DUKE ENERGY REPORTS THIRD QUARTER 2004 RESULTS

• Reported earnings of 41 cents per share versus 5 cents in prior year's quarter; ongoing EPS of 38 cents versus 35 cents in third quarter of 2003  

• All business units positioned to meet or exceed 2004 financial goals

• DEFS continuing to benefit from favorable commodity prices

• DENA results affected by positive mark-to-market earnings of 3 cents per share

• Debt reduction will exceed 2004 goal of $4 billion, which includes $840 million of debt retired through Australian asset sales

• Lower interest expense driven by accelerated debt reduction

CHARLOTTE, N.C. -- Duke Energy reported net income in the third quarter of 2004 of $389 million, or $0.41 per share, compared to net income of $49 million, or $0.05 per share in the third quarter of 2003.

Excluding special items, ongoing third quarter earnings per share (EPS) were $0.38 versus $0.35 in the prior year’s quarter.

"With three solid quarters behind us, we expect to finish 2004 ahead of the financial plans we laid out at the beginning of the year," said Paul Anderson, Duke Energy chairman of the board and chief executive officer. "We are now focused on realizing further improvements to our financial and operational results for 2005."

Special items for the quarter include:

Special items EPS year-to-date impact:

* Includes results from operations primarily in International Energy, DENA, Crescent Resources and Field
   Services that have been discontinued.

BUSINESS UNIT RESULTS

Franchised Electric
Third quarter 2004 earnings before interest and taxes (EBIT) from Franchised Electric were $453 million, compared to third quarter 2003 EBIT of $436 million. EBIT was affected in third quarter 2004 by higher non-nuclear operating and maintenance costs, including $10 million in storm costs primarily related to Hurricane Ivan, and lower bulk power sales.

Customer growth for Franchised Electric continues to be positive, with approximately 40,000 more customers than in third quarter 2003.

In the prior year, EBIT for Franchised Electric was reduced by $30 million due to a regulatory settlement with the South Carolina Public Service Commission and $46 million for severance and related charges.

Amortization related to the implementation of the North Carolina Clean Air Act for the quarter was $109 million versus $53 million in third quarter 2003.

Year-to-date EBIT for Franchised Electric was $1,215 million, compared with $1,206 million in 2003.

Natural Gas Transmission
Duke Energy Gas Transmission (DEGT) reported third quarter 2004 EBIT of $265 million compared to $280 million in the prior year’s quarter. Results were positively affected by pipeline expansion projects and a $12 million favorable impact from the stronger Canadian currency. During the quarter, DEGT realized a $5 million gain on the sale of its interest in the Millennium Pipeline project.

The 2003 third quarter included gains of $31 million from asset sales and $17 million of benefits related to the reversal of certain tax reserves. These items were partially offset by an $18 million charge for severance and related costs in the third quarter of last year.

The favorable Canadian currency impact on DEGT’s EBIT was partially offset in Duke Energy’s consolidated net income by currency impacts on interest and taxes.

During the third quarter, DEGT held a successful comprehensive open season in which eastern North American markets indicated substantial interest in transportation and storage infrastructure expansion opportunities on any one or a combination of Algonquin, Texas Eastern and Union Gas. In addition, DEGT filed with FERC to build an 11-mile lateral to connect Texas Eastern to British Petroleum’s proposed LNG import terminal at Logan, N.J.

Year-to-date EBIT for Natural Gas Transmission was $974 million, compared with $1,009 million in 2003.

Field Services
The Field Services business segment, which represents Duke Energy's 70-percent interest in Duke Energy Field Services (DEFS), reported third quarter 2004 EBIT from continuing operations of $67 million, compared to $51 million in the third quarter of 2003.

The increase was primarily driven by higher commodity prices compared to last year’s quarter. During the quarter, Field Services took a $26 million impairment charge, net of minority interest, largely related to its periodic review of the carrying value of its assets and equity investments and disposal of certain assets during the quarter.

During the quarter, DEFS paid a dividend, of which Duke Energy’s portion was $98 million. This payment reflects continuing strong cash flow and earnings at DEFS.

Year-to-date EBIT from continuing operations for Field Services was $253 million, compared with $136 million in 2003.

Duke Energy North America
Duke Energy North America (DENA) reported an EBIT loss from continuing operations of $17 million in the third quarter of 2004, compared to an EBIT loss from continuing operations of $411 million in the prior year’s quarter.

For the third quarter of 2004, DENA’s results were positively impacted by continued expense reductions and a positive $40 million in mark-to-market earnings, net of minority interest. Results were negatively affected by lower margins and lower than expected production at DENA’s generation assets due to cooler than expected weather in the Midwest.

Results for the third quarter of 2003 included a number of special charges which totaled $357 million.

Overall year-to-date EBIT loss from continuing operations for DENA was $612 million – largely driven by a loss of approximately $360 million related to the sale of the southeast generation assets and $23 million in mark-to-market losses, net of minority interest. This compares to an EBIT loss from continuing operations of $177 million in 2003.

International Energy
For the third quarter of 2004, Duke Energy International (DEI) reported EBIT from continuing operations of $64 million, compared to $44 million in the third quarter of 2003.

The increase was driven by better results at National Methanol, due mainly to stronger MTBE prices, and a reduction in environmental reserves in Brazil.

Year-to-date EBIT from continuing operations for International Energy was $161 million, compared with $175 million in 2003.

Crescent Resources
Crescent Resources reported third quarter 2004 EBIT from continuing operations of $43 million, compared to $39 million in the third quarter of 2003.

Better results with commercial and residential developments were mostly offset by lower land sales during the previous year’s quarter.

Year-to-date EBIT from continuing operations for Crescent Resources was $190 million, compared with $61 million in 2003.

Other
Other, which includes corporate costs, DukeNet Communications, Duke/Fluor Daniel and Duke Energy Merchants (DEM) reported an EBIT loss of $25 million in the third quarter of 2004, compared to an EBIT loss of $88 million in the third quarter of 2003. The 2003 EBIT loss included charges of $33 million related to severance and related costs.

Year-to-date EBIT for Other was a loss of $56 million, compared with a loss of $205 million in 2003.

Discontinued Operations
The operations reported as discontinued resulted in a third quarter 2004 loss of $12 million. This compares to third quarter 2003 income of $44 million.

Year-to-date income for Discontinued Operations was $260 million, compared with $61 million in 2003.

INCOME TAXES

Third quarter 2004 income tax expense from continuing operations was $129 million. During the quarter, Duke Energy recorded a $48 million benefit related to the southeast asset sale as a result of the realignment of certain subsidiaries of Duke Energy resulting in a lower-than-normal tax rate.

INTEREST EXPENSE

Interest expense was $342 million for the third quarter of 2004, compared to $375 million for the third quarter of 2003. The decline was due mainly to overall debt reduction, which will exceed $4 billion for the current year, including approximately $840 million of non-cash debt reduction as part of the sale of the Australian assets.

LIQUIDITY AND CAPITAL RESOURCES

Duke Energy's consolidated capital structure at the end of third quarter 2004, including short-term debt, was 55 percent debt, 41 percent common equity and 4 percent minority interests.

Under various credit facilities, Duke Energy, Duke Capital and other subsidiaries had the ability to borrow up to $2.6 billion at the end of the third quarter of 2004. The companies had borrowings and letters of credit outstanding under these programs of approximately $1.1 billion as of the end of the third quarter of 2004, resulting in unused capacity of approximately $1.5 billion. The company also had approximately $2.9 billion in cash and cash equivalents at the end of third quarter 2004.

On Oct. 28, the company made a voluntary $250 million cash contribution to its U.S. pension fund. As a result of making the contribution, the company will not be required to make a contribution to this plan in 2005.

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 third quarter 2004 earnings information Web site at: http://www.duke-energy.com/investors/.

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.

The 2004 debt reduction goal of $4 billion represents a non-GAAP measure because it includes approximately $840 million that was retired by the buyer as part of the sale of the Australian assets, which represents a non-cash financing activity under GAAP. The debt retired by the buyer was included in Current and Non-Current Liabilities Associated with Assets Held for Sale as of Dec. 31, 2003.

Management believes that presentation of this non-GAAP measure is useful because it reflects the settlement of amounts of indebtedness regardless of their classification in the financial statements or of the means of settlement.

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/ or by dialing 800/289-0572 in the United States or 913/981-5543 outside the United States. The confirmation code is 444978. 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 444978 through midnight ET, Nov. 12. The international replay number is 719/457-0820, confirmation code 444978. 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/. 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/publications/gaap/.

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 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

Special items for the first and second quarters (as summarized in this earnings release) include:

	©Copyright 2004 Duke Energy