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Second Quarter Earnings Review
August 3, 2006



Jim Rogers
President and Chief Executive Officer

David Hauser
Group Executive and Chief Financial Officer
Safe Harbor Statement

      Some of the statements in this document concerning future
      company performance will be forward-looking within the meanings
      of the securities laws. Actual results may materially differ from those
      discussed in these forward-looking statements, and you should refer
      to the additional information contained in Duke Energy’s and
      Cinergy’s 2005 Form 10-Ks filed with the SEC and other SEC filings,
      concerning factors that could cause those results to be different than
      contemplated in today's discussion.

      Reg G Disclosure
      In addition, today's discussion includes certain non-GAAP financial
      measures as defined under SEC Regulation G. A reconciliation of
      those measures to the most directly comparable GAAP measures is
      available on our Investor Relations website at www.duke-energy.com.


Second Quarter Earnings Review                                  August 3, 2006   2
Earnings Summary
                                                         2Q06          2Q05
       DUK Reported Earnings per Diluted Share           $ 0.28         $ 0.32
        Special Items                                      0.09          (0.02)
        Discontinued Operations                            0.06           0.02
       DUK Ongoing Earnings per Diluted Share            $ 0.43         $ 0.32

       • Strong results from ongoing businesses, on track to achieve
         employee incentive target
       • Major strategic accomplishments:
             Closed the merger with Cinergy
             Announced sale of Commercial Marketing & Trading
             Announced intent to spin off gas business
       • 2Q06 results represent combined company, while 2Q05 results
         are pre-merger

Second Quarter Earnings Review                                  August 3, 2006    3
U.S. Franchised Electric & Gas

      • Segment EBIT increased                   Reported & Ongoing Segment EBIT
        by $77 million over 2Q05                 ($ millions)

                                                                        2Q06 2Q05
     • The addition of Cinergy’s
        regulated utilities in the           Reported Segment EBIT     $ 351    $ 274
        Midwest contributed $90
                                             Special Items                   -      -
        million, net of $10 million in
        rate reductions associated           Ongoing Segment EBIT      $ 351    $ 274
        with the merger
     • Improved weather in the Carolinas added $29 million
     • Average number of customers across all service territories increased by
       more than 65,000 compared to the same period last year
     • These increases were partially offset by bulk power marketing results in
       the Carolinas
           Unplanned outages reduced bulk power sales by $17 million
           $18 million charge associated with a required change in the method of
           calculation for profit sharing retroactive to Jan. 1, 2005
     • Duke Energy Carolinas also recognized a charge of about $15 million for
       community donations and rate reductions associated with the merger

Second Quarter Earnings Review                                             August 3, 2006   4
Natural Gas Transmission

      • EBIT increase primarily due to          Reported & Ongoing Segment EBIT
        a $46 million increase in natural       ($ millions)
        gas processing margins                                              2Q06         2Q05
           Mainly due to the addition of the    Reported Segment EBIT      $ 361         $ 304
           Empress system
                                                Special Items                    -           -
           Strong processing results
           represent a robust frac spread       Ongoing Segment EBIT       $ 361         $ 304
           $1 change in frac spread affects
           Empress’ EBIT by about $25 million annually
      • Favorable resolution of ad valorem tax items had a positive effect of $15
        million
      • Stronger Canadian currency had a positive effect of $11 million
      • Additional earnings from U.S. expansion projects
      • Offsetting factors include interest expense associated with Gulfstream
        financing, the formation of the Canadian Income Trust (DEIF) and higher
        operating and depreciation costs


Second Quarter Earnings Review                                          August 3, 2006           5
Field Services –
      Comparison to Pro-Forma 2005 Results


                                                    ($ millions)


           DEFS Net Income - 100%                   $     232

           Current Duke Energy Ownership                50%

           Pro-Forma Ongoing Equity Earnings 2Q05   $     116


           Ongoing Equity Earnings 2Q06             $     148


           Increase 2005 to 2006                        +28%




Second Quarter Earnings Review                      August 3, 2006   6
Field Services

      • Represents Duke Energy’s          Reported & Ongoing Equity Earnings/EBIT
        50% ownership in Duke             ($ millions)
        Energy Field Services                                             2Q06 2Q05
      • Strong commodity prices and       Reported Equity Earnings/EBIT   $ 148      $ 164
        improved natural gas and NGL
                                          Special Items                        -      (22)
        marketing results more than
        offset the negative impact of     Ongoing Equity Earnings/EBIT    $ 148      $ 142
        Duke’s decreased ownership
      • Lower gathering and processing volumes had a negative impact in the quarter
      • Reflecting strong earnings and cash flow, DEFS paid dividends of $83 million
        and another $57 million in tax distributions to Duke Energy this quarter
      • $1/Bbl move in crude oil equates to a $15 million annual change in EBIT




Second Quarter Earnings Review                                      August 3, 2006           7
Commercial Power

      • Commercial Power segment                       Reported & Ongoing Segment EBIT
                                                       ($ millions)
        includes non-regulated generation
        assets in the Midwest and Duke                                                  2Q06         2Q05
        Energy Generation Services
                                                       Reported Segment EBIT           $   20    $ (16)
      • Segment earnings improved by
                                                       Special Items                         -          -
        $36 million over 2Q05
                                                   Ongoing Segment EBIT           $ 20     $ (16)
           $97 million increase with the
           addition of Cinergy’s non-regulated
           generation fleet, before effect of $48 million in net purchase accounting charges and
           a $16 million loss associated with synfuel facilities
      • Purchase accounting adjustment related to Cinergy merger
           All Cinergy assets were fair-valued at the time of closing
           2006 adjustment originally projected at $0.03/share; now expected to be
           $(0.08)/share for the year
           Most significant change is related to the value of Ohio Rate Stabilization Plan (RSP)
             • RSP value is still below market, but is now closer to market value
           2007 adjustment expected to be approximately $(0.04)

Second Quarter Earnings Review                                                      August 3, 2006          8
International Energy

      • Ongoing earnings were slightly           Reported & Ongoing Segment EBIT
        lower due to an unplanned                ($ millions)
        outage in Peru which increased                                          2Q06         2Q05
        purchased power costs and by
                                                 Reported Segment EBIT          $ 26         $ 86
        lower hydrology in Peru and Brazil
                                                 Special Items                      55          -
      • Favorable currency impacts of
        $4 million partially offset the          Ongoing Segment EBIT           $ 81         $ 86
        decreases
      • A $55 million impairment related to our equity investment in the Campeche
        facility in Mexico substantially decreased reported segment EBIT
      • Bolivia announced plans to nationalize its energy infrastructure
           Current capital employed in Bolivia is approximately $70 million – annual EBIT
           contributions from this investment are not material




Second Quarter Earnings Review                                              August 3, 2006          9
Crescent Resources

                                                   Reported & Ongoing Segment EBIT
      • Sharp increase in results for
                                                   ($ millions)
        segment EBIT was due to two
        major sales during the quarter:                                            2Q06         2Q05
          $52 million gain on sale of property     Reported Segment EBIT           $ 174         $ 38
          at Lake Keowee in South Carolina
                                                   Special Items                         -          -
          $81 million gain on sale of
                                                   Ongoing Segment EBIT            $ 174         $ 38
          properties at Potomac Yard in
          northern Virginia
      • Book value of Crescent’s real estate portfolio was approximately $1.4 billion
        at the end of the quarter
      • Crescent’s 2006 ongoing segment EBIT target is $250 million with YTD
        results of $216 million
           If we finalize a JV for Crescent, it would affect our share of the prospective results




Second Quarter Earnings Review                                                 August 3, 2006       10
Other

      • Ongoing losses in second                Reported & Ongoing EBIT
        quarter 2006 improved by                ($ millions)
        $17 million                                                           2Q06         2Q05
      • Special Items for 2Q06 include:         Other Reported EBIT         $ (174)    $ (102)
           $74 million for Cinergy merger
                                                Special Items                   82           (7)
           costs-to-achieve, primarily
           associated with severance costs      Other Ongoing EBIT Loss     $ (92)     $ (109)
           $8 million for gas spinoff costs-
           to-achieve
      • Lower ongoing losses were largely due to lower insurance reserve charges
      • Imbedded in these results is $20 million charge associated with DEFS de-
        designated hedges for 2006
           Essentially the same impact as 2Q05
           Hedges marked on forward curve for crude at an average price of about $75.50/Bbl




Second Quarter Earnings Review                                            August 3, 2006       11
Other Items

      • Cash, cash equivalents and short-term investments were approximately
        $1 billion, as of June 30
           Total outstanding commercial paper as of June 30 was $1.2 billion
      • Interest expense for the quarter was about $44 million higher than last
        year, primarily due to the Cinergy merger and partially offset by the
        deconsolidation of Field Services
      • Duke Energy suspended stock buyback program
           As of June 23, we had repurchased approximately 17.5 million shares at an
           average price of about $28.57 for a total of $500 million
      • Announced intent to spin off gas business
           Consolidated debt of the gas company expected to be approximately $9 billion
           at Dec. 31, 2006, including approximately $3 billion of Duke Capital parent-
           level debt
           Intend to keep all debt investment-grade




Second Quarter Earnings Review                                             August 3, 2006   12
Commitment to Investors

      Focused on what
      matters most to you:
         Growing earnings and
         dividends over time
         Achieving the full value of
         our portfolio
         Reinvesting in the business
         Developing a strong
         leadership team with a
         deep bench
         Delivering clear and
         transparent communications


Second Quarter Earnings Review         August 3, 2006   13
Commitment to Investors

      Focused on what
      matters most to you:             • Closed Cinergy merger
                                       • Strong results for 2nd quarter
         Growing earnings and
         dividends over time           • Board increased annual
                                         dividend by $0.04 to $1.28,
         Achieving the full value of
                                         effective with September
         our portfolio
                                         distribution
         Reinvesting in the business   • Over last 12 months, dividend
                                         has increased 16.4%
         Developing a strong
         leadership team with a
         deep bench
         Delivering clear and
         transparent communications


Second Quarter Earnings Review                             August 3, 2006   14
Commitment to Investors

      Focused on what
      matters most to you:             • Closed sale of DENA assets
                                       • Disposition of final DENA
         Growing earnings and
                                         contracts
         dividends over time
                                       • Announced sale of CMT
         Achieving the full value of
         our portfolio                 • Pursuing partner for Crescent
                                       • Filed for Ohio RSP extension
         Reinvesting in the business
                                       • Announced plan to spin off
         Developing a strong
                                         gas business
         leadership team with a
         deep bench                    • Committed to MLP structure
                                         for certain interstate gas
         Delivering clear and
                                         pipeline assets
         transparent communications


Second Quarter Earnings Review                            August 3, 2006   15
Commitment to Investors

      Focused on what
      matters most to you:
         Growing earnings and
         dividends over time
         Achieving the full value of
                                       • Rockingham acquisition
         our portfolio
                                         approved by NCUC
         Reinvesting in the business   • Filed testimony on a new coal
                                         plant in North Carolina
         Developing a strong
         leadership team with a        • Scrubber program on track
         deep bench                    • Received FEED study cost
                                         recovery for IGCC plant
         Delivering clear and
         transparent communications    • Numerous natural gas projects


Second Quarter Earnings Review                          August 3, 2006   16
Active Natural Gas Projects

  Pine River

West Doe Plant
                                                          Dawn Delivery
                                        St. Clair Power
                                                          Enhancement
                                          Dawn Area                                       Canaport
                                                          Dawn-Trafalgar
                                           Storage
                                                           Phase 1 – 3                    Cape Cod
                                                                                          Excelerate
                                                                                         NE Gateway
                                                                                         Islander East
                                                                                           Ramapo
                                    Time II
                                                                                          BP Logan
                                 Lebanon East /
                                    TEMAX                                                  Accident
                                 Mid-Continent                             Jewell Ridge
                                   Crossing
                                                                            Piedmont
                       Egan Expansion
                                                                             Saltville
                         Moss Bluff
                                                                      Copiah Storage
                         Expansion
                                                                    SE Supply Header
                                                                     Gulfstream 3 & 4

Second Quarter Earnings Review                                                  August 3, 2006           17
Commitment to Investors

      Focused on what
      matters most to you:
         Growing earnings and
         dividends over time
         Achieving the full value of
         our portfolio
         Reinvesting in the business
                                       • Gas Company
         Developing a strong               Strong team announced with
         leadership team with a            the decision to spin
         deep bench                    • Duke Energy
                                           New organization will be
         Delivering clear and
                                           determined by end of 3Q06
         transparent communications


Second Quarter Earnings Review                           August 3, 2006   18
Commitment to Investors

      Focused on what
      matters most to you:
         Growing earnings and
         dividends over time
                                       • Updated Merger Scorecard will
         Achieving the full value of
                                         be shared in November with
         our portfolio
                                         third quarter results
         Reinvesting in the business
                                       • Commitment to share timely
                                         information regarding the spin
         Developing a strong
         leadership team with a            Filed request for Private
         deep bench                        Letter Ruling with IRS
                                           File Form 10 with SEC in
         Delivering clear and
                                           third quarter
         transparent communications
                                           Road shows – late 2006

Second Quarter Earnings Review                             August 3, 2006   19
Value Proposition

      We are committed to shareholder value:
         • Long-term earnings growth after spinoff of gas business
                Duke Energy expected 4-6% ongoing EPS growth
                Gas company expected 5-7% ongoing EPS growth

         • Dividend growth
                Duke Energy estimated 70-75% payout target
                Gas company estimated 60% payout target

         • Improved risk profile and credit metrics

                  Actively engaged in strategic initiatives
                       to increase shareholder value

Second Quarter Earnings Review                                 August 3, 2006   20
Ongoing Diluted Earnings-per-share (“EPS”) and 2006 Employee Incentive
Target Measure

The slides and prepared remarks for Duke Energy’s August 3, 2006, earnings
review include a discussion of the company's 2006 Employee EPS incentive
target of $1.90. This EPS measure is used for employee incentive bonuses and
is based on ongoing diluted EPS, adjusted for the actual vs. original anticipated
impact of purchase accounting resulting from Duke Energy’s merger with Cinergy
Corp. Ongoing diluted EPS is a non-GAAP financial measure as it represents
diluted EPS from continuing operations plus the per-share effect of any
discontinued operations from the company’s Crescent Resources real estate
unit, adjusted for the per share impact of special items. Special items represent
certain charges and credits which management believes will not be recurring on
a regular basis. The most directly comparable GAAP measure for ongoing diluted
EPS is reported diluted EPS from continuing operations, which includes the
impact of special items. Due to the forward-looking nature of this non-GAAP
financial measure, information to reconcile it to the most directly comparable
GAAP financial measure is not available at this time, as management is unable
to project any special items for 2006.


Anticipated Ongoing Earnings-per-share (“EPS”) Growth Percentages

The slides and prepared remarks for Duke Energy’s August 3, 2006 earnings
review include a discussion of anticipated growth in ongoing EPS for both Duke
Energy and for the gas company Duke Energy anticipates spinning off in January
2007. These ongoing growth percentages are based on anticipated ongoing
diluted EPS for future periods and are non-GAAP financial measures, as they
represent diluted EPS from continuing operations plus, for Duke Energy, the per-
share effects of any discontinued operations from its Crescent Resources real
estate unit, adjusted for the impact of special items. Special items represent
certain charges and credits which management believes will not be recurring on
a regular basis. The most directly comparable GAAP measure for ongoing diluted
EPS is reported diluted EPS from continuing operations, which includes the
impact of special items. Due to the forward-looking nature of ongoing diluted EPS
for future periods, information to reconcile this non-GAAP financial measure to
the most directly comparable GAAP financial measure is not available at this
time, as management is unable to forecast any special items for future periods.


Ongoing Segment EBIT

The slides and prepared remarks for Duke Energy’s August 3, 2006 earnings
review include a discussion of forecasted ongoing EBIT for certain segments.
Ongoing segment EBIT amounts are non-GAAP financial measures as they
represent reported segment EBIT adjusted for “special items,” which represent
certain charges and credits which management believes will not be recurring on
a regular basis. 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 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 management is unable to
project any “special items” for any future periods.
DUKE ENERGY CORPORATION
                                                                           ONGOING TO REPORTED EARNINGS RECONCILIATION
                                                                                       June 2005 Quarter-to-date
                                                                                          (Dollars in Millions)

                                                                                                                 Special Items (Note 1)

                                                                                                                                 MTM change on                  Discontinued
                                                                                                         Field Services           de-designated                  Operations,
                                                                                                           hedge de-              Field Services                  excluding
                                                                                         Ongoing          designation,           hedges for 2005,                 Crescent               Total             Reported
                                                                                         Earnings              net                      net                      Resources            Adjustments          Earnings

SEGMENT EARNINGS BEFORE INTEREST AND TAXES
 FROM CONTINUING OPERATIONS

U.S. Franchised Electric & Gas                                                       $          274      $             -         $              -           $             -           $            -   $        274

Natural Gas Transmission                                                                        304                         -                           -                         -                -            304

Field Services                                                                                  142                     22 A                            -                         -           22                164

Commercial Power                                                                                (16)                        -                           -                         -                -             (16)

International Energy                                                                             86                         -                           -                         -                -             86

Crescent                                                                                         38                         -                           -                         -                -             38

  Total reportable segment EBIT                                                                 828                        22                       -                         -               22                850

Other                                                                                          (109)                        -                       7B                            -            7                (102)

  Total reportable segment EBIT and other EBIT                                       $          719      $                 22    $                  7       $                     -   $       29       $        748

EARNINGS FOR COMMON

                                                                                                         $                       $                   7      $               -      $           29      $         748
Total reportable segment EBIT and other EBIT                                         $          719                        22
Interest expense                                                                               (295)                        -                        -                      -                   -               (295)
Interest income and other                                                                        30                         -                        -                      -                   -                 30
Income taxes from continuing operations                                                        (147)                       (8)                      (2)                     -                 (10)              (157)
Discontinued operations, net of taxes                                                            -                          -                        -                    (19) C,D            (19)               (19)

Total Earnings for Common                                                            $          307      $              14       $                  5       $             (19)        $            -   $        307

                                                                                     $         0.33      $            0.01       $             0.01         $           (0.02)        $        -       $        0.33
EARNINGS PER SHARE, BASIC

                                                                                     $         0.32      $            0.01       $             0.01         $           (0.02)        $        -       $        0.32
EARNINGS PER SHARE, DILUTED

Note 1 - Amounts for special items are presented net of any related 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, natural gas liquids and other
(Operating Revenues) on the Consolidated Statements of Operations.

B - Recorded in Non-regulated electric, natural gas, natural gas liquids and other (Operating Revenues) on the Consolidated Statements of Operations.

C - Excludes Crescent discontinued operations.

D - Primarily DENA discontinued operations, net of tax. Recorded in Loss From Discontinued Operations, net of tax 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 2006 Quarter-to-date
                                                                                                (Dollars in millions, except per-share amounts)


                                                                                                                                        Special Items (Note 1)
                                                                                                                                                                    Costs to
                                                                                                                 Costs to                  Impairment of            Achieve,
                                                                                              Ongoing            Achieve,                    Campeche            Anticipated Gas        Discontinued            Total              Reported
                                                                                              Earnings        Cinergy Merger                Investment               Spin-off            Operations          Adjustments           Earnings

SEGMENT EARNINGS BEFORE INTEREST AND TAXES
 FROM CONTINUING OPERATIONS

U.S. Franchised Electric & Gas                                                           $           351       $            -              $          -          $          -           $        -           $             -   $          351

Natural Gas Transmission                                                                             361                            -                     -                         -                    -                 -              361

Field Services                                                                                       148                            -                     -                         -                    -                 -              148

Commercial Power                                                                                         20                         -                     -                         -                    -                 -                  20

International Energy                                                                                     81                         -                 (55) B                        -                    -            (55)                    26

Crescent                                                                                             174                            -                     -                         -                    -                 -              174

  Total reportable segment EBIT                                                                     1,135                       -                     (55)                      -                    -                (55)              1,080

Other                                                                                                 (92)                  (74) A                        -                     (8) C                    -            (82)               (174)

                                                                                                                                           $                     $              (8)     $                -   $       (137)     $          906
  Total reportable segment EBIT and other EBIT                                           $          1,043      $            (74)                      (55)

EARNINGS FOR COMMON

Total reportable segment EBIT and other EBIT                                             $          1,043      $            (74)           $          (55)       $              (8)     $          -      $          (137)     $          906
Interest expense                                                                                     (339)                    -                         -                        -                 -                    -                (339)
Interest income and other                                                                              43                     -                         -                        -                 -                    -                  43
Income taxes from continuing operations                                                              (204)                   26                         -                        3                 -                   29                (175)
Discontinued operations, net of taxes                                                                  -                      -                         -                        -               (80) D,E             (80)                (80)

Total Earnings for Common                                                                $           543       $            (48)           $          (55)       $              (5)     $        (80)        $       (188)     $          355

                                                                                         $           0.44      $          (0.04)           $         (0.05)      $              -       $       (0.06)       $      (0.15)     $         0.29
EARNINGS PER SHARE, BASIC

                                                                                         $           0.43      $          (0.04)           $         (0.05)      $              -       $       (0.06)       $      (0.15)     $         0.28
EARNINGS PER SHARE, DILUTED

Note 1 - Amounts for special items are presented net of any related minority interest.

A - Recorded in Operation, maintenance and other (Operating Expenses) on the Consolidated Statements of Operations.

B - $38 million recorded in Operation, maintenance and other (Operating Expenses) and $17 million recorded in (Losses) gains on sales and impairments of equity investments (Other Income and Expenses) on
the Consolidated Statements of Operations.

C - Recorded in Operation, maintenance and other (Operating Expenses) on the Consolidated Statements of Operations.

D - Excludes Crescent discontinued operations.

E - Primarily DENA discontinued operations. Recorded in Loss From Discontinued Operations, net of tax on the Consolidated Statements of Operations.

Weighted Average Shares (reported and ongoing) - in millions

                 Basic                     1,238

                 Diluted                   1,259
DUKE ENERGY CORPORATION
                                                                                            ONGOING TO REPORTED EARNINGS RECONCILIATION
                                                                                                         June 2005 Year-to-date
                                                                                                          (Dollars in Millions)

                                                                                                                                Special Items (Note 1)

                                                                                                                                                                   MTM change on                  Discontinued
                                                                                                     Mutual                                  Field Services         de-designated                  Operations,
                                                                                                   insurance             Gains on sales        hedge de-            Field Services                  excluding
                                                                                   Ongoing           liability              of equity         designation,         hedges for 2005,                 Crescent               Total           Reported
                                                                                   Earnings       adjustment              investments              net                    net                      Resources            Adjustments        Earnings

SEGMENT EARNINGS BEFORE INTEREST AND TAXES
 FROM CONTINUING OPERATIONS

U.S. Franchised Electric & Gas                                                 $          610     $          -           $          -        $            -        $              -           $             -           $         -    $        610

Natural Gas Transmission                                                                  715                        -                  -                     -                           -                         -             -             715

Field Services                                                                            291                        -             888 A                  (96) B                          -                         -          792             1,083

Commercial Power                                                                           (34)                      -                  -                     -                           -                         -             -              (34)

International Energy                                                                      154                        -                  -                     -                           -                         -             -             154

Crescent                                                                                   90                        -                  -                     -                           -                         -             -              90

  Total reportable segment EBIT                                                          1,826                   -                 888                    (96)                        -                         -              792             2,618

Other                                                                                     (211)              (28) C                     -                     -                   (47) D                            -           (75)            (286)

  Total reportable segment EBIT and other EBIT                                 $         1,615    $          (28)        $         888       $            (96)     $              (47)        $                     -   $      717     $       2,332

EARNINGS FOR COMMON

Total reportable segment EBIT and other EBIT                                   $         1,615    $          (28)        $         888       $            (96)     $              (47)        $               -    $            717    $       2,332
Interest Expense                                                                          (585)                -                     -                      -                       -                         -                   -             (585)
Interest Income and other                                                                   45                 -                     -                      -                       -                         -                   -               45
Income taxes from continuing operations                                                   (341)               10                  (329)                    36                      16                         -                (267)            (608)
Discontinued operations, net of taxes                                                       -                  -                     -                      -                       -                       (11) E              (11)             (11)

Total Earnings for Common                                                      $          734     $          (18)        $         559      $             (60)     $              (31)        $             (11)        $      439     $       1,173

                                                                               $          0.78    $        (0.02)        $        0.59      $           (0.06)     $            (0.03)        $           (0.01)        $      0.47    $        1.25
EARNINGS PER SHARE, BASIC

                                                                               $          0.76    $        (0.02)        $        0.57      $           (0.07)     $            (0.03)        $           (0.01)        $      0.44    $        1.20
EARNINGS PER SHARE, DILUTED

Note 1 - Amounts for special items are presented net of any related 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. Recorded in (Losses) gains on sales and impairments of equity investments
(Other Income and Expenses) on the Consolidated Statements of Operations.

B - De-designation of hedges due to proposed sell of 19.7% interest in DEFS to ConocoPhillips. $125 million loss recorded in Impairment and other charges (Operating Expenses) 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 (Operating Revenues) on the Consolidated Statements of Operations

C - Recorded in Operation, maintenance and other (Operating Expenses) on the Consolidated Statements of Operations

D - Recorded in Non-regulated electric, natural gas, natural gas liquids and other (Operating Revenues) on the Consolidated Statements of Operations

E - Excludes Crescent discontinued operations.

F - Primarily DENA discontinued operations, net of tax. Recorded in Loss From Discontinued Operations, net of tax 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 2006 Year-to-date
                                                                                                                       (Dollars in millions, except per-share amounts)

                                                                                                                                                              Special Items (Note 1)

                                                                                                                                                                                                                 Costs to
                                                                                                                    Costs to                    Net Gain on                             Impairment of            Achieve,
                                                                                             Ongoing            Achieve, Cinergy               Settlement of        Gain on Sales         Campeche              Anticipated              Discontinued              Total            Reported
                                                                                             Earnings               Merger                       Contract             of Assets          Investment             Gas Spin-off              Operations            Adjustments         Earnings

SEGMENT EARNINGS BEFORE INTEREST AND TAXES
 FROM CONTINUING OPERATIONS

U.S. Franchised Electric & Gas                                                           $            710       $              -           $              -         $          -        $            -         $         -           $              -           $          -    $          710

Natural Gas Transmission                                                                              775                              -                  24 B                     -                     -                       -                          -            24                799

Field Services                                                                                        278                              -                       -                14 C                     -                       -                          -            14                292

Commercial Power                                                                                        (7)                            -                       -                   -                     -                       -                          -              -                   (7)

International                                                                                         168                              -                       -                   -                 (55) D                      -                          -            (55)              113

Crescent                                                                                              216                              -                       -                   -                     -                       -                          -              -               216

  Total reportable segment EBIT                                                                     2,140                          -                      24                    14                   (55)                        -                      -                (17)            2,123

Other                                                                                                (146)                     (78) A                          -                   -                     -                   (8) E                          -            (86)             (232)

                                                                                                                                           $                        $           14      $            (55)      $             (8)     $                      -   $      (103)    $        1,891
  Total reportable segment EBIT and other EBIT                                           $          1,994       $              (78)                       24

EARNINGS FOR COMMON

Total reportable segment EBIT and other EBIT                                             $          1,994       $              (78)        $              24        $           14      $            (55)      $             (8)     $                -      $         (103)    $        1,891
Interest expense                                                                                     (589)                       -                         -                     -                     -                      -                       -                   -               (589)
Interest income and other                                                                              52                        -                         -                     -                     -                      -                       -                   -                 52
Income taxes from continuing operations                                                              (450)                      27                        (8)                   (5)                    -                      3                       -                  17               (433)
Discontinued operations, net of taxes                                                                  -                         -                         -                     -                     -                      -                    (208) F,G           (208)              (208)

Total Earnings for Common                                                                $          1,007       $              (51)        $              16        $              9    $            (55)      $             (5)     $             (208)        $      (294)    $          713

                                                                                         $           0.93       $            (0.05)        $            0.01       $         0.01       $          (0.05)      $             -       $            (0.19)        $      (0.27)   $         0.66
EARNINGS PER SHARE, BASIC

                                                                                         $           0.91       $            (0.05)        $            0.01       $         0.01       $          (0.05)      $             -       $            (0.19)        $      (0.27)   $         0.64
EARNINGS PER SHARE, DILUTED

Note 1 - Amounts for special items are presented net of any related minority interest.


A - Recorded in Operation, maintenance and other (Operating Expenses) on the Consolidated Statements of Operations.


B - $23 million recorded in (Losses) Gains on Sales of Other Assets and Other, net and $1 million recorded in Other income and expenses, net (Other Income and Expenses) on the Consolidated Statements of Operations.


C - Recorded in Equity in earnings of unconsolidated affiliates (Other Income and Expenses) on the Consolidated Statements of Operations. Transaction related to sale of Brookland, Masterscreek and Jasper assets.


D - $38 million recorded in Operation, maintenance and other (Operating Expenses) and $17 million recorded in (Losses) gains on sales and impairments of equity investments (Other Income and Expenses) on the Consolidated Statements of Operations.


E - Recorded in Operation, maintenance and other (Operating Expenses) on the Consolidated Statements of Operations.


F - Excludes Crescent discontinued operations.


G - Primarily DENA discontinued operations. Recorded in Loss From Discontinued Operations, net of tax on the Consolidated Statements of Operations.


Weighted Average Shares (reported and ongoing) - in millions
                 Basic                    1,083


                 Diluted                  1,111
Duke Energy Corporation
                        Pro-Forma Equity Earnings for the Field Services Segment - 2Q 2005
                                 Non-GAAP Reconciliation for SEC Regulation G


The slides and prepared remarks for Duke Energy's August 3, 2006 earnings review include a discussion of
pro-forma equity earning for the Field Services segment for the second quarter 2005, which is a non-GAAP
measure as it reflects what ongoing equity earnings (see quot;Ongoing EBITquot; discussion included herein) would
have been had Duke Energy's ownership percentage in DEFS LLC been reduced to 50% as of the beginning
of 2005. The most directly comparable GAAP measure for pro-forma DEFS equity earnings for the second
quarter 2005 is reported segment EBIT for the Field Services segment for the second quarter 2005. A
reconciliation of these two measures is included below.

(Dollars in millions)                                                                                 Q2 2005

Field Services Reported Segment EBIT (69.7% ownership)                                                $   164

Less: Special Items
        Field Services hedge de-designation                                                  $ (22)
        Total Special Items                                                                               (22)
Field Services Ongoing Segment EBIT                                                                       142
Adjustments for hedges                                                                                     38
Adjustment for 19.7% interest transferred [($142 + $38)*(19.7% / 69.7%)]                                  (51)
Adjustment for interest and taxes (included in Equity Earnings)                                           (16)
Other                                                                                                       3
Field Services Pro-Forma Ongoing Equity Earnings (from Earnings Review Slides) (a)                    $   116

(a) Assumes DEFS LLC was 50% owned by Duke Energy during 2Q 2005 and there were no hedge impacts
recognized during the quarter ended June 30, 2005.

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2Q06_Slides

  • 1. Second Quarter Earnings Review August 3, 2006 Jim Rogers President and Chief Executive Officer David Hauser Group Executive and Chief Financial Officer
  • 2. Safe Harbor Statement Some of the statements in this document concerning future company performance will be forward-looking within the meanings of the securities laws. Actual results may materially differ from those discussed in these forward-looking statements, and you should refer to the additional information contained in Duke Energy’s and Cinergy’s 2005 Form 10-Ks filed with the SEC and other SEC filings, concerning factors that could cause those results to be different than contemplated in today's discussion. Reg G Disclosure In addition, today's discussion includes certain non-GAAP financial measures as defined under SEC Regulation G. A reconciliation of those measures to the most directly comparable GAAP measures is available on our Investor Relations website at www.duke-energy.com. Second Quarter Earnings Review August 3, 2006 2
  • 3. Earnings Summary 2Q06 2Q05 DUK Reported Earnings per Diluted Share $ 0.28 $ 0.32 Special Items 0.09 (0.02) Discontinued Operations 0.06 0.02 DUK Ongoing Earnings per Diluted Share $ 0.43 $ 0.32 • Strong results from ongoing businesses, on track to achieve employee incentive target • Major strategic accomplishments: Closed the merger with Cinergy Announced sale of Commercial Marketing & Trading Announced intent to spin off gas business • 2Q06 results represent combined company, while 2Q05 results are pre-merger Second Quarter Earnings Review August 3, 2006 3
  • 4. U.S. Franchised Electric & Gas • Segment EBIT increased Reported & Ongoing Segment EBIT by $77 million over 2Q05 ($ millions) 2Q06 2Q05 • The addition of Cinergy’s regulated utilities in the Reported Segment EBIT $ 351 $ 274 Midwest contributed $90 Special Items - - million, net of $10 million in rate reductions associated Ongoing Segment EBIT $ 351 $ 274 with the merger • Improved weather in the Carolinas added $29 million • Average number of customers across all service territories increased by more than 65,000 compared to the same period last year • These increases were partially offset by bulk power marketing results in the Carolinas Unplanned outages reduced bulk power sales by $17 million $18 million charge associated with a required change in the method of calculation for profit sharing retroactive to Jan. 1, 2005 • Duke Energy Carolinas also recognized a charge of about $15 million for community donations and rate reductions associated with the merger Second Quarter Earnings Review August 3, 2006 4
  • 5. Natural Gas Transmission • EBIT increase primarily due to Reported & Ongoing Segment EBIT a $46 million increase in natural ($ millions) gas processing margins 2Q06 2Q05 Mainly due to the addition of the Reported Segment EBIT $ 361 $ 304 Empress system Special Items - - Strong processing results represent a robust frac spread Ongoing Segment EBIT $ 361 $ 304 $1 change in frac spread affects Empress’ EBIT by about $25 million annually • Favorable resolution of ad valorem tax items had a positive effect of $15 million • Stronger Canadian currency had a positive effect of $11 million • Additional earnings from U.S. expansion projects • Offsetting factors include interest expense associated with Gulfstream financing, the formation of the Canadian Income Trust (DEIF) and higher operating and depreciation costs Second Quarter Earnings Review August 3, 2006 5
  • 6. Field Services – Comparison to Pro-Forma 2005 Results ($ millions) DEFS Net Income - 100% $ 232 Current Duke Energy Ownership 50% Pro-Forma Ongoing Equity Earnings 2Q05 $ 116 Ongoing Equity Earnings 2Q06 $ 148 Increase 2005 to 2006 +28% Second Quarter Earnings Review August 3, 2006 6
  • 7. Field Services • Represents Duke Energy’s Reported & Ongoing Equity Earnings/EBIT 50% ownership in Duke ($ millions) Energy Field Services 2Q06 2Q05 • Strong commodity prices and Reported Equity Earnings/EBIT $ 148 $ 164 improved natural gas and NGL Special Items - (22) marketing results more than offset the negative impact of Ongoing Equity Earnings/EBIT $ 148 $ 142 Duke’s decreased ownership • Lower gathering and processing volumes had a negative impact in the quarter • Reflecting strong earnings and cash flow, DEFS paid dividends of $83 million and another $57 million in tax distributions to Duke Energy this quarter • $1/Bbl move in crude oil equates to a $15 million annual change in EBIT Second Quarter Earnings Review August 3, 2006 7
  • 8. Commercial Power • Commercial Power segment Reported & Ongoing Segment EBIT ($ millions) includes non-regulated generation assets in the Midwest and Duke 2Q06 2Q05 Energy Generation Services Reported Segment EBIT $ 20 $ (16) • Segment earnings improved by Special Items - - $36 million over 2Q05 Ongoing Segment EBIT $ 20 $ (16) $97 million increase with the addition of Cinergy’s non-regulated generation fleet, before effect of $48 million in net purchase accounting charges and a $16 million loss associated with synfuel facilities • Purchase accounting adjustment related to Cinergy merger All Cinergy assets were fair-valued at the time of closing 2006 adjustment originally projected at $0.03/share; now expected to be $(0.08)/share for the year Most significant change is related to the value of Ohio Rate Stabilization Plan (RSP) • RSP value is still below market, but is now closer to market value 2007 adjustment expected to be approximately $(0.04) Second Quarter Earnings Review August 3, 2006 8
  • 9. International Energy • Ongoing earnings were slightly Reported & Ongoing Segment EBIT lower due to an unplanned ($ millions) outage in Peru which increased 2Q06 2Q05 purchased power costs and by Reported Segment EBIT $ 26 $ 86 lower hydrology in Peru and Brazil Special Items 55 - • Favorable currency impacts of $4 million partially offset the Ongoing Segment EBIT $ 81 $ 86 decreases • A $55 million impairment related to our equity investment in the Campeche facility in Mexico substantially decreased reported segment EBIT • Bolivia announced plans to nationalize its energy infrastructure Current capital employed in Bolivia is approximately $70 million – annual EBIT contributions from this investment are not material Second Quarter Earnings Review August 3, 2006 9
  • 10. Crescent Resources Reported & Ongoing Segment EBIT • Sharp increase in results for ($ millions) segment EBIT was due to two major sales during the quarter: 2Q06 2Q05 $52 million gain on sale of property Reported Segment EBIT $ 174 $ 38 at Lake Keowee in South Carolina Special Items - - $81 million gain on sale of Ongoing Segment EBIT $ 174 $ 38 properties at Potomac Yard in northern Virginia • Book value of Crescent’s real estate portfolio was approximately $1.4 billion at the end of the quarter • Crescent’s 2006 ongoing segment EBIT target is $250 million with YTD results of $216 million If we finalize a JV for Crescent, it would affect our share of the prospective results Second Quarter Earnings Review August 3, 2006 10
  • 11. Other • Ongoing losses in second Reported & Ongoing EBIT quarter 2006 improved by ($ millions) $17 million 2Q06 2Q05 • Special Items for 2Q06 include: Other Reported EBIT $ (174) $ (102) $74 million for Cinergy merger Special Items 82 (7) costs-to-achieve, primarily associated with severance costs Other Ongoing EBIT Loss $ (92) $ (109) $8 million for gas spinoff costs- to-achieve • Lower ongoing losses were largely due to lower insurance reserve charges • Imbedded in these results is $20 million charge associated with DEFS de- designated hedges for 2006 Essentially the same impact as 2Q05 Hedges marked on forward curve for crude at an average price of about $75.50/Bbl Second Quarter Earnings Review August 3, 2006 11
  • 12. Other Items • Cash, cash equivalents and short-term investments were approximately $1 billion, as of June 30 Total outstanding commercial paper as of June 30 was $1.2 billion • Interest expense for the quarter was about $44 million higher than last year, primarily due to the Cinergy merger and partially offset by the deconsolidation of Field Services • Duke Energy suspended stock buyback program As of June 23, we had repurchased approximately 17.5 million shares at an average price of about $28.57 for a total of $500 million • Announced intent to spin off gas business Consolidated debt of the gas company expected to be approximately $9 billion at Dec. 31, 2006, including approximately $3 billion of Duke Capital parent- level debt Intend to keep all debt investment-grade Second Quarter Earnings Review August 3, 2006 12
  • 13. Commitment to Investors Focused on what matters most to you: Growing earnings and dividends over time Achieving the full value of our portfolio Reinvesting in the business Developing a strong leadership team with a deep bench Delivering clear and transparent communications Second Quarter Earnings Review August 3, 2006 13
  • 14. Commitment to Investors Focused on what matters most to you: • Closed Cinergy merger • Strong results for 2nd quarter Growing earnings and dividends over time • Board increased annual dividend by $0.04 to $1.28, Achieving the full value of effective with September our portfolio distribution Reinvesting in the business • Over last 12 months, dividend has increased 16.4% Developing a strong leadership team with a deep bench Delivering clear and transparent communications Second Quarter Earnings Review August 3, 2006 14
  • 15. Commitment to Investors Focused on what matters most to you: • Closed sale of DENA assets • Disposition of final DENA Growing earnings and contracts dividends over time • Announced sale of CMT Achieving the full value of our portfolio • Pursuing partner for Crescent • Filed for Ohio RSP extension Reinvesting in the business • Announced plan to spin off Developing a strong gas business leadership team with a deep bench • Committed to MLP structure for certain interstate gas Delivering clear and pipeline assets transparent communications Second Quarter Earnings Review August 3, 2006 15
  • 16. Commitment to Investors Focused on what matters most to you: Growing earnings and dividends over time Achieving the full value of • Rockingham acquisition our portfolio approved by NCUC Reinvesting in the business • Filed testimony on a new coal plant in North Carolina Developing a strong leadership team with a • Scrubber program on track deep bench • Received FEED study cost recovery for IGCC plant Delivering clear and transparent communications • Numerous natural gas projects Second Quarter Earnings Review August 3, 2006 16
  • 17. Active Natural Gas Projects Pine River West Doe Plant Dawn Delivery St. Clair Power Enhancement Dawn Area Canaport Dawn-Trafalgar Storage Phase 1 – 3 Cape Cod Excelerate NE Gateway Islander East Ramapo Time II BP Logan Lebanon East / TEMAX Accident Mid-Continent Jewell Ridge Crossing Piedmont Egan Expansion Saltville Moss Bluff Copiah Storage Expansion SE Supply Header Gulfstream 3 & 4 Second Quarter Earnings Review August 3, 2006 17
  • 18. Commitment to Investors Focused on what matters most to you: Growing earnings and dividends over time Achieving the full value of our portfolio Reinvesting in the business • Gas Company Developing a strong Strong team announced with leadership team with a the decision to spin deep bench • Duke Energy New organization will be Delivering clear and determined by end of 3Q06 transparent communications Second Quarter Earnings Review August 3, 2006 18
  • 19. Commitment to Investors Focused on what matters most to you: Growing earnings and dividends over time • Updated Merger Scorecard will Achieving the full value of be shared in November with our portfolio third quarter results Reinvesting in the business • Commitment to share timely information regarding the spin Developing a strong leadership team with a Filed request for Private deep bench Letter Ruling with IRS File Form 10 with SEC in Delivering clear and third quarter transparent communications Road shows – late 2006 Second Quarter Earnings Review August 3, 2006 19
  • 20. Value Proposition We are committed to shareholder value: • Long-term earnings growth after spinoff of gas business Duke Energy expected 4-6% ongoing EPS growth Gas company expected 5-7% ongoing EPS growth • Dividend growth Duke Energy estimated 70-75% payout target Gas company estimated 60% payout target • Improved risk profile and credit metrics Actively engaged in strategic initiatives to increase shareholder value Second Quarter Earnings Review August 3, 2006 20
  • 21.
  • 22. Ongoing Diluted Earnings-per-share (“EPS”) and 2006 Employee Incentive Target Measure The slides and prepared remarks for Duke Energy’s August 3, 2006, earnings review include a discussion of the company's 2006 Employee EPS incentive target of $1.90. This EPS measure is used for employee incentive bonuses and is based on ongoing diluted EPS, adjusted for the actual vs. original anticipated impact of purchase accounting resulting from Duke Energy’s merger with Cinergy Corp. Ongoing diluted EPS is a non-GAAP financial measure as it represents diluted EPS from continuing operations plus the per-share effect of any discontinued operations from the company’s Crescent Resources real estate unit, adjusted for the per share impact of special items. Special items represent certain charges and credits which management believes will not be recurring on a regular basis. The most directly comparable GAAP measure for ongoing diluted EPS is reported diluted EPS from continuing operations, which includes the impact of special items. Due to the forward-looking nature of this non-GAAP financial measure, information to reconcile it to the most directly comparable GAAP financial measure is not available at this time, as management is unable to project any special items for 2006. Anticipated Ongoing Earnings-per-share (“EPS”) Growth Percentages The slides and prepared remarks for Duke Energy’s August 3, 2006 earnings review include a discussion of anticipated growth in ongoing EPS for both Duke Energy and for the gas company Duke Energy anticipates spinning off in January 2007. These ongoing growth percentages are based on anticipated ongoing diluted EPS for future periods and are non-GAAP financial measures, as they represent diluted EPS from continuing operations plus, for Duke Energy, the per- share effects of any discontinued operations from its Crescent Resources real estate unit, adjusted for the impact of special items. Special items represent certain charges and credits which management believes will not be recurring on a regular basis. The most directly comparable GAAP measure for ongoing diluted EPS is reported diluted EPS from continuing operations, which includes the impact of special items. Due to the forward-looking nature of ongoing diluted EPS for future periods, information to reconcile this non-GAAP financial measure to the most directly comparable GAAP financial measure is not available at this time, as management is unable to forecast any special items for future periods. Ongoing Segment EBIT The slides and prepared remarks for Duke Energy’s August 3, 2006 earnings review include a discussion of forecasted ongoing EBIT for certain segments. Ongoing segment EBIT amounts are non-GAAP financial measures as they represent reported segment EBIT adjusted for “special items,” which represent
  • 23. certain charges and credits which management believes will not be recurring on a regular basis. 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 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 management is unable to project any “special items” for any future periods.
  • 24. DUKE ENERGY CORPORATION ONGOING TO REPORTED EARNINGS RECONCILIATION June 2005 Quarter-to-date (Dollars in Millions) Special Items (Note 1) MTM change on Discontinued Field Services de-designated Operations, hedge de- Field Services excluding Ongoing designation, hedges for 2005, Crescent Total Reported Earnings net net Resources Adjustments Earnings SEGMENT EARNINGS BEFORE INTEREST AND TAXES FROM CONTINUING OPERATIONS U.S. Franchised Electric & Gas $ 274 $ - $ - $ - $ - $ 274 Natural Gas Transmission 304 - - - - 304 Field Services 142 22 A - - 22 164 Commercial Power (16) - - - - (16) International Energy 86 - - - - 86 Crescent 38 - - - - 38 Total reportable segment EBIT 828 22 - - 22 850 Other (109) - 7B - 7 (102) Total reportable segment EBIT and other EBIT $ 719 $ 22 $ 7 $ - $ 29 $ 748 EARNINGS FOR COMMON $ $ 7 $ - $ 29 $ 748 Total reportable segment EBIT and other EBIT $ 719 22 Interest expense (295) - - - - (295) Interest income and other 30 - - - - 30 Income taxes from continuing operations (147) (8) (2) - (10) (157) Discontinued operations, net of taxes - - - (19) C,D (19) (19) Total Earnings for Common $ 307 $ 14 $ 5 $ (19) $ - $ 307 $ 0.33 $ 0.01 $ 0.01 $ (0.02) $ - $ 0.33 EARNINGS PER SHARE, BASIC $ 0.32 $ 0.01 $ 0.01 $ (0.02) $ - $ 0.32 EARNINGS PER SHARE, DILUTED Note 1 - Amounts for special items are presented net of any related 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, natural gas liquids and other (Operating Revenues) on the Consolidated Statements of Operations. B - Recorded in Non-regulated electric, natural gas, natural gas liquids and other (Operating Revenues) on the Consolidated Statements of Operations. C - Excludes Crescent discontinued operations. D - Primarily DENA discontinued operations, net of tax. Recorded in Loss From Discontinued Operations, net of tax on the Consolidated Statements of Operations. Weighted Average Shares (reported and ongoing) - in millions Basic 927 Diluted 964
  • 25. DUKE ENERGY CORPORATION ONGOING TO REPORTED EARNINGS RECONCILIATION June 2006 Quarter-to-date (Dollars in millions, except per-share amounts) Special Items (Note 1) Costs to Costs to Impairment of Achieve, Ongoing Achieve, Campeche Anticipated Gas Discontinued Total Reported Earnings Cinergy Merger Investment Spin-off Operations Adjustments Earnings SEGMENT EARNINGS BEFORE INTEREST AND TAXES FROM CONTINUING OPERATIONS U.S. Franchised Electric & Gas $ 351 $ - $ - $ - $ - $ - $ 351 Natural Gas Transmission 361 - - - - - 361 Field Services 148 - - - - - 148 Commercial Power 20 - - - - - 20 International Energy 81 - (55) B - - (55) 26 Crescent 174 - - - - - 174 Total reportable segment EBIT 1,135 - (55) - - (55) 1,080 Other (92) (74) A - (8) C - (82) (174) $ $ (8) $ - $ (137) $ 906 Total reportable segment EBIT and other EBIT $ 1,043 $ (74) (55) EARNINGS FOR COMMON Total reportable segment EBIT and other EBIT $ 1,043 $ (74) $ (55) $ (8) $ - $ (137) $ 906 Interest expense (339) - - - - - (339) Interest income and other 43 - - - - - 43 Income taxes from continuing operations (204) 26 - 3 - 29 (175) Discontinued operations, net of taxes - - - - (80) D,E (80) (80) Total Earnings for Common $ 543 $ (48) $ (55) $ (5) $ (80) $ (188) $ 355 $ 0.44 $ (0.04) $ (0.05) $ - $ (0.06) $ (0.15) $ 0.29 EARNINGS PER SHARE, BASIC $ 0.43 $ (0.04) $ (0.05) $ - $ (0.06) $ (0.15) $ 0.28 EARNINGS PER SHARE, DILUTED Note 1 - Amounts for special items are presented net of any related minority interest. A - Recorded in Operation, maintenance and other (Operating Expenses) on the Consolidated Statements of Operations. B - $38 million recorded in Operation, maintenance and other (Operating Expenses) and $17 million recorded in (Losses) gains on sales and impairments of equity investments (Other Income and Expenses) on the Consolidated Statements of Operations. C - Recorded in Operation, maintenance and other (Operating Expenses) on the Consolidated Statements of Operations. D - Excludes Crescent discontinued operations. E - Primarily DENA discontinued operations. Recorded in Loss From Discontinued Operations, net of tax on the Consolidated Statements of Operations. Weighted Average Shares (reported and ongoing) - in millions Basic 1,238 Diluted 1,259
  • 26. DUKE ENERGY CORPORATION ONGOING TO REPORTED EARNINGS RECONCILIATION June 2005 Year-to-date (Dollars in Millions) Special Items (Note 1) MTM change on Discontinued Mutual Field Services de-designated Operations, insurance Gains on sales hedge de- Field Services excluding Ongoing liability of equity designation, hedges for 2005, Crescent Total Reported Earnings adjustment investments net net Resources Adjustments Earnings SEGMENT EARNINGS BEFORE INTEREST AND TAXES FROM CONTINUING OPERATIONS U.S. Franchised Electric & Gas $ 610 $ - $ - $ - $ - $ - $ - $ 610 Natural Gas Transmission 715 - - - - - - 715 Field Services 291 - 888 A (96) B - - 792 1,083 Commercial Power (34) - - - - - - (34) International Energy 154 - - - - - - 154 Crescent 90 - - - - - - 90 Total reportable segment EBIT 1,826 - 888 (96) - - 792 2,618 Other (211) (28) C - - (47) D - (75) (286) Total reportable segment EBIT and other EBIT $ 1,615 $ (28) $ 888 $ (96) $ (47) $ - $ 717 $ 2,332 EARNINGS FOR COMMON Total reportable segment EBIT and other EBIT $ 1,615 $ (28) $ 888 $ (96) $ (47) $ - $ 717 $ 2,332 Interest Expense (585) - - - - - - (585) Interest Income and other 45 - - - - - - 45 Income taxes from continuing operations (341) 10 (329) 36 16 - (267) (608) Discontinued operations, net of taxes - - - - - (11) E (11) (11) Total Earnings for Common $ 734 $ (18) $ 559 $ (60) $ (31) $ (11) $ 439 $ 1,173 $ 0.78 $ (0.02) $ 0.59 $ (0.06) $ (0.03) $ (0.01) $ 0.47 $ 1.25 EARNINGS PER SHARE, BASIC $ 0.76 $ (0.02) $ 0.57 $ (0.07) $ (0.03) $ (0.01) $ 0.44 $ 1.20 EARNINGS PER SHARE, DILUTED Note 1 - Amounts for special items are presented net of any related 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. Recorded in (Losses) gains on sales and impairments of equity investments (Other Income and Expenses) on the Consolidated Statements of Operations. B - De-designation of hedges due to proposed sell of 19.7% interest in DEFS to ConocoPhillips. $125 million loss recorded in Impairment and other charges (Operating Expenses) 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 (Operating Revenues) on the Consolidated Statements of Operations C - Recorded in Operation, maintenance and other (Operating Expenses) on the Consolidated Statements of Operations D - Recorded in Non-regulated electric, natural gas, natural gas liquids and other (Operating Revenues) on the Consolidated Statements of Operations E - Excludes Crescent discontinued operations. F - Primarily DENA discontinued operations, net of tax. Recorded in Loss From Discontinued Operations, net of tax on the Consolidated Statements of Operations Weighted Average Shares (reported and ongoing) - in millions Basic 941 Diluted 977
  • 27. DUKE ENERGY CORPORATION ONGOING TO REPORTED EARNINGS RECONCILIATION June 2006 Year-to-date (Dollars in millions, except per-share amounts) Special Items (Note 1) Costs to Costs to Net Gain on Impairment of Achieve, Ongoing Achieve, Cinergy Settlement of Gain on Sales Campeche Anticipated Discontinued Total Reported Earnings Merger Contract of Assets Investment Gas Spin-off Operations Adjustments Earnings SEGMENT EARNINGS BEFORE INTEREST AND TAXES FROM CONTINUING OPERATIONS U.S. Franchised Electric & Gas $ 710 $ - $ - $ - $ - $ - $ - $ - $ 710 Natural Gas Transmission 775 - 24 B - - - - 24 799 Field Services 278 - - 14 C - - - 14 292 Commercial Power (7) - - - - - - - (7) International 168 - - - (55) D - - (55) 113 Crescent 216 - - - - - - - 216 Total reportable segment EBIT 2,140 - 24 14 (55) - - (17) 2,123 Other (146) (78) A - - - (8) E - (86) (232) $ $ 14 $ (55) $ (8) $ - $ (103) $ 1,891 Total reportable segment EBIT and other EBIT $ 1,994 $ (78) 24 EARNINGS FOR COMMON Total reportable segment EBIT and other EBIT $ 1,994 $ (78) $ 24 $ 14 $ (55) $ (8) $ - $ (103) $ 1,891 Interest expense (589) - - - - - - - (589) Interest income and other 52 - - - - - - - 52 Income taxes from continuing operations (450) 27 (8) (5) - 3 - 17 (433) Discontinued operations, net of taxes - - - - - - (208) F,G (208) (208) Total Earnings for Common $ 1,007 $ (51) $ 16 $ 9 $ (55) $ (5) $ (208) $ (294) $ 713 $ 0.93 $ (0.05) $ 0.01 $ 0.01 $ (0.05) $ - $ (0.19) $ (0.27) $ 0.66 EARNINGS PER SHARE, BASIC $ 0.91 $ (0.05) $ 0.01 $ 0.01 $ (0.05) $ - $ (0.19) $ (0.27) $ 0.64 EARNINGS PER SHARE, DILUTED Note 1 - Amounts for special items are presented net of any related minority interest. A - Recorded in Operation, maintenance and other (Operating Expenses) on the Consolidated Statements of Operations. B - $23 million recorded in (Losses) Gains on Sales of Other Assets and Other, net and $1 million recorded in Other income and expenses, net (Other Income and Expenses) on the Consolidated Statements of Operations. C - Recorded in Equity in earnings of unconsolidated affiliates (Other Income and Expenses) on the Consolidated Statements of Operations. Transaction related to sale of Brookland, Masterscreek and Jasper assets. D - $38 million recorded in Operation, maintenance and other (Operating Expenses) and $17 million recorded in (Losses) gains on sales and impairments of equity investments (Other Income and Expenses) on the Consolidated Statements of Operations. E - Recorded in Operation, maintenance and other (Operating Expenses) on the Consolidated Statements of Operations. F - Excludes Crescent discontinued operations. G - Primarily DENA discontinued operations. Recorded in Loss From Discontinued Operations, net of tax on the Consolidated Statements of Operations. Weighted Average Shares (reported and ongoing) - in millions Basic 1,083 Diluted 1,111
  • 28. Duke Energy Corporation Pro-Forma Equity Earnings for the Field Services Segment - 2Q 2005 Non-GAAP Reconciliation for SEC Regulation G The slides and prepared remarks for Duke Energy's August 3, 2006 earnings review include a discussion of pro-forma equity earning for the Field Services segment for the second quarter 2005, which is a non-GAAP measure as it reflects what ongoing equity earnings (see quot;Ongoing EBITquot; discussion included herein) would have been had Duke Energy's ownership percentage in DEFS LLC been reduced to 50% as of the beginning of 2005. The most directly comparable GAAP measure for pro-forma DEFS equity earnings for the second quarter 2005 is reported segment EBIT for the Field Services segment for the second quarter 2005. A reconciliation of these two measures is included below. (Dollars in millions) Q2 2005 Field Services Reported Segment EBIT (69.7% ownership) $ 164 Less: Special Items Field Services hedge de-designation $ (22) Total Special Items (22) Field Services Ongoing Segment EBIT 142 Adjustments for hedges 38 Adjustment for 19.7% interest transferred [($142 + $38)*(19.7% / 69.7%)] (51) Adjustment for interest and taxes (included in Equity Earnings) (16) Other 3 Field Services Pro-Forma Ongoing Equity Earnings (from Earnings Review Slides) (a) $ 116 (a) Assumes DEFS LLC was 50% owned by Duke Energy during 2Q 2005 and there were no hedge impacts recognized during the quarter ended June 30, 2005.