On June 18, 1997, Duke Power Company (Duke Power) changed its name to Duke Energy Corporation
(the Corporation) in accordance with the terms of a merger agreement with PanEnergy Corp
(PanEnergy), pursuant to which the Corporation issued 158.3 million shares of its common stock
in exchange for all of the outstanding common stock of PanEnergy (the merger). PanEnergy was
involved in the gathering, processing, transportation and storage of natural gas, the production
of natural gas liquids and the marketing of natural gas, electricity, liquefied petroleum gases
and related energy services. Pursuant to the merger, each share of PanEnergy common stock outstanding was converted into the right to receive 1.0444 shares of the Corporation’s common
stock. In addition, each outstanding option to purchase PanEnergy common stock became an
option to purchase common stock of the Corporation, adjusted accordingly.
As a result of the merger, the Corporation is an integrated energy and energy services provider with the ability to offer physical delivery and management of both electricity and natural gas throughout the United States and abroad. The Corporation provides these services through four business segments: Electric Operations, Natural Gas Transmission, Energy Services, and Other Operations.
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The Electric Operations segment is engaged in the generation, transmission, distribution and sale of electric energy in central and western North Carolina and the western portion of South Carolina. These electric operations are subject to the rules and regulations of the Federal Energy Regulatory Commission (FERC), the North Carolina Utilities Commission (NCUC) and The Public Service Commission of South Carolina (PSCSC). |
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The Natural Gas Transmission segment is involved in interstate transportation and storage of natural gas for customers primarily in the Mid-Atlantic, New England and Midwest states. The interstate natural gas transmission and storage operations are also subject to the rules and regulations of the FERC.
The Energy Services segment is comprised of several separate business units: Field Services gathers and processes natural gas, produces and markets natural gas liquids and transports and trades crude oil; Trading and Marketing markets natural gas, electricity and other energy-related products; Global Asset Development develops, owns and operates energy-related facilities worldwide; and Other Energy Services provides engineering consulting, construction and integrated energy solutions.
Other Operations include the real estate operations of Crescent Resources, Inc. (Crescent Resources), communications services, corporate costs and intersegment eliminations.
The merger was accounted for as a pooling of interests and, accordingly, the Consolidated Financial Statements included in this Annual Report are presented as if the merger was consummated as of the beginning of the earliest period presented. Portions of the following discussion provide information related to material changes in the Corporation’s consolidated results of operations and financial condition between the periods presented, based on the combined historical information of Duke Power and PanEnergy.
Management’s Discussion and Analysis should be read in conjunction with the Consolidated Financial Statements of the Corporation.
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