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Duke Sets Earnings Record in 1999
Fueled by rapid growth in its unregulated energy businesses andstrong performances by electric and gas transmission operations,Duke Energy reported record earnings for 1999. Before interest andtaxes (EBIT), Duke posted a gain of $2.8 billion before a $660million after-tax gain on the sale of the Midwest Pipelines and aone-time charge of $800 million at Duke Power. EBIT for 1998 was$2.6 billion. Duke Energy set another record for revenues in 1999,reaching $21.7 billion. Fourth quarter revenues increased 48%.
“Duke Energy’s 1999 results flow from our global energy merchantstrategy,” said Richard B. Priory, Duke CEO. “We exceeded ourearnings target for 1999 and are looking forward to building onthose results in 2000 as we continue to grow our earnings.
“Central to our strategy is actively managing a multinationalportfolio that includes natural gas and power generation assets,trading of energy positions and risks and delivery of energysolutions to large customers and aggregators. We have assembled theright mix of expertise, assets and market positions. This has begunto pay off, as our domestic and international investments areproducing strong earnings,” Priory said.
Energy Services businesses delivered their target ofyear-to-year EBIT growth of 40% to 50%, achieving a 48% increase inEBIT, excluding one-time charges. Duke Energy Field Services,another unregulated business, reported an 89% increase in EBIT.Duke Energy’s regulated business groups also posted strongoperating performance. Last year’s EBIT at Duke Power was $1.7billion, a 13% increase over 1998. The Northeast Pipelinesincreased EBIT by 17% to $557 million.
Duke Energy Field Services is the country’s largest gas gathererand producer of natural gas liquids (NGLs), with assets spanningthe Rocky Mountains, Midcontinent, Permian Basin, Gulf Coast andoffshore Gulf of Mexico. Field Services experienced substantialearnings growth in 1999 with EBIT of $144 million, a 90% increaseover 1998 attributable to continued efficiency improvements atexisting plants, the acquisition of UPFuels and the integration ofthose assets, along with higher NGL prices, which averaged $0.34per gallon compared to $0.26 in 1998.
Also during the fourth quarter, Duke Energy Field Servicesannounced it would combine its gas gathering and processing businesseswith Phillips Petroleum’s Gas Processing and Marketing (GPM) unit toform a new midstream company to be called Duke Energy Field Services(see Daily GPI, Dec. 17) The new companywill further enhance Field Services’ position as the nation’s largestmidstream gas liquids business and the premier gatherer and processorof gas in the continental United States.
For the year, EBIT for Duke Energy Gas Transmission group’sNortheast Pipelines increased $81 million to $557 million — a 17%increase over 1998. For the quarter, the Northeast Pipelinesreported EBIT of $145 million, a 41% increase over the same periodin 1998. Market expansion projects, joint ventures, higherthroughput and lower operating expenses contributed to increasedearnings over last year.
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