News Release
August 3, 2005

DUKE ENERGY REPORTS SECOND QUARTER 2005 RESULTS

  • Reported basic earnings per share of 33 cents in second quarter 2005 versus 46 cents in previous year; 31 cents in ongoing basic EPS versus 42 cents in prior year’s quarter

  • Mild weather dampens sales at Franchised Electric and DENA

  • Field Services and International post strong quarter

  • Company on track to meet 2005 EPS incentive target

CHARLOTTE, N.C. -- Duke Energy today reported second quarter 2005 basic earnings per share (EPS) of $0.33, or $309 million in net income, compared to $0.46 per share in second quarter 2004, or $432 million. On a diluted basis, second quarter 2005 earnings were $0.32 per share, compared to $0.45 in second quarter 2004.

Ongoing basic EPS for second quarter 2005, which excludes special items, were $0.31 versus $0.42 in second quarter 2004. On a diluted basis, ongoing EPS for second quarter 2005 were $0.30 compared to $0.42 in second quarter 2004.

"Thanks to a strong performance from Field Services and International, our results are on plan with respect to where we thought we would be at this point in the year. Mild weather hurt sales at our merchant and regulated electric businesses this quarter, but we remain confident that we will be able to achieve our 2005 EPS incentive of $1.60 per share," said Paul Anderson, chairman of the board and chief executive officer. That incentive should track basic ongoing earnings.

"Looking to full-year results, the weather in July portends a stronger third quarter for Duke Power and Duke Energy North America. Based on transactions expected in the second half, Crescent is poised to meet or exceed last year’s results. And International expects to have an exceptional year," he said.

Anderson added the company’s debt reduction efforts in 2004 continue to help Duke Energy in 2005. Second quarter 2005 interest expense was $39 million less than the previous year’s quarter.

Special items impacting basic EPS for the quarter include:

 
Pre-Tax  Amount 
Tax  Effect 
2005 
EPS  Impact 
2004 
EPS  Impact 
($ in Millions)        
         

Second quarter 2005

       
  • Settlement of positions on 2005 Field Services' hedges that were de-designated
$22 
($8)
$0.02 
-- 
  • Mark-to-market gain on de-designated 2005 Field Services' hedges
(2)
-- 
-- 
Second quarter 2004
 
 
 
 
  • Enron settlement (net of minority interest of $5 million)
$130 
($46)
-- 
$0.09 
  • True-up on net gain on sale of International Energy assets
38 
(9)
-- 
0.03 
  • California and western U.S. energy markets settlement
(105)
37 
-- 
(0.07)
  • Net losses on asset sales (net of minority interest of $6 million)
(8)
-- 
-- 
  • Interest related to litigation reserve
(12)
-- 
(0.01)
Total basic EPS impact
$0.02 
$0.04 
  Basic EPS, as reported
$0.33 
$0.46 
  Basic EPS, ongoing *
$0.31 
$0.42 

Special items EPS year-to-date impact:

 
2005 
2004 
First quarter
$0.47 
-- 
Second quarter
$0.02 
$0.04 
Impact of change in shares
outstanding and rounding
$0.01 
-- 
Total EPS Impact
$0.50 
$0.04 
Year-to-date EPS as reported
$1.25 
$0.80 
Year-to-date EPS, ongoing*
$0.75 
$0.76 

* Includes results from operations in Duke Energy North America, International Energy, Field Services and Crescent Resources that have been discontinued.

BUSINESS UNIT RESULTS

Franchised Electric
Second quarter 2005 segment EBIT from continuing operations for Franchised Electric was $274 million, compared to $338 million in the prior year’s quarter. The decrease was driven by milder weather, which lowered residential sales 9.1 percent. Also contributing to the decrease were higher operating and maintenance expenses -- mainly additional planned power plant outages, increased right of way maintenance expenses and storm costs.

The decrease in segment EBIT for the quarter was partially offset by improved bulk power marketing (BPM) sales. In addition to greater sales, the improvement in BPM results was driven by a $27 million charge recorded in second quarter 2004 related to the commencement of the profit-sharing program with customers in North Carolina and South Carolina. Another positive for Franchised Electric in the quarter was an increase of 42,000 customers -- about 2 percent -- over the prior year.

J.D. Power announced last month that Duke Power ranked No. 1 in residential customer satisfaction in the South region of the United States.

Year-to-date segment EBIT from continuing operations for Franchised Electric was $610 million, compared to $762 million in 2004.

Franchised Electric remains on target to meet its annual segment growth target of zero to 2 percent for the 2005 to 2007 time period. While year-to-date segment EBIT from continuing operations is lower than the comparable period last year, the company expects segment EBIT for 2005 at or slightly below 2004 segment EBIT.

Natural Gas Transmission
Duke Energy Gas Transmission (DEGT) reported second quarter 2005 EBIT from continuing operations of $302 million compared to $311 million in the prior year’s quarter. The decrease resulted from a benefit of $17 million for the favorable resolution of ad valorem tax issues in several states and a $9 million gain on the sale of assets, both in second quarter 2004. Continued contributions from U.S. expansion projects and a $9 million benefit due to a stronger Canadian currency boosted earnings for the second quarter 2005.

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

Year-to-date EBIT from continuing operations for Natural Gas Transmission was $709 million, compared with $709 million in 2004.

Natural Gas Transmission continues to expect its ongoing annual segment EBIT growth rate to be in the range of 3 percent to 5 percent for the 2005 to 2007 time period. The recent transfer of Field Services’ Canadian assets and the addition of the Empress system from ConocoPhillips will contribute to earnings growth and put DEGT at the high end of this range for 2005.

Field Services
The Field Services business segment, which in the quarter represented Duke Energy's 70-percent interest in Duke Energy Field Services (DEFS), reported second quarter 2005 EBIT from continuing operations of $166 million compared to $95 million in second quarter 2004.

The increase was primarily driven by higher commodity prices, net of hedging, slightly offset by increased operating expenses and the absence of earnings from TEPPCO, which was sold in first quarter 2005.

On July 5, 2005, Duke Energy transferred a 19.7 percent interest in DEFS to ConocoPhillips in exchange for cash and assets of approximately $1.1 billion. Going forward, DEFS will be a 50/50 joint venture between Duke Energy and ConocoPhillips.

Year-to-date EBIT from continuing operations for Field Services was approximately $1.09 billion, compared to $186 million in 2004. The company expects ongoing equity earnings from its 50-percent interest in Field Services for the last half of 2005 to be about $200 million, not adjusted for the remaining recognition of the hedge de-designation of negative $73 million, and net of interest expense.

Duke Energy North America
Duke Energy North America (DENA) reported a segment EBIT loss from continuing operations of $56 million in second quarter 2005, compared to a loss of $38 million in second quarter 2004.

The increased loss for the quarter was due to reduced generation sales as a result of milder weather in the West and losses related to the current weakness in the gas transportation business, which resulted in lower margins in the second quarter of 2005 versus 2004. These losses were partially offset by reductions in operating and general and administrative expenses during second quarter 2005. Additionally, mark-to-market earnings in second quarter 2005 were flat, representing a $24 million decrease ($22 million before minority interest) from second quarter 2004, due primarily to the absence of last year’s mark-to-market gains that were related to favorable market price changes on the disqualified hedge positions.

Overall year-to-date EBIT loss from continuing operations for DENA was $91 million, compared to a $595 million loss in 2004.

Provided that hot summer weather occurs in the third quarter, the company expects DENA to reach its 2005 goal of no more than a $150 million ongoing segment EBIT loss.

International Energy
For second quarter 2005, Duke Energy International (DEI) reported segment EBIT from continuing operations of $86 million, compared to $68 million in second quarter 2004. The results were driven primarily by improved performance in Brazil due to increased volumes offset by lower prices, the stronger Brazilian real and higher commodity prices at National Methanol.

The favorable currency impacts on DEI’s EBIT were partially offset in Duke Energy’s net income by currency impacts on Brazilian interest and taxes.

Year-to-date EBIT from continuing operations for International Energy was $154 million, compared with $97 million in 2004.

International Energy expects to see ongoing annual segment EBIT growth in the 2 percent to 3 percent range over the 2005 to 2007 time period. However, International Energy is expecting to have a very good year in 2005 as a result of improved Latin America operations, higher prices at our National Methanol business and favorable foreign currency exchange.

Crescent Resources
Crescent Resources reported second quarter 2005 segment EBIT from continuing operations of $39 million, compared to $87 million in the previous year’s quarter. The difference was largely due to a $45 million gain on a commercial land sale at Potomac Yard in northern Virginia, which occurred in second quarter 2004.

Year-to-date EBIT from continuing operations for Crescent Resources was $91 million, compared with $147 million in 2004.

As the result of continuing strength in real estate markets this year, segment EBIT from continuing and discontinued operations for 2005 is expected to be at, or above, the results for 2004 -- which were approximately $250 million.

Other
Other includes the cost of corporate governance, DukeNet Communications, the company’s 50-percent interest in Duke/Fluor Daniel, Duke Energy Merchants, Duke Energy’s captive insurance company Bison Insurance Co. Limited and de-designated hedges resulting from the decision to transfer a 19.7 percent interest in DEFS to ConocoPhillips. Other reported an EBIT loss from continuing operations of $88 million in second quarter 2005, compared to a loss of $26 million in second quarter 2004. The additional losses were due primarily to increased liabilities associated with mutual insurance companies, the change in value of the de-designated hedges during the quarter and the gain on the Enron bankruptcy settlement in second quarter 2004.

Year-to-date EBIT loss from continuing operations for Other was $257 million, compared with a $31 million EBIT loss in 2004.

Ongoing EBIT for Other is expected to remain in the $200 million loss range annually, excluding any changes due to mark-to-market fluctuations on the de-designated hedges.

Discontinued Operations
Discontinued Operations showed a second quarter 2005 loss of $2 million, compared to a gain of $26 million in 2004. The difference was due primarily to a true-up on the net gain on the sale of International Energy assets in the second quarter 2004.

Year-to-date, Discontinued Operations posted a loss of $1 million, compared with a gain of $272 million in 2004.

INTEREST EXPENSE

Interest expense was $297 million for second quarter 2005, compared to $336 million for second quarter 2004. This decrease was primarily due to the company’s debt reduction efforts in 2004.

Year-to-date interest expense was $590 million, compared with interest expense of $692 million in 2004.

INCOME TAX

Second quarter 2005 income tax expense from continuing operations was $151 million, compared to $134 million in second quarter 2004. During second quarter 2004, Duke Energy released income tax reserves of approximately $52 million, resulting from the resolution of various outstanding income tax issues during the quarter and changes in estimates. The impact of this prior year release of income tax reserves was offset by lower pretax earnings during second quarter 2005, as compared to the same period in 2004.

Year-to-date income tax expense from continuing operations was $598 million, compared to $167 million in 2004.

LIQUIDITY AND CAPITAL RESOURCES

Duke Energy's consolidated capital structure at the end of second quarter 2005, including short-term debt, was 50 percent debt, 45 percent common equity and 5 percent minority interests. The company had approximately $2.05 billion in cash, cash equivalents and short-term investments at the end of second quarter 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 second quarter 2005 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 segment 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 segment EBIT from continuing operations, which is the GAAP measure used to report segment results, 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.

Duke Energy’s management uses ongoing basic and diluted EPS, which are non-GAAP financial measures as they represent basic and diluted EPS adjusted for the impact of special items, as two of the measures to evaluate operations of the company. Special items represent certain charges and credits which management believes will not be recurring on a regular basis. Management believes that the presentation of ongoing basic and diluted EPS provides useful information to investors, as it allows them to more accurately compare the company’s ongoing performance across all periods. Ongoing basic EPS is also the basis used for employee incentive bonuses. The most directly comparable GAAP measures for ongoing basic and diluted EPS are reported basic and diluted EPS, respectively, which include the impact of special items. Due to the forward-looking nature of ongoing basic and diluted EPS for future periods, information to reconcile such non-GAAP financial measures to the most directly comparable GAAP financial measure is not available at this time as the company is unable to forecast any special items for future periods.

Duke Energy also uses ongoing segment EBIT as a measure of historical and anticipated future segment performance. When used for future periods, ongoing segment EBIT may also include any amounts that may be reported as discontinued operations. Ongoing segment EBIT is a non-GAAP financial measure as it represents reported segment EBIT adjusted for special items. Management believes that the presentation of ongoing segment EBIT provides useful information to investors, as it allows them to more accurately compare a segment’s ongoing performance across all periods. The most directly comparable GAAP measure for ongoing segment EBIT is reported segment EBIT, which represents EBIT from continuing operations, including any special items. Due to the forward-looking nature of forecasted ongoing segment EBIT and related growth rates for future periods, information to reconcile these non-GAAP financial measures to the most directly comparable GAAP financial measures is not available at this time as the company is unable to forecast any special items or any amounts that may be reported as discontinued operations for future periods.

Duke Energy also uses segment EBIT from continuing and discontinued operations as a measure of historical and anticipated future segment performance for Crescent Resources. Since selling commercial and multi-family assets is an ongoing part of operations for Crescent Resources, it is likely that Crescent Resources will report discontinued operations on a recurring basis under normal operating conditions. Accordingly, management believes that the presentation of segment EBIT from continuing and discontinued operations provides useful information to investors, as it allows them to compare Crescent’s total performance across all periods. The most directly comparable GAAP measure for Crescent’s segment EBIT from continuing and discontinued operations is reported segment EBIT from continuing operations. Information to reconcile this non-GAAP financial measure to the most directly comparable GAAP financial measure is not available at this time as the company is unable to forecast those Crescent operations, if any, which will be discontinued operations during 2005.

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 the Americas. 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 800/475-3716 in the United States or 719/457-2728 outside the United States. The confirmation code is 4199913. Please call in five to 10 minutes prior to the scheduled start time. A replay of the conference call will be available until Aug. 12, 2005, midnight ET, by dialing 888/203-1112 with a confirmation code of 4199913. The international replay number is 719/457-0820, confirmation code 4199913. A replay and transcript also will be available by accessing the investors' section of the company’s Web site. 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 release includes statements that do not directly or exclusively relate to historical facts. Such statements are "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. Those statements represent Duke Energy’s intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors, many of which are outside Duke Energy’s control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. Those factors include: industrial, commercial and residential growth in Duke Energy’s service territories; the influence of weather on company operations; general economic conditions, including any potential effects arising from terrorist attacks and any consequential hostilities or other hostilities or other external factors over which Duke Energy has no control; changes in environmental and other laws and regulations to which Duke Energy and its subsidiaries are subject; the results of financing efforts, including Duke Energy’s ability to obtain financing on favorable terms, which can be affected by various factors, including Duke Energy’s credit ratings and general economic conditions; declines in the market prices of equity securities and resultant cash funding requirements for Duke Energy’s defined benefit pension plans; the performance of electric generation, pipeline and gas processing facilities; the extent of success in connecting natural gas supplies to gathering and processing systems and in connecting and expanding gas and electric markets; conditions of the capital markets and equity markets during the periods covered by the forward-looking statements; the effect of accounting pronouncements issued periodically by accounting standard-setting bodies; the outcomes of litigation and regulatory investigations, proceedings or inquiries and other contingencies; the level of creditworthiness of counterparties to Duke Energy’s transactions; the amount of collateral required to be posted from time to time in Duke Energy’s transactions; opportunities for Duke Energy’s business units, including the timing and success of efforts to develop domestic and international power, pipeline, gathering, liquefied natural gas, processing and other infrastructure projects.

In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than Duke Energy has described. Duke Energy undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Information contained in this release is unaudited, and is subject to change.

Media Contact: Randy Wheeless
Phone: 704/382-8379
24 Hour Phone: 704/382-8333
Email: crwheele@duke-energy.com
Analyst Contact: Julie Dill
Phone: 980/373-4332

JUNE 2005
QUARTERLY HIGHLIGHTS
(Unaudited)
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
 
(In millions, except where noted)
2005
2004
2005
2004

COMMON STOCK DATA              
Earnings Per Share (from continuing operations)              
  Basic
$0.33 
$0.43 
$1.25 
$0.50 
  Diluted
$0.32 
$0.42 
$1.20 
$0.49 
Earnings Per Share (from discontinued operations)
  Basic
$- 
$0.03 
$- 
$0.30 
  Diluted
$- 
$0.03 
$- 
$0.29 
Earnings Per Share
  Basic
$0.33 
$0.46 
$1.25 
$0.80 
  Diluted
$0.32 
$0.45 
$1.20 
$0.78 
Dividends Per Share
$0.585 
$0.550 
$0.860 
$0.825 
Weighted-Average Shares Outstanding
  Basic
927 
926 
941 
919 
  Diluted
964 
961 
977 
954 
 

INCOME
Operating Revenues
$5,654 
$5,316 
$11,403 
$10,952 
 
 
 
 
Total Reportable Segment EBIT
811 
861 
2,560 
1,306 
Other EBIT
(88)
(26)
(257)
(31)
Interest Expense
297 
336 
590 
692 
Interest Income and Other (a)
(36)
(41)
(63)
(55)
Income Tax Expense from Continuing Operations
151 
134 
598 
167 
(Loss) Income from Discontinued Operations
(2)
26 
(1)
272 
 
 
 
 
Net Income
309 
432 
1,177 
743 
Dividends and Premiums on Redemption of Preferred and Preference Stock
 
 
 
 
Earnings Available for Common Stockholders
$307 
$429 
$1,173 
$738 
 
 
 
 
 

CAPITALIZATION
Common Equity
45%
39%
Preferred Stock
0%
0%
         
 
Total Common Equity and Preferred Securities
45%
39%
Minority Interests
5%
5%
Total Debt
50%
56%

Total Debt
$18,368 
$21,153 
Book Value Per Share
$17.58 
$15.52 
Actual Shares Outstanding
926 
938 

CAPITAL AND INVESTMENT EXPENDITURES
Franchised Electric
$287 
$254 
$578 
$528 
Natural Gas Transmission
129 
102 
225 
256 
Field Services
50 
107 
99 
132 
Duke Energy North America
14 
International Energy
12 
15 
Crescent (b)
191 
122 
331 
284 
Other
10 
24 
 
 
 
 
Total Capital and Investment Expenditures
$674 
$603 
$1,260 
$1,253 
 
 
 
 

EBIT BY BUSINESS SEGMENT
Franchised Electric
$274 
$338 
$610 
$762 
Natural Gas Transmission
302 
311 
709 
709 
Field Services
166 
95 
1,087 
186 
Duke Energy North America
(56)
(38)
(91)
(595)
International Energy
86 
68 
154 
97 
Crescent
39 
87 
91 
147 
 
 
 
 
Total reportable segment EBIT
811 
861 
2,560 
1,306 
Other EBIT
(88)
(26)
(257)
(31)
Interest expense
(297)
(336)
(590)
(692)
Interest Income and Other (a)
36 
41 
63 
55 
 
 
 
 
Consolidated earnings from continuing operations before income taxes
$462 
$540 
$1,776 
$638 
 
 
 
 

(a) Other includes foreign currency remeasurement gains and losses and additional minority interest not allocated to the segment results.
(b) Amounts include capital expenditures for residential real estate included in operating cash flows of $118 million and $92 million for the three months ended June 30, 2005 and 2004 respectively, and $209 million and $138 million for the six months ended June 30, 2005 and 2004, respectively.

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JUNE 2005
QUARTERLY HIGHLIGHTS
(Unaudited)
               
 
Three Months Ended
Six Months Ended
 
June 30,
June 30,
 
 
(In millions, except where noted)
2005
 
2004
2005
 
2004

FRANCHISED ELECTRIC              
Operating Revenues
$1,234 
 
$1,228 
$2,499 
 
$2,499 
Operating Expenses
959 
 
896 
1,890 
 
1,747 
Gains on Sales of Other Assets, net
 
 
Other (Expense) Income, net
(1)
 
 
 
 
 
 
EBIT
$274 
 
$338 
$610 
 
$762 
 
 
 
 
 
 
 
Sales, GWh
20,431 
 
20,087 
41,594 
 
42,050 
 
 
 

NATURAL GAS TRANSMISSION
 
 
Operating Revenues
$749 
 
$688 
$1,924 
 
$1,726 
Operating Expenses
457 
 
397 
1,233 
 
1,035 
Gains on Sales of Other Assets, net
 
 
Other Income, net of expenses
14 
 
13 
28 
 
19 
Minority Interest Expense
 
14 
 
10 
 
 
 
 
EBIT
$302 
 
$311 
$709 
 
$709 
 
 
 
 
 
 
 
Proportional Throughput, TBtu
719 
 
726 
1,775 
 
1,815 
 
 
 

FIELD SERVICES (a)
 
 
Operating Revenues
$2,888 
 
$2,341 
$5,562 
 
$4,694 
Operating Expenses
2,651 
 
2,209 
5,237 
 
4,437 
Gains on Sales of Other Assets, net
 
 
Other Income, net of expenses
 
15 
1,258 
 
33 
Minority Interest Expense
78 
 
52 
498 
 
104 
 
 
 
 
EBIT
$166 
 
$95 
$1,087 
 
$186 
 
 
 
 
 
 
 
Natural Gas Gathered and Processed/Transported, TBtu/day (b)
7.3 
 
7.4 
7.2 
 
7.3 
Natural Gas Liquids Production, MBbl/d (b)
370 
 
368 
367 
 
360 
Average Natural Gas Price per MMBtu
$6.73 
 
$5.99 
$6.50 
 
$5.84 
Average Natural Gas Liquids Price per Gallon
$0.75 
 
$0.61 
$0.74 
 
$0.60 
 
 
 

DUKE ENERGY NORTH AMERICA (a)
 
 
Operating Revenues
$463 
 
$646 
$931 
 
$1,270 
Operating Expenses
525 
 
674 
1,063 
 
1,515 
(Losses) Gains on Sales of Other Assets, net (c)
(1)
 
(16)
27 
 
(368)
Other Income (Expense), net
 
 
(2)
Minority Interest Benefit
(4)
 
(6)
(10)
 
(20)
 
 
 
 
EBIT
$(56)
 
$(38)
$(91)
 
$(595)
 
 
 
 
 
 
 
Actual Plant Production, GWh (d)
3,939 
 
5,422 
7,895 
 
10,883 
Proportional MW Capacity in Operation
 
9,890 
 
15,465 
 
 
 

INTERNATIONAL ENERGY
 
 
Operating Revenues
$182 
 
$147 
$350 
 
$301 
Operating Expenses
127 
 
98 
246 
 
229 
Other Income, net of expenses
34 
 
22 
55 
 
31 
Minority Interest Expense
 
 
 
 
 
 
EBIT
$86 
 
$68 
$154 
 
$97 
 
 
 
 
 
 
 
Sales, GWh
4,527 
 
4,247 
9,062 
 
8,811 
Proportional MW Capacity in Operation
 
4,139 
 
4,130 
 
 
 

CRESCENT (a)
 
 
Operating Revenues
$112 
 
$101 
$176 
 
$139 
Operating Expenses
79 
 
75 
130 
 
111 
Gains on Sales of Investments in Commercial and Multi-Family Real Estate
12 
 
62 
54 
 
121 
Other Expense, net
(1)
 
(1)
 
Minority Interest Expense
 
 
 
 
 
 
EBIT
$39 
 
$87 
$91 
 
$147 
 
 
 
 
 
 
 
OTHER
 
 
Operating Revenues
$149 
 
$290 
$189 
 
$634 
Operating Expenses
241 
 
311 
451 
 
698 
(Losses) Gains on Sales of Other Assets, net
 
(7)
 
Other Income, net of expenses
 
 
26 
 
 
 
 
EBIT
$(88)
 
$(26)
$(257)
 
$(31)
 
 
 
 
               

(a) Certain prior year amounts have been reclassified due to discontinued operations.
(b) Represents 100% of joint venture volumes.
(c) Prior year amounts for the six months ended June 30, 2004 include DENA Southeast plant impairment of approximately $360 million.
(d) Represents 100% of GWh.

Note: See GAAP reconciliation associated with the 2005 second quarter Earnings Release on the Investor Relations Web site at http://www.duke-energy.com/investors/publications/gaap/.

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DUKE ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In millions, except per-share amounts)
               
 
Three Months Ended
June 30,
Six Months Ended
June 30,
 
 
 
2005
2004
2005
 
2004
 
 
 
 
Operating Revenues
$5,654 
$5,316 
$11,403 
 
$10,952 
Operating Expenses
4,915 
4,537 
10,021 
 
9,462 
Gains on Sales of Investments in Commercial and Multi-Family Real Estate
12 
62 
54 
 
121 
(Losses) Gains on Sales of Other Assets, net
(11)
33 
 
(349)
 
 
 
 
Operating Income
751 
830 
1,469 
 
1,262 
 
 
 
 
 
 
Other Income and Expenses
85 
89 
1,390 
 
149 
Interest Expense
297 
336 
590 
 
692 
Minority Interest Expense
77 
43 
493 
 
81 
 
 
 
 
 
 
Earnings From Continuing Operations Before Income Taxes
462 
540 
1,776 
 
638 
Income Tax Expense from Continuing Operations
151 
134 
598 
 
167 
 
 
 
 
 
 
Income From Continuing Operations
311 
406 
1,178 
 
471 
(Loss) Income From Discontinued Operations, net of tax
(2)
26 
(1)
 
272 
 
 
 
 
 
 
Net Income
309 
432 
1,177 
 
743 
 
 
Dividends and Premiums on Redemption of Preferred and Preference Stock
 
 
 
Earnings Available For Common Stockholders
$307 
$429 
$1,173 
 
$738 
 
 
 
 
 
 
Common Stock Data
 
Weighted-average shares outstanding
 
Basic
927 
926 
941 
 
919 
Diluted
964 
961 
977 
 
954 
Earnings per share (from continuing operations)
 
Basic
$0.33 
$0.43 
$1.25 
 
$0.50 
Diluted
$0.32 
$0.42 
$1.20 
 
$0.49 
Earnings per share (from discontinued operations)
 
Basic
$- 
$0.03 
$- 
 
$0.30 
Diluted
$- 
$0.03 
$- 
 
$0.29 
Earnings per share
 
Basic
$0.33 
$0.46 
$1.25 
 
$0.80 
Diluted
$0.32 
$0.45 
$1.20 
 
$0.78 
Dividends per share
$0.585 
$0.550 
$0.860 
 
$0.825 

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DUKE ENERGY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions)
         
   
June 30,
December 31,
   
2005
2004
ASSETS  
 
         
Current Assets  
$7,962
$7,971
Investments and Other Assets  
12,121
11,533
Net Property, Plant and Equipment  
33,390
33,506
Regulatory Assets and Deferred Debits  
2,522
2,460
   
 
   
  Total Assets  
$55,995
$55,470
   
 
   
   
LIABILITIES AND COMMON STOCKHOLDERS' EQUITY  
   
Current Liabilities  
$7,799
$7,538
Long-term Debt  
16,359
16,932
Deferred Credits and Other Liabilities  
13,497
12,939
Minority Interests  
1,925
1,486
Preferred and preference stock without sinking fund requirements  
134
134
Common Stockholders' Equity  
16,281
16,441
   
 
   
  Total Liabilities and Common Stockholders' Equity  
$55,995
$55,470
   
 

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DUKE ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In millions)
       
 
Six Months Ended
 
June 30,
 
 
2005
 
2004
 
 
     
(as Revised -
see Note below)
CASH FLOWS FROM OPERATING ACTIVITIES      
Net income
$1,177 
 
$743 
Adjustments to reconcile net income to net cash provided by operating activities
817 
 
1,628 
 
 
Net cash provided by operating activities
1,994 
 
2,371 
 
 
 
 
CASH FLOWS FROM INVESTING ACTIVITIES
 
Net cash provided by (used in) investing activities
396 
 
(1,349)
 
 
 
 
CASH FLOWS FROM FINANCING ACTIVITIES
 
Net cash used in financing activities
(1,915)
 
(447)
 
 
 
 
Changes in cash and cash equivalents associated with assets held for sale
 
40 
 
 
 
 
Net increase in cash and cash equivalents
476 
 
615 
Cash and cash equivalents at beginning of period
533 
 
397 
 
 
Cash and cash equivalents at end of period
$1,009 
 
$1,012 
 
 

Note: The Consolidated Statement of Cash Flows for the six months ended June 30, 2004 reflects a change in the classification of expenditures for equipment related to clean air legislation in the state of North Carolina from cash flows from operating activities to cash flows from investing activities. As a result, net cash provided by operating activities for the six months ended June 30, 2004 increased by $21 million, while net cash used in investing activities for the six months ended June 30, 2004 increased by $21 million.

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Supplemental Disclosures
Quarter Ended June 30, 2005
Duke Energy Corporation                    

                           
Mark-to-market Portfolio (in millions)                    
As of 06/30/2005        
$(360)
               
                           
Daily Earnings at Risk (DER) (in millions)                    
                           
95% Confidence Level, One-Day Holding Period, Two-Tailed                    
As of 06/30/2005        
$3 
  (a)            
                           
                           

(a) This figure excludes effects of the February 22, 2005 de-designation of certain hedges of Field Services' commodity risk, which have been retained as undesignated derivatives.

                           
                           
Duke Energy North America                        

(in millions unless stated otherwise)  
Q-T-D June 30, 2005
       
                           
Total Gross Margin                
$63 
       
                 
       
Reconciliation to Segment EBIT:          
       
  Plant depreciation          
(39)
       
  Plant operating and maintenance expenses          
(54)
       
  General and administrative and other expenses          
(32)
       
  Minority interest benefit          
       
  Other income (expense), net          
       
  Gain (loss) on sales of other assets, net          
(1)
       
                 
       
DENA Segment EBIT                
$(56)
       
                 
       
                           
                           
Owned Assets - Contracted Level  
Remaining 2005
 
2006

 
 
     
Millions
         
Millions
       
 
MWs
MWh 
% Contracted 
MWh 
% Contracted 
Region
Capacity
Available 
Capacity 
Energy 
Available 
Capacity 
(c) 
Energy 


 
 
 
 
 
 
East
4,615 
18 
(b) 
17%
7%
38
(b)
10%
10%
West
5,275 
18 
37%
32%
34
11%
34%
 
 
         
       
Total
9,890 
36 
27%
19%
72
11%
21%
                           

(b) East capacity includes 3.3 million MWh from peaking facilities in 2005 and 6.7 million in 2006 and excludes plants where we own a non-controlling equity interest only.
(c) Capacity does not include Regulatory Must Run ("RMR") elections for 2006, scheduled to occur in late 2005.

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Supplemental Disclosures
Quarter Ended June 30, 2005

Terms of Reference


MWs Capacity
Represents the official rated capacity of DENA’s percentage ownership of its merchant assets excluding Bayside which has been classified as discontinued operations.

Millions MWhs Available
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.

% Contracted:
Capacity: Volumes contracted under tolls as well as Regulatory Must Run (“RMR”) and Canadian facilities.
Energy: Volumes sold as forward power hedges.

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Duke Energy Corporation
Quarterly Highlights
Supplemental Franchised Electric Information

   
Quarter Ended
June 30,
     
Year To Date
June 30,
   
     
               
%
                 
%
   
2005
 
2004
 
Inc.(Dec.)
     
2005
 
2004
 
Inc.(Dec.)
   
   
   
     
   
   
GWH Sales                                    
Residential  
5,118 
 
5,631 
 
(9.1%)
   
12,042 
 
12,662 
 
(4.9%)
General Service  
5,983 
 
6,253 
 
(4.3%)
   
11,870 
 
12,050 
 
(1.5%)
   
 
 
   
 
 
Industrial - Textile  
1,680 
 
1,850 
 
(9.2%)
   
3,255 
 
3,465 
 
(6.1%)
Industrial - Other  
4,649 
 
4,557 
 
2.0% 
   
9,019 
 
8,554 
 
5.4% 
   
   
   
     
   
   
  Total Industrial  
6,329 
 
6,407 
 
(1.2%)
   
12,274 
 
12,019 
 
2.1% 
   
 
 
   
 
 
   
 
 
   
 
 
Other Energy Sales  
67 
 
66 
 
1.5% 
   
134 
 
132 
 
1.5% 
Regular Resale  
323 
 
342 
 
(5.6%)
   
666 
 
694 
 
(4.0%)
   
 
 
   
 
 
   
   
   
     
   
   
Total Regular Sales Billed  
17,820 
 
18,699 
 
(4.7%)
   
36,986 
 
37,557 
 
(1.5%)
   
 
 
   
 
 
Special Sales (a)  
1,959 
 
913 
 
114.6% 
   
4,150 
 
3,936 
 
5.4% 
   
 
 
   
 
 
   
   
   
     
   
   
Total Electric Sales  
19,779 
 
19,612 
 
0.9% 
   
41,136 
 
41,493 
 
(0.9%)
   
 
 
   
 
 
Unbilled Revenue  
372 
 
195 
 
90.8% 
   
(173)
 
(56)
 
(208.9%)
   
 
 
   
 
 
   
   
   
     
   
   
Total Duke Power Electric Sales  
20,151 
 
19,807 
 
1.7% 
   
40,963 
 
41,437 
 
(1.1%)
   
 
 
   
 
 
Nantahala Electric Sales  
280 
 
280 
 
   
631 
 
613 
 
2.9% 
   
 
 
   
 
 
   
   
   
     
   
   
Total DP Consolidated Electric Sales  
20,431 
 
20,087 
 
1.7% 
   
41,594 
 
42,050 
 
(1.1%)
   
   
   
     
   
   
                                     
                                     
Average Number of Customers                                    
Residential  
1,833,189 
 
1,799,504 
 
1.9% 
   
1,831,498 
 
1,797,080 
 
1.9% 
General Service  
310,115 
 
304,220 
 
1.9% 
   
309,116 
 
303,047 
 
2.0% 
   
 
 
   
 
 
Industrial - Textile  
805 
 
857 
 
(6.1%)
   
811 
 
866 
 
(6.4%)
Industrial - Other  
6,656 
 
6,658 
 
   
6,667 
 
6,676 
 
(0.1%)
   
   
   
     
   
   
   
 
 
   
 
 
Total Industrial  
7,461 
 
7,515 
 
(0.7%)
   
7,478 
 
7,542 
 
(0.8%)
   
 
 
   
 
 
Other Energy Sales  
13,095 
 
11,921 
 
9.8% 
   
13,136 
 
11,692 
 
12.4% 
Regular Resale  
15 
 
15 
 
   
15 
 
15 
 
   
   
   
     
   
   
   
 
 
   
 
 
Total Regular Sales  
2,163,875 
 
2,123,175 
 
1.9% 
   
2,161,243 
 
2,119,376 
 
2.0% 
   
 
 
   
 
 
Special Sales (a)  
30 
 
34 
 
(11.8%)
   
34 
 
38 
 
(10.5%)
   
   
   
     
   
   
   
 
 
   
 
 
Total Duke Power Electric Sales  
2,163,905 
 
2,123,209 
 
1.9% 
   
2,161,277 
 
2,119,414 
 
2.0% 
   
 
 
   
 
 
Nantahala Electric Sales  
68,145 
 
66,854 
 
1.9% 
   
67,876 
 
66,549 
 
2.0% 
   
   
   
     
   
   
Total DP Average Number of Customers  
2,232,050 
 
2,190,063 
 
1.9% 
   
2,229,153 
 
2,185,963 
 
2.0% 
   
   
   
     
   
   
                                     
                                     

(a) Excludes sales to Nantahala Power and Light Company

                         
                                     
Heating and Cooling Degree Days                                    
Actual                                    
Heating Degree Days  
262 
 
213 
 
23.0% 
   
1,975 
 
2,085 
 
(5.3%)
Cooling Degree Days  
351 
 
562 
 
(37.5%)
   
351 
 
569 
 
(38.3%)
   
 
 
   
 
 
Variance from Normal  
 
 
   
 
 
Heating Degree Days  
17.1% 
 
(7.3%)
 
n/a
   
2.5% 
 
9.8% 
 
n/a
Cooling Degree Days  
(23.8%)
 
23.4% 
 
n/a
   
(24.3%)
 
24.0% 
 
n/a

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DUKE ENERGY CORPORATION
ONGOING TO REPORTED EARNINGS RECONCILIATION
June 2004 Quarter-to-date
(Dollars in Millions)
     
Special Items (Note 1)
   
                                             
   
Ongoing Earnings
Gain (Loss) on Sale
of Assets
Impairment
Enron Settlement
 
California Settlement
 
Interest on SoCal Reserve
Norsk-Hydro
True-up
Gain on Sale - Asia Pacific
Total
Reported Earnings
                                             
 
SEGMENT EARNINGS BEFORE INTEREST AND TAXES FROM CONTINUING OPERATIONS
                                             
                                             
Franchised Electric  
$335 
$3 
$- 
$- 
 
$- 
 
$- 
$- 
$- 
$3 
$338 
   
 
 
Gas Transmission  
302 
 
 
311 
   
 
 
Field Services  
94 
D
 
 
95 
   
 
 
Duke Energy North America  
(28)
(10)
(3)
108 
C,D
 
(105)
D
(10)
(38)
 
   
 
 
International Energy  
68 
 
 
68 
   
 
 
Crescent  
87 
 
 
87 
   
 
 
 
   
   
 
 
 
 
Total reportable segment EBIT  
858 
(3)
109 
 
(105)
 
861 
   
 
 
Other  
(40)
(7)
21 
 
 
14 
(26)
   
 
 
 
   
   
 
 
 
 
Total reportable segment EBIT and other EBIT  
$818 
$(5)
$(3)
$130 
 
$(105)
 
$- 
$- 
$- 
$17 
$835 
   
 
 
 
   
   
 
 
 
 
   
 
 
   
 
 
   
 
 
EARNINGS FOR COMMON  
 
 
   
 
 
 
Total reportable segment EBIT and other EBIT  
$818 
$(5)
$(3)
$130 
 
$(105)
 
$- 
$- 
$- 
$17 
$835 
Foreign Currency Translation Gains / (Losses)  
 
 
Interest Income  
30 
 
 
30 
Interest Expense  
(324)
 
 
(12)
(12)
(336)
Minority Interest - Interest Expense  
 
 
Income taxes on continuing operations  
(132)
(46)
 
37 
 
(2)
(134)
Discontinued operations, net of taxes  
(3)
 
 
(9)
38 
29 
26 
Trust Preferred/Preferred Dividends  
(3)
 
 
(3)
   
 
 
 
   
   
 
 
 
 
   
 
 
Total Earnings for Common  
$397 
$(3)
$(2)
$84 
 
$(68)
 
$(8)
$(9)
$38 
$32 
$429 
   
 
 
 
   
   
 
 
 
 
   
 
 
EARNINGS PER SHARE, BASIC  
$0.42 
$- 
$- 
$0.09 
 
$(0.07)
 
$(0.01)
$(0.01)
$0.04 
$0.04 
$0.46 
   
 
 
 
   
   
 
 
 
 
   
 
 
EARNINGS PER SHARE, DILUTED  
$0.42 
$(0.01)
$- 
$0.09 
 
$(0.07)
 
$(0.01)
$(0.01)
$0.04 
$0.03 
$0.45 
   
 
 
 
   
   
 
 
 
 
                                             

Note 1 -Amounts for special items are entered net of minority interest

A - Amount is net of $6 million of minority interest.
B - Charge related to Grays Harbor, recorded in Impairment and other charges on the Consolidated Statements of Operations.
C - Amount is net of $5 million of minority interest.
D - Recorded in Operation, maintenance and other on the Consolidated Statements of Operations.

Weighted Average Shares (reported and ongoing) - in millions                      
Basic   926  
                                   
Diluted   961  
                                   

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DUKE ENERGY CORPORATION
ONGOING TO REPORTED EARNINGS RECONCILIATION
June 2005 Quarter-to-date
(Dollars in Millions)
   
Special Items (Note 1)
 
   
 
               
 
Ongoing Earnings
Field Services hedge de-designation, net
MTM change on de-designated Field Services hedges for 2005, net
Total
Reported Earnings
 

 
 

SEGMENT EARNINGS BEFORE INTEREST AND TAXES FROM CONTINUING OPERATIONS
 
Franchised Electric
$274 
$- 
$- 
$- 
$274 
 
Gas Transmission
302 
302 
 
Field Services
144 
22 
22 
166 
 
Duke Energy North America
(56)
(56)
 
International Energy
86 
86 
 
Crescent
39 
39 
 

 

 

 

 

 
Total reportable segment EBIT
789 
22 
22 
811 
               
Other
(95)
(88)
 

 

 

 

 

 
Total reportable segment EBIT and other EBIT
$694
$22
$7
$29
$723
 

 

 

 

 

 
 
EARNINGS FOR COMMON
 
Total reportable segment EBIT and other EBIT
$694
$22
$7
$29
$723
Foreign Currency Translation Gains / (Losses)
Interest Income
22 
22 
Interest Expense
(297)
(297)
Minority Interest - Interest Expense
10 
10 
Income taxes on continuing operations
(141)
(8)
(2)
(10)
(151)
Discontinued operations, net of taxes
(2)
(2)
Trust Preferred/Preferred Dividends
(2)
(2)
 

 

 

 

 

 
Total Earnings for Common
$288 
$14 
$5 
$19 
$307 
 

 

 

 

 

 
EARNINGS PER SHARE, BASIC
$0.31 
$0.02 
$- 
$0.02 
$0.33 
 

 

 

 

 

 
EARNINGS PER SHARE, DILUTED
$0.30 
$0.02 
$- 
$0.02 
$0.32 
 

 
 

Note 1 - Amounts for special items are entered net of minority interest

A- Second quarter settlements of the 2005 portion of the Field Services de-designated hedges as of 2/22/05, recorded in Non-regulated electric, natural gas liquids and other on the Consolidated Statements of Operations
B - Recorded in Non-regulated electric, natural gas liquids and other on the Consolidated Statements of Operations


Weighted Average Shares (reported and ongoing) - in millions
Basic 927
Diluted 964

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DUKE ENERGY CORPORATION
ONGOING TO REPORTED EARNINGS RECONCILIATION
June 2004 Year-to-date
(Dollars in Millions)
   
Special Items (Note 1)
 
   
 
 
Ongoing Earnings
Gain (Loss) on Sale
of Assets
Impairment
Enron Settlement
 
California Settlement
 
Interest on SoCal Reserve
Norsk-Hydro
True-up
Gain on Sale - Asia Pacific
Total
Reported Earnings



 
 
 
 




SEGMENT EARNINGS BEFORE INTEREST AND TAXES FROM CONTINUING OPERATIONS
 
 
 
Franchised Electric
$759 
$3 
$- 
$- 
 
$- 
 
$- 
$- 
$- 
$3 
$762 
 
 
 
Gas Transmission
700 
 
 
709 
 
 
 
Field Services
185 
D
 
186 
 
 
 
Duke Energy North America
(226)
(369)
(3)
108 
C,D
(105)
D
(369)
(595)
 
 
 
International Energy
110 
(13)
 
 
(13)
97 
 
 
 
Crescent
147 
 
 
147 
 




 

 





Total reportable segment EBIT
1,675 
(357) 
(16)
109 
 
(105)
 
(369)
1,306 
 
 
 
Other
(59)
21 
D
 
28 
(31)
 




 

 





Total reportable segment EBIT and other EBIT
$1,616 
$(350)
$(16)
$130 
 
$(105)
 
$- 
$- 
$- 
$(341)
$1,275 
 

 

 

 

 
 

 
 

 

 

 

 

 
 
 
 
EARNINGS FOR COMMON
 
 
 
 
 
Total reportable segment EBIT and other EBIT
$1,616 
$(350)
$(16)
$130 
 
$(105)
 
$- 
$- 
$- 
$(341)
$1,275 
Foreign Currency Translation Gains / (Losses)
(2)
 
 
(2)
Interest Income
37 
 
 
37 
Interest Expense
(680)
 
 
(12)
(12)
(692)
Minority Interest - Interest Expense
20 
 
 
20 
Income taxes on continuing operations
(289)
122 
(46)
 
37 
 
122 
(167)
Discontinued operations, net of taxes
 
 
(9)
276 
267 
272 
Trust Preferred/Preferred Dividends
(5)
 
 
(5)
 

 

 

 

 
 

 
 

 

 

 

 

 
Total Earnings for Common
$702 
$(228)
$(11)
$84 
 
$(68)
 
$(8)
$(9)
$276 
$36 
$738 
 

 

 
 

 

 
 

 
 

 

 

 

 

 
EARNINGS PER SHARE, BASIC
$0.76 
$(0.25)
$(0.01)
$0.09 
 
$(0.07)
 
$(0.01)
$(0.01)
$0.30 
$0.04 
$0.80 
 

 

 
 

 

 
 

 
 

 

 

 

 

 
EARNINGS PER SHARE, DILUTED
$0.74 
$(0.24)
$(0.01)
$0.09 
 
$(0.07)
 
$(0.01)
$(0.01)
$0.29 
$0.04 
$0.78 
 

 

 
 

 

 
 

 
 

 

 

 

 

 

Note 1 - Amounts for special items are entered net of minority interest

A - Approximately $(360) million related to loss on sale of the Southeast assets and approximately $(9) million related to losses on liquidation of DETM contracts (net of $5 million of minority interest). $(363) million recorded in Gains (Losses) on Sales of Other Assets, net (net of $5 million of minority interest) and $(6) million recorded in Operation, maintenance and other on the Consolidated Statements of Operations.
B - Charge related to Grays Harbor, recorded in Impairment and other charges on the Consolidated Statements of Operations.
C - Amount is net of $5 million of minority interest.
D - Recorded in Operation, maintenance and other on the Consolidated Statements of Operations.
E - Charge related to Cantarell, recorded in Operation, maintenance and other on the Consolidated Statements of Operations.
F - Includes $13 million related to the sale of Caribbean Nitrogen Co.


Weighted Average Shares (reported and ongoing) - in millions
Basic 919
Diluted 954

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DUKE ENERGY CORPORATION
ONGOING TO REPORTED EARNINGS RECONCILIATION
June 2005 Year-to-date
(Dollars in Millions)
 
Ongoing Earnings
Gain on sale of Grays Harbor
 
Mutual insurance liability adjustment
 
Gains on sales of equity investments
 
Field Services hedge de-designation, net
 
MTM change on de-designated Field Services hedges for 2005, net
 
Total
Reported Earnings
 
SEGMENT EARNINGS BEFORE INTEREST AND TAXES FROM CONTINUING OPERATIONS
Franchised Electric $610  $-    $-    $-    $-    $-    $-  $610 
                           
Gas Transmission 709            709 
                           
Field Services 295      888  A (96) B   792  1,087 
                           
Duke Energy North America (112) 21  C         21  (91)
                           
International Energy 154            154 
                           
Crescent 91            91 
 
Total reportable segment EBIT 1,747  21      888    (96)     813  2,560 
                           
Other (182)   (28) D     (47) E (75) (257)
 
Total reportable segment EBIT and other EBIT $1,565 $21   $(28)   $888   $(96)   $(47)   $738 $2,303
 
                           
EARNINGS FOR COMMON                          
                           
Total reportable segment EBIT and other EBIT $1,565 $21   $(28)   $888   $(96)   $(47)   $738 $2,303
Foreign Currency Translation Gains / (Losses)          
Interest Income 37            37 
Interest Expense (590)           (590)
Minority Interest - Interest Expense 23            23 
Income taxes on continuing operations (323) (8)   10    (329)   36    16    (275) (598)
Discontinued operations, net of taxes (1)           (1)
Trust Preferred/Preferred Dividends (4)           (4)
 
Total Earnings for Common $710  $13    $(18)   $559    $(60)   $(31)   $463  $1,173 
 
EARNINGS PER SHARE, BASIC $0.75 $0.01   $(0.02)   $0.59   $(0.05)   $(0.03)   $0.50 $1.25
 
EARNINGS PER SHARE, DILUTED $0.73 $0.01   $(0.02)   $0.57   $(0.06)   $(0.03)   $0.47 $1.20
 

Note 1 - Amounts for special items are entered net of minority interest

A - Gain on sale of investment in units of TEPPCO LP, $97 million, and TEPPCO GP, $791 million net of $343 million of minority interest
B - De-designation of hedges due to the anticipated transfer of a 19.7% interest in DEFS to ConocoPhillips. $125 million loss recorded in Impairment and other charges on the Consolidated Statements of Operations,reduced by $29 million of hedge settlements recorded in Non-regulated electric, natural gas liquids and other on the Consolidated Statements of Operations
C - Recorded in Gains (Losses) on Sales of Other Assets, net on the Consolidated Statements of Operations
D - Recorded in Operation, maintenance and other on the Consolidated Statements of Operations
E - Recorded in Non-regulated electric, natural gas liquids and other on the Consolidated Statements of Operations


Weighted Average Shares (reported and ongoing) - in millions
Basic 941
Diluted 977

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Special items for the first quarter (as summarized in this earnings release) include:

($ in Millions)
Pre-Tax Amount
Tax Effect
2005 EPS Impact
2004 EPS Impact
First quarter 2005
Gain on sale of TEPPCO GP, net of minority interest of $343 million
$791 
($293)
$0.52 
--
Gain on sale of TEPPCO L.P. units
97 
(36)
0.07 
--
Loss on de-designation of Field Servicesí hedges as a result of the announced transaction with ConocoPhillips
(118)
44 
(0.08)
--
Mark-to-market losses on de-designated 2005 Field Servicesí hedges
(54)
19 
(0.03)
--
Additional liabilities related to mutual insurance companies
(28)
10 
(0.02)
--
Gain on sale of Grays Harbor
21 
(8)
0.01 
--
First quarter 2004
Gain on sale of the Asia Pacific Business
$256 
($18)
--
$0.26 
Net loss on sale of DENA assets, primarily anticipated sale of southeast U.S. plants
(359)
126 
--
(0.26)
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)
 
Total basic EPS impact
$0.47
--