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Duke Energy Reports Loss for 4th Quarter

January 28, 2003

CHARLOTTE, N.C. (AP) _ Duke Energy Corp., forced to pay millions of dollars for job cuts and ice storm repairs while struggling with setbacks in its merchant energy business and a sluggish economy, reported a loss of $52 million for the fourth quarter.

``It’s been a really tough year for Duke Energy and our industry,″ chairman and chief executive Rick Priory told analysts on a conference call Tuesday after the company reported its earnings results.

In afternoon trading on the New York Stock Exchange, Duke Energy shares were up 62 cents, or 3.7 percent, at $17.21.

The Charlotte-based energy company has eliminated 2,000 jobs, or nearly 10 percent of its work force. The job cuts, which cost $70 million, will save Duke Energy $150 million a year, Priory said.

``Our regulated power and natural gas businesses remained strong in 2002, but we suffered from the effects of the sharp downturn in the energy merchant sector,″ he said. ``To manage the impact of the merchant downturn and a sluggish economy, we have cut costs and downsized across the enterprise.″

Duke Energy’s loss amounted to 6 cents per share for the last three months of 2002, compared with earnings of $225 million, or 29 cents per share, in the fourth quarter of 2001.

Excluding $434 million in one-time charges, Duke Energy posted earnings per share of 32 cents, which beat the consensus analyst estimate of 29 cents a share, according to Thomson First Call.

The one-time charges included a $194 million impairment of goodwill for European gas trading and $89 million in expenses at its Duke Power utility for December ice storms in the Carolinas.

Revenue rose 3.9 percent to $4 billion from $3.85 billion in the quarter.

Two weeks ago, Duke Energy warned the investment community that its earnings for 2002 and 2003 would be lower than it had previously forecast.

For the year, Duke earned $1.03 billion, or $1.22 a share, down from $1.9 billion, or $2.44 a share, a year ago. Revenue fell to $15.2 billion from $18.5 billion in 2001.

``All of the significant reductions in earnings are attributed to the merchant energy business,″ Priory said.

``Our primary concern is the pace of the economic recovery,″ he said. ``It points to another challenging year in 2003.″

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On the Net:

Duke Energy: http://www.duke-energy.com

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