* Third quarter ongoing basic earnings per share of 59 cents versus
37 cents in prior year's quarter
* Reported basic earnings per share, which reflect charges associated
with the decision to exit DENA, of 4 cents in third quarter 2005 versus
41 cents in previous year
* Company confident of exceeding $1.65 employee incentive target - based
on annual ongoing basic EPS
* Weather, commodity prices and real estate operations help ongoing
results
CHARLOTTE, N.C., Nov. 2 /PRNewswire-FirstCall/ -- Duke Energy (NYSE: DUK)
today reported third quarter 2005 basic earnings per share (EPS) of $0.04, or
$41 million in net income, compared to $0.41 per share in third quarter 2004,
or $389 million in net income. This quarter's results include charges related
to the previously announced plan to exit substantially all of Duke Energy
North America's (DENA) business outside of the Midwest, which totaled $0.84
per share. This amount was partially offset by a gain on the transfer of a
19.7 percent interest of Duke Energy Field Services to ConocoPhillips, which
totaled $0.39 per share.
(Logo: http://www.newscom.com/cgi-bin/prnh/20040414/DUKEENERGYLOGO)
Third quarter 2005 basic EPS from continuing operations was $0.99, or
$924 million in income, compared to $0.40 per share in third quarter 2004, or
$381 million in income. On a diluted basis, third quarter 2005 EPS from
continuing operations was $0.96 per share, compared to $0.39 in the third
quarter 2004.
Ongoing basic EPS for third quarter 2005 was $0.59 versus $0.37 in third
quarter 2004. On a diluted basis, ongoing EPS for third quarter 2005 was $0.56
compared to $0.36 in third quarter 2004.
"The quality of our assets, along with the focused efforts of our
employees, delivered outstanding results despite the external events affecting
the energy industry. Not only did we perform for our customers during this
period of supply disruptions, we delivered solid results for our investors,"
said Paul Anderson, Duke Energy's chairman of the board and chief executive
officer.
"Our strategic decision to exit much of our merchant generation business
in DENA had a large earnings impact this quarter. But that move, along with
our proposed merger with Cinergy, will position us for stronger long-term
results going forward," he added.
Anderson said the company expects to exceed its employee incentive goal of
$1.65 per share - based on annual ongoing basic earnings. That figure was
recently revised upward from $1.60 to reflect the exit of the DENA business.
Special items for the quarter include:
Pre-Tax Tax 2005 EPS 2004 EPS
($ in Millions) Amount Effect Impact Impact
Third quarter 2005
* Gain on transfer of
19.7 percent interest in
DEFS to ConocoPhillips $576 ($213) $0.39
* Impairment of DEI's investment
in Campeche ($20) $6 ($0.02)
* Settlement of positions on
2005 Field Services' hedges
that were de-designated $38 ($15) $0.02
* Mark-to-market loss on
de-designated 2005 Field
Services' hedges ($17) $6 ($0.01)
* Initial and subsequent
mark-to-market gain on
de-designating Southeast
DENA hedges $30 ($11) $0.02
Third quarter 2004
* Tax benefit from restructuring -- $48 $0.05
* Asset impairments, net gains
on asset sales and write down
of equity investments (net of
minority interest of
$19 million) ($21) $8 ($0.02)
Total basic EPS impact $0.40 $0.03
Basic EPS, as reported $0.04 $0.41
Discontinued operations,
excluding Crescent Resources ($0.95) $0.01
Basic EPS from continuing
operations, as reported $0.99 $0.40
Total basic EPS impact of
special items $0.40 $0.03
Basic EPS, ongoing $0.59 $0.37
Special items EPS year-to-date impact:
2005 2004
First quarter $0.45 ($0.25)
Second quarter $0.02 $0.01
Third quarter $0.40 $0.03
Impact of change in shares outstanding
and rounding $0.01 $0.01
Total EPS Impact $0.88 ($0.20)
2005 EPS 2004 EPS
Impact Impact
Year-to-date basic EPS, as reported $1.29 $1.22
Discontinued operations, excluding
Crescent Resources ($0.96) $0.20
Basic EPS from continuing operations,
as reported $2.25 $1.02
Total basic EPS impact of special items $0.88 ($0.20)
Year-to-date basic EPS, ongoing $1.37 $1.22
BUSINESS UNIT RESULTS
Franchised Electric
Third quarter 2005 segment EBIT from continuing operations for Franchised
Electric was $606 million, compared to $453 million in the prior year's
quarter. The increase was driven primarily by warmer weather, which pushed
residential sales up 12.4 percent, and strong bulk power marketing (BPM)
results.
Also, Franchised Electric recorded approximately $25 million less
regulatory amortization this quarter than the prior year's quarter. These
increases to segment EBIT were partially offset by higher operating and
maintenance expenses, primarily related to nuclear outage and maintenance
costs.
Overall industrial kilowatt-hour sales were up 0.7 percent for the quarter
as textile plant closings were more than offset by increased usage in other
industries. Regional growth continued to add to Franchised Electric's total
customer base, with 43,000 customers -- about 2 percent -- over the prior
year.
Year-to-date segment EBIT from continuing operations for Franchised
Electric was $1.22 billion in both 2005 and 2004.
Natural Gas Transmission
Duke Energy Gas Transmission (DEGT) reported third quarter 2005 segment
EBIT from continuing operations of $329 million compared to $269 million in
the prior year's quarter. The increase was driven by improved U.S. operations,
domestic business expansion projects and higher earnings by natural gas
distribution operations in eastern Canada. In addition, earnings benefited
from operations in Canada that were purchased or transferred to DEGT in the
third quarter.
DEGT's third quarter earnings continued to benefit from the stronger
Canadian currency over comparable periods. This was mainly offset by a gain of
a prior year asset sale. 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 $1.04 billion, compared with $986 million in 2004.
Field Services
The Field Services business segment, which in the quarter represented
Duke Energy's 50-percent interest in Duke Energy Field Services (DEFS),
reported third quarter 2005 equity earnings of $126 million -- in addition to
a one-time gain on the transfer of a 19.7 percent interest in DEFS of
$576 million -- compared to $63 million in EBIT in third quarter 2004.
The equity earnings amount for the third quarter 2005 includes deductions
primarily for interest totaling $15 million, which were not included in the
prior quarter's EBIT. The equity earnings amount for third quarter 2005 does
not include the negative impact of hedge settlements during the quarter, which
are now reported in Other and were reported in third quarter 2004 Field
Services' EBIT.
Results were driven by strong commodity prices, operational improvements
and the absence of a $26 million impairment charge reported in the prior
year's quarter. These were partly offset by higher operating costs from
pipeline integrity work and lower volumes due to hurricane interruptions.
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. DEFS is now a 50/50 joint venture between Duke Energy and
ConocoPhillips.
Duke Energy North America
As a result of the decision to exit substantially all of the Duke Energy
North America (DENA) business outside of the Midwest, results for DENA's
continuing operations for 2005 is included in Other. Its discontinued results
are reported in Discontinued Operations.
International Energy
For third quarter 2005, Duke Energy International (DEI) reported segment
EBIT from continuing operations of $63 million, compared to $64 million in
third quarter 2004.
The 2005 results include a $20 million impairment charge on DEI's
investment in the Campeche plant in Mexico. Excluding that item, results were
driven by favorable hydrology and pricing in Peru and Argentina, higher
commodity prices at National Methanol and favorable currency impacts in Brazil
- offset by higher expenses in Ecuador and Guatemala, and lower margins in
Brazil. 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
$217 million, compared with $161 million in 2004.
Crescent Resources
Crescent Resources reported third quarter 2005 segment EBIT from
continuing operations of $120 million, compared to $43 million in the previous
year's quarter.
The increase was driven by continued active management of Crescent's real
estate holdings, which this quarter included a gain on the sale of an interest
in a portfolio of office buildings, the sale of a legacy land tract in South
Carolina and increased residential lot sales. These were partially offset by a
$16 million impairment on a residential development in South Carolina.
Year-to-date EBIT from continuing operations for Crescent Resources was
$210 million, compared with $190 million in 2004.
Other
Other primarily includes the cost of corporate governance, Duke Energy's
captive insurance company, Bison Insurance Co. Limited, de-designated hedges
resulting from the decision to transfer a 19.7 percent interest in DEFS to
ConocoPhillips and DENA's continuing operations for 2005. Other reported an
EBIT loss from continuing operations of $175 million in third quarter 2005,
compared to a loss of $25 million in third quarter 2004. The additional losses
were due mainly to mark-to-market losses on 2005 and 2006 de-designated Field
Services' hedges, realized losses on the 2005 de-designated hedges due to
settlements in the quarter, timing of recognition of losses at Bison and
adjustments to the mutual insurance liability.
The reported losses were partially offset by a mark-to-market gain on de-
designated Southeast DENA hedges.
Year-to-date EBIT loss from continuing operations for Other was
$495 million, compared with a $56 million EBIT loss in 2004.
Discontinued Operations
Discontinued Operations showed a third quarter 2005 loss of $883 million,
compared to a gain of $8 million in third quarter 2004. This is primarily due
to the company's decision to exit DENA.
Year-to-date, Discontinued Operations posted a loss of $894 million,
compared with a gain of $183 million in 2004.
INTEREST EXPENSE
Interest expense was $228 million for third quarter 2005, compared to
$329 million for third quarter 2004. The decrease was primarily due to the
company's debt reduction efforts in 2004 and the transfer of Duke Energy's
19.7 percent interest in DEFS, which resulted in reporting Duke Energy's
proportionate share of DEFS' interest expense in equity earnings.
Year-to-date interest expense was $813 million, compared with interest
expense of $984 million in 2004.
INCOME TAX
Third quarter 2005 income tax expense from continuing operations was
$487 million, compared to $147 million in third quarter 2004. This increase
was primarily due to higher earnings during the quarter compared to last
year's quarter. The effective tax rate increased from 27.9 percent in the
third quarter 2004 to 34.5 percent in the third quarter 2005 primarily due to
benefits resulting from a change in effective state tax rates in the prior
year. The effective tax rate calculation includes equity earnings in pre-tax
income.
Year-to-date income tax expense from continuing operations was
$1.1 billion, compared to $365 million in 2004.
LIQUIDITY AND CAPITAL RESOURCES
Duke Energy's consolidated capital structure at the end of third quarter
2005, including short-term debt, was 49 percent debt, 49 percent common equity
and 2 percent minority interests. The company had approximately $1.44 billion
in cash, cash equivalents and short-term investments at the end of third
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 third 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), including any equity in earnings of unconsolidated affiliates,
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 from
continuing operations plus any discontinued operations from its Crescent
Resources real estate unit, 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 from continuing operations, 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 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 800/967-
7185 in the United States or 719/457-2634 outside the United States. The
confirmation code is 8492249. Please call in five to 10 minutes prior to the
scheduled start time. A replay of the conference call will be available until
Nov. 11, 2005, midnight ET, by dialing 888/203-1112 with a confirmation code
of 8492249. The international replay number is 719/457-0820, confirmation code
8492249. 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 and other natural phenomena on company operations, including the
economic, operational and other effects of hurricanes Katrina and Rita;
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; state, federal and foreign legislative and regulatory initiatives
that affect cost and investment recovery, have an impact on rate structures,
and affect the speed at and the degree to which competition enters the
electric and natural gas industries; the timing and extent of changes in
commodity prices, interest rates and foreign currency exchange rates;
competition and regulatory limitations affecting the success of Duke Energy's
divestiture plans, including the prices at which Duke Energy is able to sell
its assets; the ability to successfully complete merger, acquisitions or
divestiture plans (including the merger with Cinergy Corp.); regulatory or
other limitations imposed as a result of a merger, acquisition or divestiture;
and the success of the business following a merger, acquisition or
divestiture.
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
SEPTEMBER 2005
QUARTERLY HIGHLIGHTS
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ ------------------
(In millions, except where noted) 2005 2004 2005 2004
-------------------------------------------------------------------------
COMMON STOCK DATA
Earnings Per Share (from
continuing operations)
Basic $0.99 $0.40 $2.25 $1.02
Diluted $0.96 $0.39 $2.17 $0.99
(Loss) Earnings Per Share (from
discontinued operations)
Basic $(0.95) $0.01 $(0.96) $0.20
Diluted $(0.92) $0.01 $(0.92) $0.19
Earnings Per Share
Basic $0.04 $0.41 $1.29 $1.22
Diluted $0.04 $0.40 $1.25 $1.18
Dividends Per Share $- $- $0.860 $0.825
Weighted-Average Shares Outstanding
Basic 926 938 936 925
Diluted 964 973 973 960
-------------------------------------------------------------------------
INCOME
Operating Revenues $3,028 $5,081 $13,630 $15,007
Total Reportable Segment EBIT 1,819 865 4,471 2,281
Other EBIT (175) (25) (495) (56)
Interest Expense 228 329 813 984
Interest Income and Other (a) 5 (17) (44) (73)
Income Tax Expense from Continuing
Operations 487 147 1,095 365
(Loss) Income from Discontinued
Operations (883) 8 (894) 183
------- ------- ------- -------
Net Income 41 389 1,218 1,132
Dividends and Premiums on Redemption
of Preferred and Preference Stock 3 2 7 7
------- ------- ------- -------
Earnings Available for Common
Stockholders $38 $387 $1,211 $1,125
======= ======= ======= =======
-------------------------------------------------------------------------
CAPITALIZATION
Common Equity 49% 41%
Preferred Stock 0% 0%
------- -------
Total Common Equity and Preferred
Securities 49% 41%
Minority Interests 2% 4%
Total Debt 49% 55%
-------------------------------------------------------------------------
Total Debt $16,112 $20,653
Book Value Per Share $17.18 $16.30
Actual Shares Outstanding 926 938
-------------------------------------------------------------------------
CAPITAL AND INVESTMENT EXPENDITURES
Franchised Electric $335 $253 $913 $781
Natural Gas Transmission 478 131 716 387
Field Services - 31 86 163
Duke Energy North America (1) 5 4 19
International Energy 8 9 20 24
Crescent (b) 139 122 470 406
Other (1) - 9 24
------- ------- ------- -------
Total Capital and Investment
Expenditures $958 $551 $2,218 $1,804
======= ======= ======= =======
-------------------------------------------------------------------------
EBIT BY BUSINESS SEGMENT
Franchised Electric $606 $453 $1,216 $1,215
Natural Gas Transmission 329 269 1,044 986
Field Services 701 63 1,784 243
Duke Energy North America - (27) - (514)
International Energy 63 64 217 161
Crescent 120 43 210 190
------- ------- ------- -------
Total reportable segment EBIT 1,819 865 4,471 2,281
Other EBIT (175) (25) (495) (56)
Interest expense (228) (329) (813) (984)
Equity in earnings of
unconsolidated affiliates in
Segment EBIT (176) (33) (256) (110)
Interest Income and Other (a) (5) 17 44 73
------- ------- ------- -------
Consolidated earnings from continuing
operations before income taxes and
equity in earnings of unconsolidated
affiliates $1,235 $495 $2,951 $1,204
======= ======= ======= =======
-------------------------------------------------------------------------
(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 $67 million and $80 million for
the three months ended September 30, 2005 and 2004 respectively, and
$276 million and $218 million for the nine months ended September 30,
2005 and 2004, respectively.
Note: Certain prior period amounts have been reclassified due to
discontinued operations.
SEPTEMBER 2005
QUARTERLY HIGHLIGHTS
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
(In millions, except where noted) 2005 2004 2005 2004
--------------------------------------------------------------------------
FRANCHISED ELECTRIC
Operating Revenues $1,619 $1,419 $4,118 $3,918
Operating Expenses 1,026 967 2,916 2,714
Gains on Sales of Other Assets, net 1 - 2 3
Other Income, net of expenses 12 1 12 8
------- ------- ------- -------
EBIT $606 $453 $1,216 $1,215
------- ------- ------- -------
Sales, GWh 23,724 21,904 65,318 63,954
--------------------------------------------------------------------------
NATURAL GAS TRANSMISSION
Operating Revenues $869 $652 $2,824 $2,408
Operating Expenses 549 398 1,809 1,453
Gains on Sales of Other Assets, net - 3 4 12
Other Income, net of expenses 17 19 48 39
Minority Interest Expense 8 7 23 20
------- ------- ------- -------
EBIT $329 $269 $1,044 $986
------- ------- ------- -------
Proportional Throughput, TBtu 759 652 2,534 2,467
--------------------------------------------------------------------------
FIELD SERVICES (a)
Operating Revenues $- $2,490 $5,530 $7,154
Operating Expenses - 2,368 5,211 6,785
Gains on Sales of Other Assets, net 576 1 577 1
Other Income (Expense), net (1) (17) 1,259 17
Equity in Earnings of
Unconsolidated Affiliates (b) 126 - 126 -
Minority Interest Expense - 43 497 144
------- ------- ------- -------
EBIT $701 $63 $1,784 $243
------- ------- ------- -------
Natural Gas Gathered and
Processed/Transported, TBtu/day (c) 6.7 6.8 6.8 6.8
Natural Gas Liquids Production,
MBbl/d (c) 342 357 355 354
Average Natural Gas Price per MMBtu $8.37 $5.76 $7.12 $5.81
Average Natural Gas Liquids Price
per Gallon $0.91 $0.72 $0.80 $0.64
--------------------------------------------------------------------------
DUKE ENERGY NORTH AMERICA (a) (d)
Operating Revenues $- $75 $- $169
Operating Expenses - 88 - 318
Losses on Sales of Other Assets,
net (e) - (4) - (373)
Other Income, net of expenses - 5 - 6
Minority Interest Expense (Benefit) - 15 - (2)
------- ------- ------- -------
EBIT $- $(27) $- $(514)
------- ------- ------- -------
Actual Plant Production, GWh (DENA
Continuing Operations) 887 3,300
Proportional MW Capacity in
Operation (DENA Continuing
Operations) 3,600
--------------------------------------------------------------------------
INTERNATIONAL ENERGY
Operating Revenues $186 $146 $536 $447
Operating Expenses 139 109 385 338
Gains on Sales of Other Assets, net 1 1 1 1
Other Income, net of expenses 19 29 74 60
Minority Interest Expense 4 3 9 9
------- ------- ------- -------
EBIT $63 $64 $217 $161
------- ------- ------- -------
Sales, GWh 4,493 4,277 13,555 13,088
Proportional MW Capacity in
Operation 4,064 4,136
--------------------------------------------------------------------------
CRESCENT (a)
Operating Revenues $105 $77 $281 $216
Operating Expenses 95 62 225 173
Gains on Sales of Investments in
Commercial and Multi-Family Real
Estate 63 28 117 149
Other Income, net of expenses 46 - 44 -
Minority Interest (Benefit) Expense (1) - 7 2
------- ------- ------- -------
EBIT $120 $43 $210 $190
------- ------- ------- -------
--------------------------------------------------------------------------
OTHER (d)
Operating Revenues $282 $295 $510 $929
Operating Expenses 360 316 920 1,014
Gains (Losses) on Sales of Other
Assets, net 3 (3) 6 4
Other (Expense) Income, net (103) (1) (98) 25
Minority Interest Benefit (3) - (7) -
------- ------- ------- -------
EBIT $(175) $(25) $(495) $(56)
------- ------- ------- -------
Actual Plant Production, GWh (DENA
Continuing Operations) 958 1,664
Proportional MW Capacity in
Operation (DENA Continuing
Operations) 3,600
--------------------------------------------------------------------------
(a) Certain prior year amounts have been reclassified due to
discontinued operations.
(b) Represents the 50% interest in Duke Energy Field Services LLC
(c) Represents 100% of joint venture volumes.
(d) 2005 Segment EBIT balances for DENA's continuing operations are
included in Other.
(e) Prior year amounts for the nine months ended September 30, 2004
include DENA Southeast plant impairment of approximately
$360 million.
Note: See GAAP reconciliation associated with the 2005 third 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 Nine Months Ended
September 30, September 30,
------------------ ------------------
2005 2004 2005 2004
---------- ------- -------- ---------
Operating Revenues $3,028 $5,081 $13,630 $15,007
Operating Expenses 2,138 4,236 11,308 12,567
Gains on Sales of Investments in
Commercial and Multi-Family Real
Estate 63 28 117 149
Gains (Losses) on Sales of Other
Assets, net 580 (3) 589 (353)
------- ------- ------- -------
Operating Income 1,533 870 3,028 2,236
------- ------- ------- -------
Other Income and Expenses (60) 16 1,244 98
Interest Expense 228 329 813 984
Minority Interest Expense 10 62 508 146
------- ------- ------- -------
Earnings From Continuing Operations
Before Income Taxes and Equity in
Earnings of Unconsolidated Affiliates 1,235 495 2,951 1,204
Income Tax Expense from Continuing
Operations 487 147 1,095 365
------- ------- ------- -------
Income From Continuing Operations
Before Equity in Earnings of
Unconsolidated Affiliates 748 348 1,856 839
Equity in Earnings of Unconsolidated
Affiliates 176 33 256 110
------- ------- ------- -------
Income From Continuing Operations 924 381 2,112 949
(Loss) Income From Discontinued
Operations, net of tax (883) 8 (894) 183
------- ------- ------- -------
Net Income 41 389 1,218 1,132
Dividends and Premiums on Redemption
of Preferred and Preference Stock 3 2 7 7
------- ------- ------- -------
Earnings Available For Common
Stockholders $38 $387 $1,211 $1,125
======= ======= ======= =======
Common Stock Data
Weighted-average shares outstanding
Basic 926 938 936 925
Diluted 964 973 973 960
Earnings per share (from continuing
operations)
Basic $0.99 $0.40 $2.25 $1.02
Diluted $0.96 $0.39 $2.17 $0.99
(Loss) Earnings per share (from
discontinued operations)
Basic $(0.95) $0.01 $(0.96) $0.20
Diluted $(0.92) $0.01 $(0.92) $0.19
Earnings per share
Basic $0.04 $0.41 $1.29 $1.22
Diluted $0.04 $0.40 $1.25 $1.18
Dividends per share $- $- $0.860 $0.825
Note: Amounts remain subject to change until the Company's Form 10-Q is
filed with the Securities and Exchange Commission.
DUKE ENERGY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions)
September 30, December 31,
2005 2004
------------- ------------
ASSETS
Current Assets $8,357 $7,971
Investments and Other Assets 14,152 11,533
Net Property, Plant and Equipment 28,600 33,506
Regulatory Assets and Deferred Debits 2,568 2,460
------- -------
Total Assets $53,677 $55,470
======= =======
LIABILITIES AND COMMON STOCKHOLDERS' EQUITY
Current Liabilities $7,756 $7,502
Long-term Debt 15,062 16,932
Deferred Credits and Other Liabilities 14,161 12,975
Minority Interests 650 1,486
Preferred and preference stock
without sinking fund requirements 134 134
Common Stockholders' Equity 15,914 16,441
------- -------
Total Liabilities and Common
Stockholders' Equity $53,677 $55,470
======= =======
Note: Amounts remain subject to change until the Company's Form 10-Q is
filed with the Securities and Exchange Commission.
DUKE ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In millions)
Nine Months Ended
September 30,
-------------------------
2005 2004
------- -------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $1,218 $1,132
Adjustments to reconcile net income
to net cash provided by
operating activities 1,221 2,371
------- -------
Net cash provided by
operating activities 2,439 3,503
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash used in investing
activities (261) (1,601)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Net cash used in financing
activities (2,337) (1,543)
------- -------
Changes in cash and cash
equivalents associated with assets
held for sale 3 38
------- -------
Net (decrease) increase in cash and
cash equivalents (156) 397
Cash and cash equivalents at
beginning of period 533 397
------- -------
Cash and cash equivalents at end of
period $377 $794
======= =======
Note: Amounts remain subject to change until the Company's Form 10-Q is
filed with the Securities and Exchange Commission.
Supplemental Disclosures
Quarter Ended September 30, 2005
Duke Energy Corporation
--------------------------------------------------------------------------
Mark-to-market Portfolio (in millions) Non-AHFS AHFS Total
------------------------ -------- ---- -----
As of 09/30/2005 $15 $(1,109) $(1,094)
Daily Earnings at Risk (DER) (in millions) Continuing Discontinued
---------------------------- ---------- ------------
95% Confidence Level, One-Day Holding
Period, Two-Tailed
As of 09/30/2005 $6 $61 $65 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. DER is higher than prior quarter
due to restructuring of DENA's hedge books due to the decision to exit
the components of its business outside the Midwest.
Duke Energy North America
--------------------------------------------------------------------------
Owned Assets - Contracted Level
-------------------------------
Remaining 2005 2006
------------------------- --------------------------
Millions Millions
MWs MWh % Contracted MWh % Contracted
Region Capacity Available Capacity Energy Available Capacity Energy
------ -------- --------- -------- ------ --------- -------- ------
Midwest 3,600 b 7 c 17% 0% 28 c 11% 0%
b Capacity excludes assets held for sale and classified as "Discontinued
Operations".
c Midwest capacity includes 1.8 million MWh from peaking facilities in
2005 and 6.6 million in 2006.
Terms of Reference
--------------------------------------------------------------------------
MWs Capacity
------------
Represents the official rated capacity of DENA's percentage ownership of
its merchant assets, excluding assets held for sale and classified as
discontinued operations.
Millions MWhs Available
-----------------------
Represents the amount of electric power capable of being generated from
owned merchant assets, excluding assets held for sale and classified as
discontinued operations, 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").
Energy: Volumes sold as forward power hedges.
AHFS
----
Assets Held For Sale
Duke Energy Corporation
Quarterly Highlights
Supplemental Franchised Electric Information
September 30, 2005
Quarter Ended
September 30,
----------------------------------
%
2005 2004 Inc.(Dec.)
---------- ---------- ----------
GWH Sales
Residential 7,654 6,807 12.4%
General Service 7,303 6,937 5.3%
Industrial - Textile 1,749 1,925 (9.1%)
Industrial - Other 5,082 4,861 4.5%
---------- ---------- ----------
Total Industrial 6,831 6,786 0.7%
Other Energy Sales 67 67 -
Regular Resale 457 438 4.3%
---------- ---------- ----------
Total Regular Sales Billed 22,312 21,035 6.1%
Special Sales (A) 1,079 908 18.8%
---------- ---------- ----------
Total Electric Sales 23,391 21,943 6.6%
Unbilled Revenue 9 (342) 102.6%
---------- ---------- ----------
Total Duke Power Electric Sales 23,400 21,601 8.3%
Nantahala Electric Sales 324 303 6.9%
---------- ---------- ----------
Total DP Consolidated Electric
Sales 23,724 21,904 8.3%
========== ========== ==========
Average Number of Customers
Residential 1,843,208 1,808,955 1.9%
General Service 312,135 305,924 2.0%
Industrial - Textile 786 846 (7.1%)
Industrial - Other 6,661 6,670 (0.1%)
---------- ---------- ----------
Total Industrial 7,447 7,516 (0.9%)
Other Energy Sales 12,659 12,424 1.9%
Regular Resale 15 15 -
---------- ---------- ----------
Total Regular Sales 2,175,464 2,134,834 1.9%
Special Sales (A) 28 37 (24.3%)
---------- ---------- ----------
Total Duke Power Electric Sales 2,175,492 2,134,871 1.9%
Nantahala Electric Sales 68,733 67,346 2.1%
---------- ---------- ----------
Total DP Average Number of
Customers 2,244,225 2,202,217 1.9%
========== ========== ==========
(A) Excludes sales to Nantahala Power and Light Company
Heating and Cooling Degree Days
Actual
Heating Degree Days 1 9 (89.9%)
Cooling Degree Days 1,122 831 35.0%
Variance from Normal
Heating Degree Days (95.4%) (59.2%) n/a
Cooling Degree Days 18.6% (14.1%) n/a
Duke Energy Corporation
Quarterly Highlights
Supplemental Franchised Electric Information
September 30, 2005
Year To Date
September 30,
---------------------------------
%
2005 2004 Inc.(Dec.)
---------- ---------- ----------
GWH Sales
Residential 19,696 19,469 1.2%
General Service 19,173 18,987 1.0%
Industrial - Textile 5,004 5,390 (7.2%)
Industrial - Other 14,101 13,415 5.1%
---------- ---------- ----------
Total Industrial 19,105 18,805 1.6%
Other Energy Sales 201 199 1.0%
Regular Resale 1,123 1,132 (0.8%)
---------- ---------- ----------
Total Regular Sales Billed 59,298 58,592 1.2%
Special Sales (A) 5,229 4,844 7.9%
---------- ---------- ----------
Total Electric Sales 64,527 63,436 1.7%
Unbilled Revenue (164) (398) 58.8%
---------- ---------- ----------
Total Duke Power Electric Sales 64,363 63,038 2.1%
Nantahala Electric Sales 955 916 4.3%
---------- ---------- ----------
Total DP Consolidated Electric
Sales 65,318 63,954 2.1%
========== ========== ==========
Average Number of Customers
Residential 1,835,402 1,801,039 1.9%
General Service 310,122 304,006 2.0%
Industrial - Textile 802 859 (6.6%)
Industrial - Other 6,665 6,674 (0.1%)
---------- ---------- ----------
Total Industrial 7,467 7,533 (0.9%)
Other Energy Sales 12,977 11,936 8.7%
Regular Resale 15 15 -
---------- ---------- ----------
Total Regular Sales 2,165,983 2,124,529 2.0%
Special Sales (A) 32 38 (15.8%)
---------- ---------- ----------
Total Duke Power Electric Sales 2,166,015 2,124,567 2.0%
Nantahala Electric Sales 68,162 66,814 2.0%
---------- ---------- ----------
Total DP Average Number of
Customers 2,234,177 2,191,381 2.0%
========== ========== ==========
(A) Excludes sales to Nantahala Power and Light Company
Heating and Cooling Degree Days
Actual
Heating Degree Days 1,976 2,094 (5.6%)
Cooling Degree Days 1,474 1,400 5.3%
Variance from Normal
Heating Degree Days 1.5% 9.0% n/a
Cooling Degree Days 4.5% (1.8%) n/a
DUKE ENERGY CORPORATION
ONGOING TO REPORTED EARNINGS RECONCILIATION
September 2004 Quarter-to-date
(Dollars in Millions) Special Items (Note 1)
------------------------------------
Gains
(Losses)
on sales
and Tax
Gains impair- Benefit
(Losses) ments of from
on Sale equity DEA
Ongoing of invest- Restruc-
Earnings Assets Impairment ments turing
SEGMENT EARNINGS BEFORE -------- ------- ---------- -------- --------
INTEREST AND TAXES FROM
CONTINUING OPERATIONS
Franchised Electric $453 $ - $ - $ - $ -
Gas Transmission 262 2 - 5 A -
Field Services 88 1 (10)B (16)C -
Duke Energy North America (23) (4)D - - -
International Energy 63 - - 1 -
Crescent 43 - - - -
-------- ------- ---------- -------- --------
Total reportable segment
EBIT 886 (1) (10) (10) -
Other (25) (3) - 3 -
-------- ------- ---------- -------- --------
Total reportable segment
EBIT and other EBIT $861 $(4) $(10) $(7) $-
======== ======= ========== ======== ========
EARNINGS FOR COMMON
Total reportable segment EBIT
and other EBIT $861 $(4) $(10) $(7) $-
Foreign Currency Translation
Gains / (Losses) (3) - - - -
Interest Income and Other 14 - - - -
Interest Expense (329) - - - -
Minority Interest - Interest
Expense 6 - - - -
Income taxes on continuing
operations (203) 1 4 3 48
Discontinued operations, net
of taxes 4 - - - -
Trust Preferred/Preferred
Dividends (2) - - - -
-------- ------- ---------- -------- --------
Total Earnings for Common $348 $(3) $(6) $(4) $48
======== ======= ========== ======== ========
EARNINGS PER SHARE, BASIC $0.37 $- $(0.01) $(0.01) $0.05
======== ======= ========== ======== ========
EARNINGS PER SHARE, DILUTED $0.36 $- $(0.01) $(0.01) $0.05
======== ======= ========== ======== ========
DUKE ENERGY CORPORATION
ONGOING TO REPORTED EARNINGS RECONCILIATION
September 2004 Quarter-to-date
(Dollars in Millions)
Discontinued
Operations,
excluding
Crescent Total Reported
Resources Adjustments Earnings
SEGMENT EARNINGS BEFORE INTEREST AND ---------- ----------- ---------
TAXES FROM CONTINUING OPERATIONS
Franchised Electric $ - $ - $453
Gas Transmission - 7 269
Field Services - (25) 63
Duke Energy North America - (4) (27)
International Energy - 1 64
Crescent - - 43
---------- ----------- ---------
Total reportable segment EBIT - (21) 865
Other - - (25)
---------- ----------- ---------
Total reportable segment EBIT and
other EBIT $- $(21) $840
========== =========== =========
EARNINGS FOR COMMON
Total reportable segment EBIT and
other EBIT $- $(21) $840
Foreign Currency Translation Gains /
(Losses) - - (3)
Interest Income and Other - - 14
Interest Expense - - (329)
Minority Interest - Interest Expense - - 6
Income taxes on continuing operations - 56 (147)
Discontinued operations, net of taxes 4 4 8
Trust Preferred/Preferred Dividends - - (2)
---------- ----------- ---------
Total Earnings for Common $4 $39 $387
========== =========== =========
EARNINGS PER SHARE, BASIC $0.01 $0.04 $0.41
========== =========== =========
EARNINGS PER SHARE, DILUTED $0.01 $0.04 $0.40
========== =========== =========
Note 1 - Amounts for special items are entered net of minority interest
A - Millennium Pipeline
B - Recorded in Impairment and other charges on the Consolidated
Statements of Operations. Amount net of $12 million of minority
interest.
C - Amount net of $7 million of minority interest.
D - Southeast assets
Weighted Average Shares (reported and ongoing) - in millions
Basic 938
Diluted 973
DUKE ENERGY CORPORATION
ONGOING TO REPORTED EARNINGS RECONCILIATION
September 2005 Quarter-to-date
(Dollars in Millions) Special Items (Note 1)
-----------------------------------------
MTM change
Field on de-
Gain on Services designated
transfer Impairment hedge Field
of 19.7% of equity de-desig- Services
Ongoing interest invest- nation, hedges for
Earnings in DEFS ments net 2005, net
SEGMENT EARNINGS BEFORE -------- -------- ---------- --------- -----------
INTEREST AND TAXES
FROM CONTINUING
OPERATIONS
Franchised Electric $606 $ - $ - $ - $ -
Gas Transmission 329 - - - -
Field Services 87 576 A - 38 B -
Duke Energy North
America - - - - -
International Energy 83 - (20)C - -
Crescent 120 - - - -
-------- -------- ---------- --------- -----------
Total reportable
segment EBIT 1,225 576 (20) 38 -
Other (188) - - - (17)D
-------- -------- ---------- --------- -----------
Total reportable
segment EBIT and
other EBIT $1,037 $576 $(20) $38 $(17)
======== ======== ========== ========= ===========
EARNINGS FOR COMMON
Total reportable segment
EBIT and other EBIT $1,037 $576 $(20) $38 $(17)
Foreign Currency
Translation Gains /
(Losses) (14) - - - -
Interest Income and
Other 10 - - - -
Interest Expense (228) - - - -
Minority Interest
(Expense) Benefit -
Interest Expense (1) - - - -
Income taxes on
Continuing Operations (260) (213) 6 (15) 6
Discontinued Operations,
net of taxes 1 - - - -
Trust
Preferred/Preferred
Dividends (3) - - - -
-------- -------- ---------- --------- -----------
Total Earnings for
Common $542 $363 $(14) $23 $(11)
======== ======== ========== ========= ===========
EARNINGS PER SHARE,
BASIC $0.59 $0.39 $(0.02) $0.02 $(0.01)
======== ======== ========== ========= ===========
EARNINGS PER SHARE,
DILUTED $0.56 $0.38 $(0.01) $0.02 $(0.01)
======== ======== ========== ========= ===========
DUKE ENERGY CORPORATION
ONGOING TO REPORTED EARNINGS RECONCILIATION
September 2005 Quarter-to-date
Special
Items
(Dollars in Millions) (Note 1)
---------
Initial and Discon-
Subsequent tinued
gain on de- Operations,
designating excluding Total
Southeast Crescent Adjust- Reported
DENA hedges Resources ments Earnings
SEGMENT EARNINGS BEFORE INTEREST ----------- --------- ------- --------
AND TAXES FROM CONTINUING
OPERATIONS
Franchised Electric $ - $ - $ - $606
Gas Transmission - - - 329
Field Services - - 614 701
Duke Energy North America - - - -
International Energy - - (20) 63
Crescent - - - 120
----------- --------- ------- --------
Total reportable segment EBIT - - 594 1,819
Other 30 E - 13 (175)
----------- --------- ------- --------
Total reportable segment EBIT and
other EBIT $30 $- $607 $1,644
=========== ========= ======= ========
EARNINGS FOR COMMON
Total reportable segment EBIT and other
EBIT $30 $- $607 $1,644
Foreign Currency Translation Gains /
(Losses) - - - (14)
Interest Income and Other - - - 10
Interest Expense - - - (228)
Minority Interest (Expense) Benefit -
Interest Expense - - - (1)
Income taxes on Continuing Operations (11) - (227) (487)
Discontinued Operations, net of taxes - (884)F (884) (883)
Trust Preferred/Preferred Dividends - - - (3)
----------- --------- ------- --------
Total Earnings for Common $19 $(884) $(504) $38
=========== ========= ======= ========
EARNINGS PER SHARE, BASIC $0.02 $(0.95) $(0.55) $0.04
=========== ========= ======= ========
EARNINGS PER SHARE, DILUTED $0.02 $(0.92) $(0.52) $0.04
=========== ========= ======= ========
Note 1 - Amounts for special items are entered net of minority interest
A - Recorded in Gains (Losses) on Sales of Other Assets, net on the
Consolidated Statements of Operations.
B - Third quarter settlements of the 2005 portion of the Field Services
de-designated hedges as of 2/22/05, recorded in Equity in Earnings of
Unconsolidated Affiliates on the Consolidated Statements of
Operations.
C - Equity investment impairment, recorded in (Losses) Gains on sales and
impairments of equity investments on the Consolidated Statements of
Operations.
D - Recorded in Other income and expenses, net on the Consolidated
Statements of Operations.
E - Recorded in Non-regulated electric, natural gas, natural gas liquids
and other revenues on the Consolidated Statements of Operations.
F - Primarily the non-cash, after-tax charge related to the planned exit
of substantially all of DENA's physical and commercial assets outside
the midwestern United States and the reclassification of DENA 2005
operations. Recorded in (Loss) Income From Discontinued Operations,
net of tax on the Consolidated Statements of Operations.
Weighted Average Shares (reported and ongoing) - in millions
Basic 926
Diluted 964
DUKE ENERGY CORPORATION
ONGOING TO REPORTED EARNINGS RECONCILIATION
September 2004 Year-to-date
(Dollars in Millions) Special Items (Note 1)
-----------------------------------
Gains
(losses)
on sales
and
impair-
Gains ments of
(Losses) equity Enron
Ongoing on sale Impair- invest- Settle-
Earnings of assets ment ments ment
SEGMENT EARNINGS BEFORE -------- --------- -------- -------- -------
INTEREST AND TAXES
FROM CONTINUING OPERATIONS
Franchised Electric $1,212 $3 $- $- $ -
Gas Transmission 970 11 - 5 A -
Field Services 267 1 (10)B (16)C 1 D
Duke Energy North America (149) (373)E - - 8 D,F
International Energy 172 1 (13)G 1 -
Crescent 190 - - - -
-------- --------- -------- -------- -------
Total reportable segment
EBIT 2,662 (357) (23) (10) 9
Other (84) 4 H - 3 21 D
-------- --------- -------- -------- -------
Total reportable segment
EBIT and other EBIT $2,578 $(353) $(23) $(7) $30
======== ========= ======== ======== =======
EARNINGS FOR COMMON
Total reportable segment EBIT
and other EBIT $2,578 $(353) $(23) $(7) $30
Foreign Currency Translation
Gains / (Losses) - - - - -
Interest Income and other 46 - - - -
Interest Expense (984) - - - -
Minority Interest - Interest
Expense 27 - - - -
Income taxes on continuing
operations (537) 124 8 3 (11)
Discontinued operations, net
of taxes 4 - - - -
Trust Preferred/Preferred
Dividends (7) - - - -
-------- --------- -------- -------- -------
Total Earnings for Common $1,127 $(229) $(15) $(4) $19
======== ========= ======== ======== =======
EARNINGS PER SHARE, BASIC $1.22 $(0.25) $(0.02) $ - $0.02
======== ========= ======== ======== =======
EARNINGS PER SHARE, DILUTED $1.18 $(0.24) $(0.02) $ - $0.02
======== ========= ======== ======== =======
DUKE ENERGY CORPORATION
ONGOING TO REPORTED EARNINGS RECONCILIATION
September 2004 Year-to-date
Special
Items
(Dollars in Millions) (Note 1)
---------
Tax Discontinued
Benefit Operations,
from DEA excluding Total
Restruc- Crescent Adjust- Reported
turing Resources ments Earnings
SEGMENT EARNINGS BEFORE INTEREST --------- --------- -------- ---------
AND TAXES FROM CONTINUING
OPERATIONS
Franchised Electric $ - $ - $3 $1,215
Gas Transmission - - 16 986
Field Services - - (24) 243
Duke Energy North America - - (365) (514)
International Energy - - (11) 161
Crescent - - - 190
--------- --------- -------- ---------
Total reportable segment EBIT - - (381) 2,281
Other - - 28 (56)
--------- --------- -------- ---------
Total reportable segment EBIT
and other EBIT $- $- $(353) $2,225
========= ========= ======== =========
EARNINGS FOR COMMON
Total reportable segment EBIT and
other EBIT $- $- $(353) $2,225
Foreign Currency Translation Gains /
(Losses) - - - -
Interest Income and other - - - 46
Interest Expense - - - (984)
Minority Interest - Interest Expense - - - 27
Income taxes on continuing
operations 48 - 172 (365)
Discontinued operations, net of
taxes - 179 I 179 183
Trust Preferred/Preferred Dividends - - - (7)
--------- --------- -------- ---------
Total Earnings for Common $48 $179 $(2) $1,125
========= ========= ======== =========
EARNINGS PER SHARE, BASIC $0.05 $0.20 $ - $1.22
========= ========= ======== =========
EARNINGS PER SHARE, DILUTED $0.05 $0.19 $ - $1.18
========= ========= ======== =========
Note 1 - Amounts for special items are entered net of minority interest
A - Millennium Pipeline
B - Recorded in Impairment and other charges on the Consolidated
Statements of Operations. Amount net of $12 million of minority
interest.
C - Amount net of $7 million of minority interest.
D - Recorded in Operation, maintenance and other on the Consolidated
Statements of Operations.
E - 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).
$(367) 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.
F - Amount is net of $5 million of minority interest.
G - Charge related to Cantarell, recorded in Operation, maintenance and
other on the Consolidated Statements of Operations.
H - Includes $13 million related to the sale of Caribbean Nitrogen Co.
I - Primarily the approximate $280 million gain on the sale of
International Energy's Asia-Pacific business, partially offset by
DENA discontinued operations.
Weighted Average Shares (reported and ongoing) - in millions
Basic 925
Diluted 960
DUKE ENERGY CORPORATION
ONGOING TO REPORTED EARNINGS RECONCILIATION
September 2005 Year-to-date
(Dollars in Millions) Special Items (Note 1)
--------------------------------------
Gains
(Losses)
on sales
Gain on and Field
transfer impair- Services
Mutual of 19.7% ments of hedge
insurance interest equity de-desig-
Ongoing liability in DEFS invest- nation, net
Earnings adjustment ments
-------- --------- -------- -------- ---------
SEGMENT EARNINGS BEFORE
INTEREST AND TAXES FROM
CONTINUING OPERATIONS
Franchised Electric $1,216 $ - $ - $ - $ -
Gas Transmission 1,044 - - - -
Field Services 378 - 576 C 888 A (58)B
Duke Energy North
America - - - - -
International Energy 237 - - (20)F -
Crescent 210 - - - -
-------- --------- -------- -------- ---------
Total reportable
segment EBIT 3,085 - 576 868 (58)
-------- --------- -------- -------- ---------
Other (433) (28)D - - -
-------- --------- -------- -------- ---------
Total reportable
segment EBIT and
other EBIT $2,652 $(28) $576 $868 $(58)
======== ========= ======== ======== =========
EARNINGS FOR COMMON
Total reportable segment
EBIT and other EBIT $2,652 $(28) $576 $868 $(58)
Foreign Currency
Translation Gains /
(Losses) (12) - - - -
Interest Income and
Other 34 - - - -
Interest Expense (813) - - - -
Minority Interest
(Expense) Benefit -
Interest Expense 22 - - - -
Income taxes on
Continuing Operations (599) 10 (213) (323) 20
Discontinued Operations,
net of taxes 1 - - - -
Trust
Preferred/Preferred
Dividends (7) - - - -
-------- --------- -------- -------- ---------
Total Earnings for
Common $1,278 $(18) $363 $545 $(38)
======== ========= ======== ======== =========
EARNINGS PER SHARE,
BASIC $1.37 $(0.02) $0.39 $0.58 $(0.04)
======== ========= ======== ======== =========
EARNINGS PER SHARE,
DILUTED $1.32 $(0.02) $0.37 $0.56 $(0.04)
======== ========= ======== ======== =========
DUKE ENERGY CORPORATION
ONGOING TO REPORTED EARNINGS RECONCILIATION
September 2005 Year-to-date
(Dollars in Millions)
Special Items (Note 1)
---------------------
Initial and
Subsequent
MTM change gain on
on de- de-
designated desig- Discontinued
Field nating Operations,
Services Southeast excluding Total
hedges for DENA Crescent Adjust- Reported
2005, net hedges Resources ments Earnings
SEGMENT EARNINGS BEFORE ---------- --------- --------- ------- --------
INTEREST AND TAXES FROM
CONTINUING OPERATIONS
Franchised Electric $ - $ - $ - $ - $1,216
Gas Transmission - - - - 1,044
Field Services - - - 1,406 1,784
Duke Energy North America - - - - -
International Energy - - - (20) 217
Crescent - - - - 210
---------- --------- --------- ------- --------
Total reportable segment
EBIT - - - 1,386 4,471
Other (64)E 30 G - (62) (495)
---------- --------- --------- ------- --------
Total reportable segment
EBIT and other EBIT $(64) $30 $- $1,324 $3,976
========== ========= ========= ======= ========
EARNINGS FOR COMMON
Total reportable segment EBIT
and other EBIT $(64) $30 $- $1,324 $3,976
Foreign Currency Translation
Gains / (Losses) - - - - (12)
Interest Income and Other - - - - 34
Interest Expense - - - - (813)
Minority Interest (Expense)
Benefit - Interest Expense - - - - 22
Income taxes on Continuing
Operations 21 (11) - (496) (1,095)
Discontinued Operations, net
of taxes - - (895)H (895) (894)
Trust Preferred/Preferred
Dividends - - - - (7)
---------- --------- --------- ------- --------
Total Earnings for Common $(43) $19 $(895) $(67) $1,211
========== ========= ========= ======= ========
EARNINGS PER SHARE, BASIC $(0.05) $0.02 $(0.96) $(0.08) $1.29
========== ========= ========= ======= ========
EARNINGS PER SHARE, DILUTED $(0.04) $0.02 $(0.92) $(0.07) $1.25
========== ========= ========= ======= ========
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 proposed transfer of 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, natural gas liquids and other revenues, and
$38 million of hedge settlements recorded in Equity in Earnings of
Unconsolidated Affiliates 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 - $47 million loss recorded in Non-regulated electric, natural gas,
natural gas liquids and other revenues, and $17 million loss recorded
in Other income and expenses, net on the Consolidated Statements of
Operations.
F - Equity investment impairment, recorded in (Losses) Gains on sales and
impairments of equity investments on the Consolidated Statements of
Operations.
G - Recorded in Non-regulated electric, natural gas, natural gas liquids
and other revenues on the Consolidated Statements of Operations.
H - Primarily the non-cash, after-tax charge related to the planned exit
of substantially all of DENA's physical and commercial assets outside
the midwestern United States and the reclassification of DENA 2005
operations. Recorded in (Loss) Income From Discontinued Operations,
net of tax on the Consolidated Statements of Operations.
Weighted Average Shares (reported and ongoing) - in millions
Basic 936
Diluted 973
Special items for the first and second quarters (as summarized in this
earnings release) include:
Pre-Tax Tax 2005 EPS 2004 EPS
($ 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 (0.04) --
Additional liabilities related to
mutual insurance companies (28) 10 (0.02) --
TOTAL EPS IMPACT $0.45
Second quarter 2005
Settlement of positions on 2005 Field
Services' hedges that were
de-designated 22 (8) 0.01 --
Mark-to-market gain on de-designated
2005 Field Services' hedges 7 (2) 0.01 --
TOTAL EPS IMPACT $0.02
First quarter 2004
Net loss on sale of DENA assets (net
of $1 million of minority interest),
primarily the sale of southeast U.S.
plants (359) 126 -- (0.25)
Gains on sale of other assets,
including Caribbean Nitrogen Co. 14 (5) -- 0.01
Charge related to the sale of
Cantarell investment (13) 5 -- (0.01)
TOTAL EPS IMPACT ($0.25)
Second quarter 2004
Enron settlement (net of minority
interest of $5 million) $30 ($11) $0.02
Net losses on asset sales (net of
minority interests of $6 million) (5) 2 (0.01)
TOTAL EPS IMPACT $0.01
SOURCE Duke Energy
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