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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 29, 1999
DUKE CAPITAL CORPORATION
(Exact name of Registrant as Specified in its Charter)
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<CAPTION>
<S> <C> <C>
DELAWARE 0-23977 51-0282142
(State or Other Jurisdiction of (Commission File Number) (IRS Employer Identification No.)
Incorporation)
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526 SOUTH CHURCH STREET
CHARLOTTE, NC 28202-1904
(Address of Principal Executive Offices)
(Zip code)
704-594-6200
(Registrant's telephone number, including area code)
<PAGE>
ITEM 2. ACQUISTION OR DISPOSITION OF ASSETS
On March 29, 1999, the registrant, through its wholly owned
subsidiaries, PanEnergy Corp and Texas Eastern Corporation, consummated the
previously announced sale of Panhandle Eastern Pipe Line Company (PEPL),
Trunkline Gas Company and additional storage related to those systems, along
with Trunkline LNG Company (Trunkline LNG), to CMS Energy Corporation (CMS). The
sales price of $2.2 billion involved cash proceeds of $1.9 billion and CMS's
assumption of existing PEPL debt of approximately $300 million. The sale
resulted in an extraordinary gain to the registrant of $660 million, net of
income tax of $404 million. Under the terms of the agreement with CMS, the
registrant is retaining certain assets and liabilities, such as the Houston
office building, certain environmental, legal and tax liabilities, and
substantially all intercompany balances. Management believes that the retention
of these items will not have a material adverse effect on consolidated results
of operations or financial position.
The sale described above was described in the registrant's Form 8-K
reports filed November 5, 1998 and January 25, 1999, as well as in the
registrant's Form 10-K for the year ended December 31, 1998 and the Form 10-Q
for the quarter ended March 31, 1999.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of businesses acquired.
None.
(b) Unaudited pro forma financial information.
The unaudited pro forma consolidated statements of income included as
Exhibit 99.1 combines the historical consolidated statements of income of the
registrant, after giving effect to the disposition of PEPL and Trunkline LNG as
if such disposition had occurred at January 1, 1998. The Unaudited Pro Forma
Consolidated Statements of Income from Continuing Operations included have been
prepared from, and should be read in conjunction with, the historical
consolidated financial statements of the registrant. The information contained
in Exhibit 99.1 is not necessarily indicative of the operating results that
would have occurred had the disposition been completed at January 1, 1998, nor
is it necessarily indicative of future operating results.
(c) Exhibits
Exhibit No. Exhibit
2 Stock Purchase Agreement between PanEnergy Corp,
Texas Eastern Corporation and CMS Energy Corporation,
dated as of October 31, 1998 (filed as Exhibit 10 to
Form 8-K of Duke Energy Corporation, File No.
1-4928, filed November 5, 1998).
99.1 Unaudited Pro Forma Consolidated Statements of Income
from Continuing Operations
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DUKE CAPITAL CORPORATION
(Registrant)
/s/ Richard J. Osborne
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Richard J. Osborne
Vice President and
Chief Financial Officer
/s/ Jeffrey L. Boyer
------------------------------
Jeffrey L. Boyer
June 1, 1999 Controller
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EXHIBIT INDEX
Exhibit No. Description
2 Stock Purchase Agreement between PanEnergy Corp,
Texas Eastern Corporation and CMS Energy Corporation,
dated as of October 31, 1998 (filed as Exhibit 10 to
Form 8-K of Duke Energy Corporation, File No. 1-4928,
filed November 5, 1998).
99.1 Unaudited Pro Forma Consolidated Statement of Income
from Continuing Operations for the year ended
December 31, 1998
Unaudited Pro Forma Consolidated Statement of Income
from Continuing Operations for the quarter ended
March 31, 1999
EXHIBIT 99.1
Duke Capital Corporation
Unaudited Pro Forma Consolidated Statement of Income from Continuing Operations
for the year ended December 31, 1998
(In millions)
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<CAPTION>
PEPL
Historical Disposition Pro Forma
---------- ----------- ---------
<S> <C> <C> <C>
OPERATING REVENUES
Sales, trading and marketing of natural gas and petroleum products... $ 7,854 $ - $ 7,854
Transportation and storage of natural gas............................ 1,450 (456) 994
Trading and marketing of electricity................................. 2,788 - 2,788
Other................................................................ 967 (26) (a) 941
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Total operating revenues............................................. 13,059 (482) 12,577
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OPERATING EXPENSES
Natural gas and petroleum products purchased......................... 7,497 (8) 7,489
Purchased power...................................................... 2,602 - 2,602
Other operation and maintenance...................................... 1,450 (188) (a) 1,262
Depreciation and amortization........................................ 385 (54) 331
Property and other taxes............................................. 89 (28) 61
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Total operating expenses............................................. 12,023 (278) 11,745
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OPERATING INCOME..................................................... 1,036 (204) 832
OTHER INCOME AND EXPENSES............................................ 101 (10) 91
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EARNINGS BEFORE INTEREST AND TAXES................................... 1,137 (214) 923
INTEREST EXPENSE..................................................... 237 (79) 158
MINORITY INTERESTS................................................... 71 - 71
------------ ----------- ---------
EARNINGS BEFORE INCOME TAXES......................................... 829 (135) 694
INCOME TAXES......................................................... 310 (56) 254
----------- ---------- ---------
INCOME FROM CONTINUING OPERATIONS.................................... $ 519 $ (79) $ 440
========== =========== =========
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(a) - Excludes intercompany building rental revenue, allocated corporate
expenses, building depreciation and certain other costs to be retained by
Duke Capital Corporation.
<PAGE>
EXHIBIT 99.1 (continued)
Duke Capital Corporation
Unaudited Pro Forma Consolidated Statement of Income from Continuing Operations
for the quarter ended March 31, 1999
(In millions)
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<CAPTION>
PEPL
Historical Disposition Pro Forma
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<S> <C> <C> <C>
OPERATING REVENUES
Sales, trading and marketing of natural gas and petroleum products... $ 2,014 $ - $ 2,014
Transportation and storage of natural gas............................ 379 (120) 259
Trading and marketing of electricity................................. 439 - 439
Other................................................................ 285 (6) (a) 279
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Total operating revenues............................................. 3,117 (126) 2,991
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OPERATING EXPENSES
Natural gas and petroleum products purchased......................... 1,940 (5) 1,935
Purchased power...................................................... 404 - 404
Other operation and maintenance...................................... 415 (32) (a) 383
Depreciation and amortization........................................ 89 (12) 77
Property and other taxes............................................. 32 (8) 24
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Total operating expenses............................................. 2,880 (57) 2,823
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OPERATING INCOME..................................................... 237 (69) 168
OTHER INCOME AND EXPENSES............................................ 35 (4) 31
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EARNINGS BEFORE INTEREST AND TAXES................................... 272 (73) 199
INTEREST EXPENSE..................................................... 65 (19) 46
MINORITY INTERESTS................................................... 29 - 29
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EARNINGS BEFORE INCOME TAXES.......................................... 178 (54) 124
INCOME TAXES.......................................................... 79 (19) 60
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INCOME FROM CONTINUING OPERATIONS..................................... $ 99 $ (35) $ 64
============== ========== ===========
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(a) - Excludes intercompany building rental revenue, allocated corporate
expenses, building depreciation and certain other costs to be retained by
Duke Capital Corporation.
