Results of Operations
Trading and Marketing
Years Ended December 31,
(Dollars in millions) 1998 1997 1996
Operating Revenues $ 8,785 $ 7,489 $ 3,814
Operating Expenses 8,665 7,446 3,758
Operating Income 120 43 56
Other Income, Net of Expenses 2 1 2
EBIT $ 122 $ 44 $ 58
Volumes
Natural Gas Marketed, TBtu/d 8.0 6.9 5.5
Electricity Marketed, GWh 98,991 64,650 4,229
 

In 1998, earnings before interest and taxes for Trading and Marketing increased $78 million over 1997. The increase resulted primarily from increased financial trading margins and electricity margins, partially offset by increased expenses due to business growth. Electricity volumes marketed increased primarily as a result of acquiring the remaining 50% ownership interest in the Duke/Louis Dreyfus, L.L.C. (D/LD) joint venture in June 1997.

Earnings before interest and taxes for Trading and Marketing decreased $14 million in 1997 compared to 1996. The acquisition of the remaining 50% ownership interest in the D/LD joint venture in 1997, coupled with a full year of operations of the joint venture with Mobil Corporation formed in August 1996, accounted for the significant increases in Trading and Marketing revenues, related operating expenses (including increased purchased power expense) and volumes in 1997 over 1996. Increased natural gas volumes marketed of 25.5% in 1997, in addition to increased natural gas margins from trading activities, were largely offset by the emerging electric power trading and marketing activities. Higher operating expenses, due primarily to increased personnel levels and system development costs to provide the necessary infrastructure for growth in the trading and marketing business, resulted in a decrease in earnings before interest and taxes in 1997 as compared to 1996.