Summary
Duke Energy Corporation (DUK) has entered into an agreement to form a joint venture for its wholly-owned subsidiary, DukeNet Communications, LLC. The other 50% stake in the joint venture will be held by Alinda Capital Partners, LLC, which will also contribute $137 million in cash to Duke Energy. This transaction is expected to result in a GAAP gain, though it will be treated as a special item and excluded from the company's adjusted earnings. Investors should note that the closing of this transaction is anticipated during the third quarter of 2010. While the cash infusion and the GAAP gain are positive developments, the exclusion of the gain from adjusted earnings suggests that management does not view it as reflective of ongoing operational performance. Further details are available in the press release attached as an exhibit to this filing.
Key Highlights
- 1Duke Energy is forming a joint venture for its DukeNet Communications subsidiary.
- 2Alinda Capital Partners will own the other 50% of the joint venture.
- 3Alinda Capital Partners will pay Duke Energy $137 million in cash.
- 4The transaction is expected to generate a GAAP gain.
- 5The GAAP gain will be treated as a special item and excluded from adjusted earnings.
- 6The transaction is anticipated to close in the third quarter of 2010.