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Duke Sees Charge on Sale

The company is planning on a noncash, pretax charge of roughly $1.3 billion.
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Duke Energy's

(DUK) - Get Report

board approved a plan to pursue the sale or disposal of Duke Energy North America's physical and commercial assets outside the Midwest.

The decision will result in a noncash, pretax charge of roughly $1.3 billion, or 88 cents a share.

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Duke will report the charge in third quarter. The company said in a press release that it's "revising its 2005 earnings per share (EPS) target for employee incentive bonuses, which should track ongoing basic EPS, from $1.60 to $1.65."

The assets that will be shed include roughly 6,200 megawatts of power generation mostly in the western and northeastern U.S., as well as the North American operation's trading book. The assets will be unloaded within the next 12 months.

Duke said Tuesday that reaching the target of having the business break even by the end of 2006 "is not realistic without taking on an extraordinary amount of additional risk." The company said it plans to stay active in the merchant power sector.

Duke expects to combine the North American operation's existing Midwest assets, around 3,600 megawatts of power generation, with

Cinergy's

(CIN)

commercial business. Duke and Cinergy are planning to merge.