume and margin by contract type, can be obtained at Duke Energy’s first quarter 2004 earnings information Web site at: http://www.duke-energy.com/investors/financial/latest/default.asp.

NON-GAAP FINANCIAL MEASURES

The primary performance measure used by management to evaluate segment performance is EBIT from continuing operations, which at the segment level represents all profits from continuing operations (both operating and non-operating) before deducting interest and taxes, and is net of the minority interest expense related to those profits. Management believes EBIT from continuing operations is a good indicator of each segment’s operating performance as it represents the results of our ownership interests in continuing operations without regard to financing methods or capital structures.

EBIT from continuing operations should not be considered an alternative to, or more meaningful than, net income, income from continuing operations, operating income or cash flow as determined in accordance with generally accepted accounting principles (GAAP). Duke Energy’s EBIT from continuing operations may not be comparable to a similarly titled measure of another company.

Duke Energy’s management uses ongoing EPS, which represents net income adjusted for special items, as one of the measures to evaluate operations of the company. Special items represent certain charges which management believes will not be recurring on a regular basis. Management believes that the presentation of ongoing EPS provides useful information to investors, as it allows them to more accurately compare the company’s ongoing performance across all periods.

Duke Energy is a diversified energy company with a portfolio of natural gas and electric businesses, both regulated and unregulated, and an affiliated real estate company. Duke Energy supplies, delivers and processes energy for customers in North America and selected international markets. In 2004, the company celebrates a century of service with the 100th anniversary of its electric utility Duke Power. Headquartered in Charlotte, N.C., Duke Energy 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: 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 http://www.duke-energy.com/investors/financial/latest/default.asp or by dialing 800/946-0742 in the United States or 719/457-2650 outside the United States. The confirmation code is 598456. Please call in five to 10 minutes prior to the scheduled start time. A replay of the conference call will be available by dialing 888/203-1112 with a confirmation code of 598456. The international replay number is 719/457-0820, confirmation code 598456. A replay and transcript also will be available by accessing the investors' section of the company’s Web site http://www.duke-energy.com/investors/financial/latest/default.asp. The presentation may include certain non-GAAP financial measures as defined under SEC rules. In such event, a reconciliation of those measures to the most directly comparable GAAP measures will be available on our investor relations Web site at: http://www.duke-energy.com/investors/financial/gaap/default.asp.

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 are discussed in Duke Energy’s filings with the Securities and Exchange Commission.
Media Contact: Randy Wheeless
Phone: 704/382-8379
24 Hour Phone: 704/382-8333
Email: crwheele@duke-energy.com
Analyst Contact: Greg Ebel
Phone: 704/382-8118

 


MARCH 2004
QUARTERLY HIGHLIGHTS
(unaudited)
 
 
Three Months Ended
March 31,
 

(In millions, except where noted)
2004
2003

COMMON STOCK DATA
Earnings Per Share (from continuing operations)
    Basic
$0.09 
$0.43 
    Diluted
$0.09 
$0.43 
Earnings Per Share (from discontinued operations)
    Basic
$0.27 
$  -     
    Diluted
$0.27 
$  -     
Earnings Per Share (before cumulative effect of change in accounting principle)
    Basic
$0.36 
$0.43 
    Diluted
$0.36 
$0.43 
Earnings Per Share
    Basic
$0.36 
$0.25 
    Diluted
$0.36 
$0.25 
Dividends Per Share
$0.275 
$0.275 
Weighted-Average Shares Outstanding
    Basic
912 
897 
    Diluted
915 
897 

INCOME
Operating Revenues
$5,845 
$6,172 
 
 
Earnings Before Interest and Taxes (EBIT)
528 
963 
Interest Expense (a)
356 
326 
Minority Interest Expense (a)
38 
50 
Income Tax Expense
46 
195 
Income (Loss) from Discontinued Operations
246 
(5)
Cumulative Effect of Change in Accounting Principle, net of tax and
    minority interest
-
(162)
 
 
Net Income
334 
225 
Dividends and Premiums on Redemptions of Preferred and Preference Stock
 
 
Earnings Available for Common Stockholders
$332 
$222 
 
 

CAPITALIZATION
    Common Equity
37%
37%
    Preferred Stock
0%
1%
    Trust Preferred Securities
0%
3%
 
 
Total Common Equity and Preferred Securities
37%
41%
 
Minority Interests
5%
4%
Total Debt
58%
55%

Total Debt
$21,798 
$22,357 
Book Value Per Share
$15.32 
$16.99 
Actual Shares Outstanding
914 
900 

CAPITAL AND INVESTMENT EXPENDITURES
    Franchised Electric
$262 
$258 
    Natural Gas Transmission
154 
216 
    Field Services
25 
31 
    Duke Energy North America
160 
    International Energy
25 
    Crescent (b)
162 
54 
    Other
-
61 
 


Total Capital and Investment Expenditures
$620 
$805 
 
 

EBIT BY BUSINESS SEGMENT
    Franchised Electric
$424 
$454 
    Natural Gas Transmission
398 
423 
    Field Services
92 
30 
    Duke Energy North America
(521)
23 
    International Energy
29 
40 
    Crescent (b)
60 
-
    Other
(5)
(48)
 
 
Total Segment and Other EBIT
477 
922 
    EBIT Attributable to:
        Minority Interest Expense
50 
43 
        Third Party Interest Income
        Foreign Currency Remeasurement Loss
(5)
(4)
        Intercompany EBIT Elimination (c)
(1)
-
 
 
Total EBIT
$528 
$963 
 


(a) Minority interest includes financing expenses related to securities of subsidiaries of $27 million for the three months ended March 31, 2003. The expense related to these securities is accounted for in interest expense in 2004.

(b) Beginning in 2004, Crescent, formerly part of Other, is considered a reportable segment.

(c) Amount relates to the elimination of intercompany EBIT that has been reclassified to discontinued operations.

 

MARCH 2004
QUARTERLY HIGHLIGHTS
(unaudited)
 
Three Months Ended
March 31,
 
(In millions, except where noted)
2004
2003

FRANCHISED ELECTRIC
    Operating Revenues
$1,271 
$1,251 
    Operating Expenses
851 
813 
    Other Income, net of expenses
16 
 
 
    EBIT
$424 
$454 
 


    Sales, GWh
21,963 
22,043 

NATURAL GAS TRANSMISSION
    Operating Revenues
$1,038 
$968 
    Operating Expenses
638 
567 
    Other Income, net of expenses (e)
35 
    Minority Interest Expense
13 
 
 
    EBIT
$398 
$423 
 
 
    Proportional Throughput, TBtu
1,089 
1,082 

FIELD SERVICES (d)
    Operating Revenues
$2,375 
$2,550 
    Operating Expenses
2,249 
2,509 
    Other Income, net of expenses
18 
15 
    Minority Interest Expense
52 
26 
 
 
    EBIT
$92 
$30 
 
 
    Natural Gas Gathered and Processed/Transported, TBtu/day
7.3 
7.7 
    Natural Gas Liquids Production, MBbl/d
356.7 
367.9 
    Average Natural Gas Price per MMBtu
$5.69 
$6.59 
    Average Natural Gas Liquids Price per Gallon
$0.59 
$0.58 

DUKE ENERGY NORTH AMERICA
    Operating Revenues
$656 
$1,396 
    Operating Expenses
865 
1,382 
    Loss on Sales of Other Assets, net (a)
(322)
-
    Other Income, net of expenses
(4)
    Minority Interest Benefit
(14)
-
 
 
    EBIT
$(521)
$23 
 
 
    Actual Plant Production, GWh (c)
5,461 
5,110 
    Proportional MW Capacity in Operation
15,821 
14,156 

INTERNATIONAL ENERGY (d)
    Operating Revenues
$154 
$172 
    Operating Expenses
131 
135 
    Other Income, net of expenses
    Minority Interest Expense
 
 
    EBIT
$29 
$40 
 
 
    Sales, GWh
4,564 
3,969 
    Proportional MW Capacity in Operation
4,121 
4,013 

CRESCENT (d)
    Operating Revenues
$195 
$23 
    Operating Expenses
134 
23 
    Minority Interest Expense
$ -  
 
 
    EBIT
$60 
$ -  
 


    Residential Developed Lot Sales
$32 
$14 
    Commercial Project Sales
$116 
$ -  
    Real Estate Land Sales
$1 
$2 
    Land Management Land Sales
$39 
$2 

OTHER (d)
    Operating Revenues
$344 
$517 
    Operating Expenses
387 
582 
    Gains on Sales of Other Assets, net (b)
14 
-
    Other Income, net of expenses
24 
17 
 
 
    EBIT
$(5)
$(48)
 
 

(a) Amount includes DENA Southeast plant impairment of $325 million and gain on sale of Duke Energy Trading & Marketing contracts.

(b) Primarily represents Duke Energy Merchant's gain on sale of interest in Carribean Nitrogen Company

(c) Represents 100% of GWh.    

(d) Prior year amounts have been reclassified due to discontinued operations. 

(e) Prior year includes gain on sale of limited partnership interests in Northern Border Partners L.P. of $14 million.

 

CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In millions, except per-share amounts)
                 
 
Three Months Ended
March 31,
 
 
 
 
2004
2003
 
 
 
 
Operating Revenues                
    Non-regulated electric, natural gas, natural gas liquids, and other
$3,612 
$4,014 
 
    Regulated electric
1,251 
1,279 
 
    Regulated natural gas
982 
879 
 
 
 
 
        Total operating revenues
5,845 
6,172 
 
 
 
 
Operating Expenses
 
    Natural gas and petroleum products purchased
3,032 
3,492 
 
    Operation and maintenance
882 
674 
 
    Fuel used in electric generation and purchased power
564 
548 
 
    Depreciation and amortization
436 
431 
 
    Property and other taxes
154 
140 
 
 
 
 
    Total operating expenses
5,068 
5,285 
 
 
 
 
(Losses) Gains on Sales of Other Assets, net
(308)
2  
 
 
 
 
Operating Income
469  
889 
 
 
 
 
Other Income and Expenses
 
    Equity in earnings of unconsolidated affiliates
34 
34 
 
    Gains on sales of equity investments
14 
 
    Other income and expenses, net
25 
26 
 
 
 
 
        Total other income and expenses
59 
74 
 
Interest Expense
356 
326 
 
Minority Interest Expense
38 
50 
 
 
 
 
Earnings From Continuing Operations Before Income Taxes
134
587 
 
Income Tax Expense from Continuing Operations
46 
195
 
 
 
 
Income From Continuing Operations
88 
392 
 
Discontinued Operations
 
    Net operating income, net of tax
 
    Net income (loss) on dispositions, net of tax
239 
(8)
 
 
 
 
Income (Loss) From Discontinued Operations
246 
(5)
 
         
 
Income Before Cumulative Effect of Change in Accounting Principle
334 
387 
 
Cumulative Effect of Change in Accounting Principle, net of tax and minority interest
-
(162)
 
 
 
 
Net Income
334 
225 
 
 
 
Dividends and Premiums on Redemption of Preferred and Preference Stock
 
 
 
 
 
 
Earnings Available For Common Stockholders
$332 
$222 
 
 
 
 
         
 
Common Stock Data
 
    Weighted-average shares outstanding
 
        Basic
912 
897 
 
        Diluted
915 
897 
 
    Earnings per share (from continuing operations)
 
        Basic
$0.09 
$0.43 
 
        Diluted
$0.09 
$0.43 
 
    Earnings per share (from discontinued operations)
 
        Basic
$0.27 
$  -    
 
        Diluted
$0.27 
$  -    
 
    Earnings per share (before cumulative effect of change in accounting principle)
 
        Basic
$0.36 
$0.43 
 
        Diluted
$0.36 
$0.43 
 
    Earnings per share
 
        Basic
$0.36 
$0.25 
 
        Diluted
$0.36 
$0.25 
 
    Dividends per share
$0.275 
$0.275 
 

 

CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions)
 
 
March 31,
2004
 
December 31,
2003
 
 
ASSETS
Current Assets
    Cash and cash equivalents
$1,500 
$1,160 
    Receivables
2,689 
2,888 
    Inventory
878 
1,156 
    Assets held for sale
297 
424 
    Unrealized gains on mark-to-market and hedging transactions
1,320 
1,566 
    Other
1,056 
694 
 
 
        Total current assets
7,740 
7,888 
 


       
Investments and Other Assets
   Investments in unconsolidated affiliates
1,365 
1,398 
   Nuclear decommissioning trust funds
960 
925 
   Goodwill
3,932 
3,962 
    Notes receivable
232 
260 
    Unrealized gains on mark-to-market and hedging transactions
1,635 
1,857 
    Assets held for sale
2,119 
1,444 
    Other
887 
1,117 
 
 
        Total investments and other assets
11,130 
10,963 
 


       
Property, Plant and Equipment
    Cost
46,719 
47,157 
    Less accumulated depreciation and amortization
12,641 
12,171 
 
 
        Net property, plant and equipment
34,078 
34,986 
 


       
Regulatory Assets and Deferred Debits
    Deferred debt expense
326 
275 
    Regulatory assets related to income taxes
1,194 
1,152 
    Other
913 
939 
 
 
        Total regulatory assets and deferred debits
2,433 
2,366 
 


 
    Total Assets
$55,381 
$56,203 
 


 

CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions)
 
 
March 31,
2004
 
December 31,
2003
 
 
LIABILITIES AND COMMON STOCKHOLDERS' EQUITY
 
Current Liabilities
    Accounts payable
$2,000 
$2,317 
    Notes payable and commercial paper
275 
130 
    Taxes accrued
293 
14 
    Interest accrued
305 
304 
    Liabilities associated with assets held for sale
883 
651 
    Current maturities of long-term debt
1,489 
1,200 
    Unrealized losses on mark-to-market and hedging transactions
993 
1,283 
    Other
1,396 
1,799 
 
 
        Total current liabilities
7,634 
7,698 
 
 
 
Long-term Debt, including debt to affiliates of $516 at March 31, 2004
     and $876 at December 31, 2003
20,034 
20,622 
 
 
 
Deferred Credits and Other Liabilities
    Deferred income taxes
4,290 
4,120 
    Investment tax credit
162 
165 
    Unrealized losses on mark-to-market and hedging transactions
1,556 
1,754 
    Liabilities associated with assets held for sale
305 
737 
    Other
5,541 
5,524 
 
 
         Total deferred credits and other liabilities
11,854 
12,300 
 
 
Commitments and Contingencies
Minority Interests
1,723 
1,701 
 
 
Preferred and preference stock without sinking fund requirements
134 
134 
 
 
 
Common Stockholders' Equity
    Common stock, no par, 2 billion shares authorized; 914 million and
      911 million shares outstanding at March 31, 2004
      and December 31, 2003, respectively
9,598 
9,519 
    Retained earnings
4,145 
4,060 
    Accumulated other comprehensive income
259 
169 
 
 
        Total common stockholders' equity
14,002 
13,748 
 
 
    Total Liabilities and Common Stockholders' Equity
$55,381 
$56,203 
 


 

DUKE ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
 
 
Three Months Ended
March 31,
 
 
2004
 
2003
 
 
       
CASH FLOWS FROM OPERATING ACTIVITIES      
    Net income
$334 
$225 
    Adjustments to reconcile net income to net cash provided by
        operating activities
    Depreciation and amortization (including amortization of nuclear fuel)
476 
484 
    Cumulative effect of change in accounting principle
-
162 
    Net losses (gains) on sales of equity investments and other assets
50 
(4)
    Net realized and unrealized mark-to-market and hedging transactions
221 
(116)
    Changes in working capital and other
225 
753 
 
 
        Net cash provided by operating activities
1,306 
1,504 
 
 
 
CASH FLOWS FROM INVESTING ACTIVITIES
    Capital and investment expenditures, net of refund
(620)
(805)
    Net proceeds from the sales of equity investment and other assets,
        and sales of and collections on notes receivable
166 
306 
    Other
(5)
24 
 
 
        Net cash used in investing activities
(459)
(475)
 
 
 
CASH FLOWS FROM FINANCING ACTIVITIES
    Proceeds from the
        Issuance of long-term debt
72 
824 
        Issuance of common stock and common stock
59 
80 
 
    Payments for the redemption of long-term debt, and
        net paydown of commercial paper and notes payable
(288)
(1,189)
    Dividends paid
(265)
(258)
    Other
(54)
(234)
 
 
        Net cash used in financing activities
(476)
(777)
 
 
    Changes in cash and cash equivalents associated with assets held for
        sale
(31)
-
 
 
 
    Net increase in cash and cash equivalents
340 
252 
    Cash and cash equivalents at beginning of period
1,160 
857 
 
 
    Cash and cash equivalents at end of period
$1,500 
$1,109 
 


 

Supplemental Disclosures
Quarter Ended March 31, 2004
 
Duke Energy Corporation              

 
1Q04
           
 
           
               
Mark-to-market Portfolio (in millions)
$(264)
           
 
           
Daily Value at Risk (DvaR) (in millions)
           
 
           
95% Confidence Level, One-Day Holding Period, Two-Tailed
           
Average for the Period
$23 
           
               
               
               
Duke Energy North America              

(in millions unless stated otherwise)
Q-T-D March 31, 2004
               
  Proprietary   Structured   Owned    
Merchant Energy Gross Margin Trading   Contracts   Assets   Total
 
 
 
 
Mark-to-market gross margin (loss)
$3 
$(95)
$(1)
$(93)
Accrual gross margin (loss)
n/a
(11)
65 
54 
 
 
 
 
Total Gross Margin
$3 
$(106)
$64 
(39)
 
 
 
   
 
    Reconciliation to Segment EBIT:
    Plant depreciation
(47)
    Plant operating and maintenance expenses
(79)
    General and administrative and other expenses
(48)
    Minority interest
14 
    Gain (loss) on sale of other assets
(322)
             
DENA Segment EBIT
$(521)
             
               
               
Owned Assets - Merchant Plant Production              
and Hedging Information (a)
2004(b)
2005
2006
   
 
 
 
   
Estimated available production (millions of MWh)
48 
64 
64 
   
    Combined cycle
42 
56 
56 
   
    Peaker units
   
 
   
Estimated production (millions of MWh)
15 
24 
27 
   
    Combined cycle
15 
23 
26 
   
    Peaker units
-
   
 
   
Hedges
   
    Estimated production sold
95%
70%
63%
   
    Average price sold ($/MWh)
$46 
$45 
$42 
   
               
               
(a) All figures exclude Southeast plants.
(b) Information for 2004 is for the remainder of the year only (April - December).

 

Supplemental Disclosures
Quarter Ended March 31, 2004
                       
Duke Energy North America (continued)

(in millions)
                       
                       
Maturity/Source of Carrying Value of Energy Contract Net Assets
2004
2005
2006
2007
Over
4 Years
Total
Fair Value
 
 
 
 
 
 
Proprietary Trading
    Actively quoted prices and
       other external sources
$109 
$6 
$28 
$(9)
$(19)
$115 
    Modeled
(4)
13 
10 
34 
 
 
 
 
 
 
 
$105 
$19 
$36 
$(2)
$(9)
$149 
 
 
 
 
 
   
Structured Contracts
    Actively quoted prices and
        other external sources
$47 
$36 
$(70)
$(62)
$(87)
$(136)
    Modeled
(48)
(22)
(31)
(7)
(23)
(131)
 
 
 
 
 
 
 
$(1)
$14 
$(101)
$(69)
$(110)
$(267)
 
 
 
 
 
   
Owned Assets
    Actively quoted prices and
        other external sources
$260 
$213 
$149 
$74 
$53 
$749 
    Modeled
-
-
-
-
21 
21 
 
 
 
 
 
 
 
$260 
$213 
$149 
$74 
$74 
$770 
 
 
 
 
 
   
 
Total Fair Value of Energy Contract Net Assets *
$652 
                       
 
* Total Carrying Value of Energy Contract Net Assets represents the combination of amounts presented as assets and (liabilities) related to unrealized gains or losses on mark-to-market and hedging transactions for Duke Energy North America.
 
 
Terms of Reference

 
Estimated Available Production
Represents the amount of electric power capable of being generated from owned merchant assets, after adjusting for scheduled maintenance and outage factors. For simple cycle facilities, only peak demand periods were included in this calculation.
 
Estimated Production
Represents the amount of power expected to be sold in a future period. This figure is based on economic projections modeled by Duke Energy personnel.
 
Estimated Production Sold
Represents the portion of estimated production which has been hedged, primarily through firm physical contracts.
 
Owned Assets
Represents activity around energy assets owned or leased, including hedges of power sales and fuel purchase requirements and tolls, transmission, transportations and storage contracts that hedge owned assets. Normal purchases and sales associated with such assets are included in the Merchant Energy Gross Margin table, yet excluded from the Maturity/Sources of Fair Value of Energy Contract Net Assets table. Economic hedges of Owned Assets that do not meet hedge accounting standards will still be classified as Owned Assets in the Merchant Energy Gross Margin table.
 
Proprietary Trading
Standardized contracts entered into to take a market view, capture market price changes or put capital at risk.
 
Structured Contracts
Non-standard contracts not associated with owned or leased assets and involving significant tailoring of terms to meet customer needs, and associated hedges. This category includes tolls, transmission contracts, transportation contracts and storage contracts, except those that hedge Owned Assets. Economic hedges of Structured Contracts that do not meet hedge accounting standards will still be classified as Structured Contracts in the Merchant Energy Gross Margin table.