Duke Energy $300M Sr Unsec Notes Rated `A+' By Fitch IBCA.Business Editors NEW YORK--(BUSINESS WIRE)--March 7, 2000 Fitch IBCA IBCA International Braille Chess Association IBCA Institute of Burial and Cremation Administration IBCA Integrated Business Communications Alliance IBCA International Barbeque Cookers Association IBCA Department of Interior Board of Contract Appeals has assigned an `A+' rating to Duke Energy Corp.'s $300 million offering of senior unsecured notes. Proceeds will be used to retire outstanding securities and for general corporate purposes. The ratings reflect Duke Energy's ample equity base and cash flow, the good quality of its assets and management team and the continued reliance on regulated businesses for a majority of earnings before interest and taxes In financial and business accounting, earnings before interest and taxes (EBIT) is a measure of a firm's profitability that excludes interest and income tax expenses.[1] EBIT = Operating Revenue – Operating Expenses + Non-operating Income (EBIT EBIT See: Earnings Before Interest and Taxes EBIT See earnings before interest and taxes (EBIT). ). However, the current ratings are under some pressure due to the company's aggressive investment strategy and entry into higher risk energy markets. Over time the company's emphasis on global investments will reduce the percentage of earnings derived from regulated operations. Currently regulated electric utility operations account for about 62% of EBIT and natural gas transmission (largely FERC FERC Federal Energy Regulatory Commission FERC FEMA Emergency Response Capability regulated) about 22%. While capital spending on non-regulated activities could be substantial, a significant portion will be discretionary. For the 12-months ended Sept. 30, 1999, the company was conservatively capitalized and generated strong cash flow and interest protection measures. Total debt accounted for about 45% of total capital, and equity about 55%. EBIT/ interest coverage was 5.0 times (x) and EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become interest coverage 6.75x. Cash flow to average total debt was a healthy 31%. |
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