- 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., Aug. 3 /PRNewswire-FirstCall/ -- Duke Energy (NYSE: DUK)
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.
(Logo: http://www.newscom.com/cgi-bin/prnh/20040414/DUKEENERGYLOGO)
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 $39 million
less than the previous year's quarter.
Special items impacting basic EPS for the quarter include:
2005 2004
Pre-Tax Tax EPS EPS
($ in Millions) Amount Effect Impact Impact
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 7 (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) 3 -- --
- Interest related to litigation
reserve (12) 4 -- (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:
http://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: 704/382-8333
ANALYST CONTACT: Julie Dill
Phone: 980/373-4332
Investor Relations: 800/488-3853
JUNE 2005
QUARTERLY HIGHLIGHTS
(Unaudited)
Three Months Ended Six Months Ended
June 30, 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 2 3 4 5
------- ------- ------- -------
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 2 5 5 14
International Energy 8 7 12 15
Crescent (b) 191 122 331 284
Other 7 6 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.
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 - 3 1 3
Other (Expense) Income, net (1) 3 - 7
------- ------- ------- -------
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 2 9 4 9
Other Income, net of expenses 14 13 28 19
Minority Interest Expense 6 2 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 - - 2 -
Other Income, net of expenses 7 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 3 - 4 (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 3 3 5 6
------- ------- ------- -------
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 5 1 8 2
------- ------- ------- -------
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) - 7
Other Income, net of expenses 4 2 5 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/.
DUKE ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In millions, except per-share amounts)
Three Months Ended Six Months Ended
June 30, 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 2 3 4 5
---------- ------- -------- --------
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
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
======== ========
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 1 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.
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 4
Other income (expense), net 3
Gain (loss) on sales of other assets, net (1)
-----
DENA Segment EBIT $(56)
=====
Owned Assets - Contracted Level
-------------------------------
Remaining 2005 2006
------------------------- -----------------------------
Millions % Contracted Millions % Contracted
MWs MWh ------------ MWh ------------
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.
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.
Duke Energy Corporation
Quarterly Highlights
Supplemental Franchised Electric Information
June 30, 2005
Quarter Ended
June 30,
--------------------------------
%
2005 2004 Inc.(Dec.)
---------- ---------- ----------
GWH Sales
Residential 5,118 5,631 (9.1%)
General Service 5,983 6,253 (4.3%)
Industrial - Textile 1,680 1,850 (9.2%)
Industrial - Other 4,649 4,557 2.0%
---------- ---------- ----------
Total Industrial 6,329 6,407 (1.2%)
Other Energy Sales 67 66 1.5%
Regular Resale 323 342 (5.6%)
---------- ---------- ----------
Total Regular Sales Billed 17,820 18,699 (4.7%)
Special Sales (A) 1,959 913 114.6%
---------- ---------- ----------
Total Electric Sales 19,779 19,612 0.9%
Unbilled Revenue 372 195 90.8%
---------- ---------- ----------
Total Duke Power Electric Sales 20,151 19,807 1.7%
Nantahala Electric Sales 280 280 -
---------- ---------- ----------
Total DP Consolidated Electric Sales 20,431 20,087 1.7%
========== ========== ==========
Average Number of Customers
Residential 1,833,189 1,799,504 1.9%
General Service 310,115 304,220 1.9%
Industrial - Textile 805 857 (6.1%)
Industrial - Other 6,656 6,658 -
---------- ---------- ----------
Total Industrial 7,461 7,515 (0.7%)
Other Energy Sales 13,095 11,921 9.8%
Regular Resale 15 15 -
---------- ---------- ----------
Total Regular Sales 2,163,875 2,123,175 1.9%
Special Sales (A) 30 34 (11.8%)
---------- ---------- ----------
Total Duke Power Electric Sales 2,163,905 2,123,209 1.9%
Nantahala Electric Sales 68,145 66,854 1.9%
---------- ---------- ----------
Total DP Average Number of
Customers 2,232,050 2,190,063 1.9%
========== ========== ==========
(A) Excludes sales to Nantahala Power and Light Company
Heating and Cooling Degree Days
Actual
Heating Degree Days 262 213 23.0%
Cooling Degree Days 351 562 (37.5%)
Variance from Normal
Heating Degree Days 17.1% (7.3%) n/a
Cooling Degree Days (23.8%) 23.4% n/a
Duke Energy Corporation
Quarterly Highlights
Supplemental Franchised Electric Information
June 30, 2005
Year To Date
June 30,
--------------------------------
%
2005 2004 Inc.(Dec.)
---------- ---------- ----------
GWH Sales
Residential 12,042 12,662 (4.9%)
General Service 11,870 12,050 (1.5%)
Industrial - Textile 3,255 3,465 (6.1%)
Industrial - Other 9,019 8,554 5.4%
---------- ---------- ----------
Total Industrial 12,274 12,019 2.1%
Other Energy Sales 134 132 1.5%
Regular Resale 666 694 (4.0%)
---------- ---------- ----------
Total Regular Sales Billed 36,986 37,557 (1.5%)
Special Sales (A) 4,150 3,936 5.4%
---------- ---------- ----------
Total Electric Sales 41,136 41,493 (0.9%)
Unbilled Revenue (173) (56) (208.9%)
---------- ---------- ----------
Total Duke Power Electric
Sales 40,963 41,437 (1.1%)
Nantahala Electric Sales 631 613 2.9%
---------- ---------- ----------
Total DP Consolidated
Electric Sales 41,594 42,050 (1.1%)
========== ========== ==========
Average Number of Customers
Residential 1,831,498 1,797,080 1.9%
General Service 309,116 303,047 2.0%
Industrial - Textile 811 866 (6.4%)
Industrial - Other 6,667 6,676 (0.1%)
---------- ---------- ----------
Total Industrial 7,478 7,542 (0.8%)
Other Energy Sales 13,136 11,692 12.4%
Regular Resale 15 15 -
---------- ---------- ----------
Total Regular Sales 2,161,243 2,119,376 2.0%
Special Sales (A) 34 38 (10.5%)
---------- ---------- ----------
Total Duke Power Electric
Sales 2,161,277 2,119,414 2.0%
Nantahala Electric Sales 67,876 66,549 2.0%
---------- ---------- ----------
Total DP Average Number of
Customers 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 1,975 2,085 (5.3%)
Cooling Degree Days 351 569 (38.3%)
Variance from Normal
Heating Degree Days 2.5% 9.8% n/a
Cooling Degree Days (24.3%) 24.0% n/a
DUKE ENERGY CORPORATION
ONGOING TO REPORTED EARNINGS RECONCILIATION
June 2004 Quarter-to-date
(Dollars in Millions)
Special Items (Note 1)
------------------------
Gain (Loss)
Ongoing on Sale Enron California
Earnings of Assets Impairment Settlement Settlement
-------- ----------- ---------- ---------- ----------
SEGMENT EARNINGS
BEFORE INTEREST
AND TAXES FROM
CONTINUING OPERATIONS
Franchised Electric $335 $3 $- $- $-
Gas Transmission 302 9 - - -
Field Services 94 - - 1 D -
Duke Energy North
America (28) (10) A (3) B 108 C,D (105)D
International Energy 68 - - - -
Crescent 87 - - - -
-------- ----------- ---------- ---------- ----------
Total reportable
segment EBIT 858 2 (3) 109 (105)
Other (40) (7) - 21 D -
-------- ----------- ---------- ---------- ----------
Total reportable
segment EBIT
and other EBIT $818 $(5) $(3) $130 $(105)
======== =========== ========== ========== ==========
EARNINGS FOR COMMON
Total reportable segment
EBIT and other EBIT $818 $(5) $(3) $130 $(105)
Foreign Currency
Translation Gains/
(Losses) 2 - - - -
Interest Income 30 - - - -
Interest Expense (324) - - - -
Minority Interest
- Interest Expense 9 - - - -
Income taxes on
continuing operations (132) 2 1 (46) 37
Discontinued operations,
net of taxes (3) - - - -
Trust Preferred/
Preferred Dividends (3) - - - -
-------- ----------- ---------- ---------- ----------
Total Earnings for
Common $397 $(3) $(2) $84 $(68)
======== =========== ========== ========== ==========
EARNINGS PER SHARE,
BASIC $0.42 $- $- $0.09 $(0.07)
======== =========== ========== ========== ==========
EARNINGS PER SHARE,
DILUTED $0.42 $(0.01) $- $0.09 $(0.07)
======== =========== ========== ========== ==========
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
DUKE ENERGY CORPORATION
ONGOING TO REPORTED EARNINGS RECONCILIATION
June 2004 Quarter-to-date
(Dollars in Millions)
Special Items (Note 1)
------------------------
Gain on
Interest Norsk- Sale -
on SoCal Hydro Asia Reported
Reserve True-up Pacific Total Earnings
-------- ------- ------- ----- --------
SEGMENT EARNINGS BEFORE INTEREST
AND TAXES FROM CONTINUING OPERATIONS
Franchised Electric $- $- $- $3 $338
Gas Transmission - - - 9 311
Field Services - - - 1 95
Duke Energy North America - - - (10) (38)
International Energy - - - - 68
Crescent - - - - 87
-------- ------- ------- ----- --------
Total reportable segment EBIT - - - 3 861
Other - - - 14 (26)
-------- ------- ------- ----- --------
Total reportable segment EBIT
and other EBIT $- $- $- $17 $835
======== ======= ======= ===== ========
EARNINGS FOR COMMON
Total reportable segment EBIT and
other EBIT $- $- $- $17 $835
Foreign Currency Translation Gains/
(Losses) - - - - 2
Interest Income - - - - 30
Interest Expense (12) - - (12) (336)
Minority Interest - Interest Expense - - - - 9
Income taxes on continuing operations 4 - - (2) (134)
Discontinued operations, net of taxes - (9) 38 29 26
Trust Preferred/Preferred Dividends - - - - (3)
-------- ------- ------- ----- --------
Total Earnings for Common $(8) $(9) $38 $32 $429
======== ======= ======= ===== ========
EARNINGS PER SHARE, BASIC $(0.01) $(0.01) $0.04 $0.04 $0.46
======== ======= ======= ===== ========
EARNINGS PER SHARE, DILUTED $(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
DUKE ENERGY CORPORATION
ONGOING TO REPORTED EARNINGS RECONCILIATION
June 2005 Quarter-to-date
(Dollars in Millions)
Special Items (Note 1)
------------------------
MTM
change on
Field de-designated
Services Field
hedge de- Services
Ongoing designation, hedges for Reported
Earnings net 2005, net Total Earnings
-------- ----------- ------------- ----- --------
SEGMENT EARNINGS BEFORE
INTEREST AND TAXES FROM
CONTINUING OPERATIONS
Franchised Electric $274 $- $- $- $274
Gas Transmission 302 - - - 302
Field Services 144 22 A - 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) - 7 B 7 (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) 4 - - - 4
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
DUKE ENERGY CORPORATION
ONGOING TO REPORTED EARNINGS RECONCILIATION
June 2004 Year-to-date
(Dollars in Millions)
Special Items (Note 1)
------------------------
Gain (Loss)
Ongoing on Sale Enron
Earnings of Assets Impairment Settlement
-------- ----------- ----------- ----------
SEGMENT EARNINGS
BEFORE INTEREST
AND TAXES FROM
CONTINUING OPERATIONS
Franchised Electric $759 $3 $- $-
Gas Transmission 700 9 - -
Field Services 185 - - 1 D
Duke Energy North
America (226) (369) A (3) B 108 C,D
International Energy 110 - (13) E -
Crescent 147 - - -
-------- ----------- ----------- ----------
Total reportable
segment EBIT 1,675 (357) (16) 109
Other (59) 7 F - 21 D
-------- ----------- ----------- ----------
Total reportable
segment EBIT
and other EBIT $1,616 $(350) $(16) $130
======== =========== =========== ==========
EARNINGS FOR COMMON
Total reportable
segment EBIT
and other EBIT $1,616 $(350) $(16) $130
Foreign Currency
Translation
Gains/(Losses) (2) - - -
Interest Income 37 - - -
Interest Expense (680) - - -
Minority Interest
- Interest Expense 20 - - -
Income taxes on
continuing operations (289) 122 5 (46)
Discontinued operations,
net of taxes 5 - - -
Trust Preferred/
Preferred Dividends (5) - - -
-------- ----------- ----------- ----------
Total Earnings for
Common $702 $(228) $(11) $84
======== =========== =========== ==========
EARNINGS PER SHARE,
BASIC $0.76 $(0.25) $(0.01) $0.09
======== =========== =========== ==========
EARNINGS PER SHARE,
DILUTED $0.74 $(0.24) $(0.01) $0.09
======== =========== =========== ==========
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
DUKE ENERGY CORPORATION
ONGOING TO REPORTED EARNINGS RECONCILIATION
June 2004 Year-to-date
(Dollars in Millions)
Special Items (Note 1)
------------------------
Gain on
Interest Norsk- Sale -
California on SoCal Hydro Asia Reported
Settlement Reserve True-up Pacific Total Earnings
---------- -------- ------- ------- ----- --------
SEGMENT EARNINGS
BEFORE INTEREST
AND TAXES FROM
CONTINUING OPERATIONS
Franchised Electric $- $- $- $- $3 $762
Gas Transmission - - - - 9 709
Field Services - - - - 1 186
Duke Energy North America (105) D - - - (369) (595)
International Energy - - - - (13) 97
Crescent - - - - - 147
---------- -------- ------- ------- ----- --------
Total reportable
segment EBIT (105) - - - (369) 1,306
Other - - - - 28 (31)
---------- -------- ------- ------- ----- --------
Total reportable
segment EBIT
and other EBIT $(105) $- $- $- $(341) $1,275
========== ======== ======= ======= ===== ========
EARNINGS FOR COMMON
Total reportable segment
EBIT and other EBIT $(105) $- $- $- $(341) $1,275
Foreign Currency
Translation Gains/
(Losses) - - - - - (2)
Interest Income - - - - - 37
Interest Expense - (12) - - (12) (692)
Minority Interest
- Interest Expense - - - - - 20
Income taxes on
continuing operations 37 4 - - 122 (167)
Discontinued operations,
net of taxes - - (9) 276 267 272
Trust Preferred/
Preferred Dividends - - - - - (5)
---------- -------- ------- ------- ----- --------
Total Earnings for
Common $(68) $(8) $(9) $276 $36 $738
========== ======== ======= ======= ===== ========
EARNINGS PER SHARE,
BASIC $(0.07) $(0.01) $(0.01) $0.30 $0.04 $0.80
========== ======== ======= ======= ===== ========
EARNINGS PER SHARE,
DILUTED $(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
DUKE ENERGY CORPORATION
ONGOING TO REPORTED EARNINGS RECONCILIATION
June 2005 Year-to-date
(Dollars in Millions)
Special Items (Note 1)
------------------------
Gain on Mutual Gains
sale of insurance on sales
Ongoing Grays liability of equity
Earnings Harbor adjustment investments
-------- ------- ---------- -----------
SEGMENT EARNINGS BEFORE
INTEREST AND TAXES
FROM CONTINUING OPERATIONS
Franchised Electric $610 $- $- $-
Gas Transmission 709 - - -
Field Services 295 - - 888 A
Duke Energy North America (112) 21 C - -
International Energy 154 - - -
Crescent 91 - - -
-------- ------- ---------- -----------
Total reportable segment EBIT 1,747 21 - 888
Other (182) - (28) D -
-------- ------- ---------- -----------
Total reportable segment
EBIT and other EBIT $1,565 $21 $(28) $888
======== ======= ========== ===========
EARNINGS FOR COMMON
Total reportable segment EBIT
and other EBIT $1,565 $21 $(28) $888
Foreign Currency Translation Gains/
(Losses) 3 - - -
Interest Income 37 - - -
Interest Expense (590) - - -
Minority Interest - Interest Expense 23 - - -
Income taxes on continuing operations (323) (8) 10 (329)
Discontinued operations, net of taxes (1) - - -
Trust Preferred/Preferred Dividends (4) - - -
-------- ------- ---------- -----------
Total Earnings for Common $710 $13 $(18) $559
======== ======= ========== ===========
EARNINGS PER SHARE, BASIC $0.75 $0.01 $(0.02) $0.59
======== ======= ========== ===========
EARNINGS PER SHARE, DILUTED $0.73 $0.01 $(0.02) $0.57
======== ======= ========== ===========
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
DUKE ENERGY CORPORATION
ONGOING TO REPORTED EARNINGS RECONCILIATION
June 2005 Year-to-date
(Dollars in Millions)
Special Items (Note 1)
------------------------
MTM
change on
Field de-designated
Services Field
hedge de- Services
designation, hedges for Reported
net 2005, net Total Earnings
----------- ------------- ----- --------
SEGMENT EARNINGS BEFORE
INTEREST AND TAXES
FROM CONTINUING OPERATIONS
Franchised Electric $- $- $- $610
Gas Transmission - - - 709
Field Services (96) B - 792 1,087
Duke Energy North America - - 21 (91)
International Energy - - - 154
Crescent - - - 91
----------- ------------- ----- --------
Total reportable segment EBIT (96) - 813 2,560
Other - (47) E (75) (257)
----------- ------------- ----- --------
Total reportable segment EBIT
and other EBIT $(96) $(47) $738 $2,303
=========== ============= ===== ========
EARNINGS FOR COMMON
Total reportable segment EBIT and
other EBIT $(96) $(47) $738 $2,303
Foreign Currency Translation Gains/
(Losses) - - - 3
Interest Income - - - 37
Interest Expense - - - (590)
Minority Interest - Interest Expense - - - 23
Income taxes on continuing operations 36 16 (275) (598)
Discontinued operations, net of taxes - - - (1)
Trust Preferred/Preferred Dividends - - - (4)
----------- ------------- ----- --------
Total Earnings for Common $(60) $(31) $463 $1,173
=========== ============= ===== ========
EARNINGS PER SHARE, BASIC $(0.05) $(0.03) $0.50 $1.25
=========== ============= ===== ========
EARNINGS PER SHARE, DILUTED $(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 $29 million of hedge settlements recorded in
Non-regulated electric, natural gas liquids and other on the
Consolidated Statements of Operations
C - Recorded in Gains (Losses) on Sales of Other Assets, net on the
Consolidated Statements of Operations
D - Recorded in Operation, maintenance and other on the Consolidated
Statements of Operations
E - Recorded in Non-regulated electric, natural gas liquids and other on
the Consolidated Statements of Operations
Weighted Average Shares (reported and ongoing) - in millions
Basic 941
Diluted 977
Special items for the first quarter (as summarized in this earnings
release) include:
Pre-Tax Tax 2005 EPS 2004 EPS
($ in Millions) Amount Effect Impact 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
Services' hedges as a result of the
announced transaction with
ConocoPhillips (118) 44 (0.08) --
Mark-to-market losses on de-
designated 2005 Field Services'
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) 5 -- (0.01)
Total basic EPS impact $0.47 --
SOURCE Duke Energy
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