Cinergy Reports Earnings of $0.75 Cents Per Share; Revenues Increase 134% in the First Quarter.Business Editors CINCINNATI--(BUSINESS WIRE)--April 26, 2001 Cinergy Cinergy Corp. was an energy company based in Cincinnati, Ohio. Cinergy was created on October 24, 1994, from the merger of the Cincinnati Gas & Electric Company (CG&E) with PSI Energy and later included Union Light, Heat & Power (ULH&P) as well. Corp. (NYSE NYSE See: New York Stock Exchange :CIN CIN cervical intraepithelial neoplasia. Cervical intraepithelial neoplasia (CIN) A term used to categorize degrees of dysplasia arising in the epithelium, or outer layer, of the cervix. ) announced today earnings for the first quarter 2001 of $0.75 per share on a diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. basis, compared with 2000 first quarter earnings of $0.87 per share. Revenues for the quarter were up 134% primarily from the energy merchant segment led by a doubling of electricity trading volumes Trading volume The number of shares transacted every day. As there is a seller for every buyer, one can think of the trading volume as half of the number of shares transacted. That is, if A sells 100 shares to B, the volume is 100 shares. , a 24-fold increase in gas trading volumes, and origination Origination The process through which a mortgage lender creates a mortgage secured by some amount of the mortgagor's real property. Notes: Also known as loan origination, everyone must go through the origination process when securing a mortgage for a piece of real and consummation CONSUMMATION. The completion of a thing; as the consummation of marriage; (q.v.) the consummation of a contract, and the like. 2. A contract is said to be consummated, when everything to be done in relation to it, has been accomplished. of seven new wholesale contracts. While the energy merchant segment equaled last year's earnings per share, the origination, marketing and trading portion added $0.11 per share. The company also continued to expand its energy merchant base through the completion of the acquisition of two natural gas-fired gas-fired adj → de gas gas-fired adj → au gaz gas-fired adj (heater etc) → Gas- peaking facilities in Tennessee Tennessee, state, United States Tennessee (tĕn`əsē', tĕn'əsē`), state in the south-central United States. and Mississippi Mississippi, state, United States Mississippi (mĭs'əsĭp`ē), one of the Deep South states of the United States. It is bordered by Alabama (E), the Gulf of Mexico (S), Arkansas and Louisiana, with most of the border formed by and the agreement to build two cogeneration cogeneration In power systems, use of steam for both power generation and heating. High-temperature, high-pressure steam from a boiler and superheater first passes through a turbine to produce power. power projects with BP in Texas. In addition, the Indiana Indiana, state, United States Indiana, midwestern state in the N central United States. It is bordered by Lake Michigan and the state of Michigan (N), Ohio (E), Kentucky, across the Ohio R. (S), and Illinois (W). Utility Regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. Commission (IURC IURC Indiana Utility Regulatory Commission ) approved construction of a 130-megawatt gas-fired peaking facility in Henry County, Indiana Henry County is a county located in the U.S. state of Indiana. As of 2000, the population was 48,508. The county seat is New Castle6. Henry County is regarded as the main inspiration for the setting of the novel Raintree County by Ross Lockridge, Jr.. . The company owns 50% of this facility. These gains were offset by a decrease in the generation component of residential rates in Ohio and less generation available to market due to environmental control equipment installation at the company's largest power plant. In addition, the energy merchant segment's supply portfolio has changed, as a favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. mark-to-market Mark-to-market Adjustment of the book value or collateral value of a security to reflect current market value. contract length in 2000 has been replaced by owned megawatts of gas-fired asset peaking length in 2001. Utilization utilization, n 1. the extent to which a given group uses a particular service in a specified period. Although usually expressed as the number of services used per year per 100 or per 1000 persons eligible for the service, utilization rates may be of these assets will occur primarily during the summer peaking season and will be reflected in third quarter results. "The balance in our energy merchant segment was highlighted in the first quarter as origination, marketing and trading continued its growth trajectory Trajectory The curve described by a body moving through space, as of a meteor through the atmosphere, a planet around the Sun, a projectile fired from a gun, or a rocket in flight. and compensated compensated /com·pen·sat·ed/ (kom´pen-sa?tid) counterbalanced; offset. for some of the effects of the Ohio transition plan as well as reduced generation availability. We are on track to meet our earnings per share target of $2.75 in 2001," said James James, person in the Bible James, in the Gospel of St. Luke, kinsman of St. Jude. The original does not specify the relationship. James, rivers, United States James. E. Rogers, chairman, president and chief executive officer. "Our energy merchant business is responding to the needs of the marketplace and is a major player in the wholesale energy business. Our completed acquisition of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 1,000 megawatts of peaking capacity in the South is a key element of our growth by extending our regional leadership position beyond the Midwest Midwest or Middle West, region of the United States centered on the western Great Lakes and the upper-middle Mississippi valley. It is a somewhat imprecise term that has been applied to the northern section of the land between the Appalachians ." Results from the regulated reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. segment were $0.09 cents below last year due to increased regulatory asset amortization and lower gross margins as reduced industrial demand from the economic slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. offset favorable weather. The increased amortization is the result of certain existing regulatory asset recovery periods being compressed into the ten-year recovery period approved in the Ohio transition plan. In the first quarter, negotiations and hearings were conducted at the IURC on PSI Energy's proposal to extend its purchased power tracker to future years. In April, the purchased power tracker was approved and extended by the IURC through the summer of 2002. Results from the power technology and infrastructure services segment were $0.03 lower primarily because of higher operating costs operating costs npl → gastos mpl operacionales and interest expense related to new investments. The segment continues to add new customers and transactions more than twice the level of the previous year. Net income for the first quarter 2001 was $120.2 million, compared with $138.4 million in the first quarter a year ago. Cinergy's first quarter earnings data is presented in a different format than in past years. The company is reporting earnings contributions as well as other selected financial and operating statistics for each of its separate business segments. This should allow shareholders to better analyze an·a·lyze v. 1. To examine methodically by separating into parts and studying their interrelations. 2. To separate a chemical substance into its constituent elements to determine their nature or proportions. 3. company performance. Energy merchant segment results include non-regulated generation, affiliate Affiliate Relationship between two companies when one company owns substantial interest, but less than a majority of the voting stock of another company, or when two companies are both subsidiaries of a third company. See: Subsidiaries, parent company. sales to Ohio and Kentucky Kentucky, state, United States Kentucky (kəntŭk`ē, kĭn–), one of the so-called border states of the S central United States. It is bordered by West Virginia and Virginia (E); Tennessee (S); the Mississippi R. regulated energy delivery operations, and origination, marketing and trading results. The regulated segment includes all Indiana operations and other domestic and international energy delivery operations. The power technology and infrastructure services segment includes Cinergy Ventures, the company's technology investment subsidiary, as well as other energy infrastructure services businesses. Cinergy Corp., one of the nation's leading diversified diversified (di·verˑ·s energy companies, has a focused strategy intent on growing its energy merchant business. Its energy merchant business owns, operates or has under development over 21,000 megawatts of generation. Cinergy has the sixth largest electricity trading organization in the U.S. as well as physical and financial gas trading capabilities of 35 bcf/day. The "into Cinergy" power trading hub is the most liquid trading hub in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . Cinergy's energy merchant business operates in several regions of the U.S. and is based on a profitable balance of asset development, customer origination, marketing and trading, and industrial-site cogeneration infrastructure development. Cinergy also owns regulated operations in Ohio, Indiana, and Kentucky that serve about 1.5 million electric customers and about 500,000 gas customers. In addition, Cinergy manages one of the industry's top power technology portfolios. Statements made in this release that convey convey v. to transfer title (official ownership) to real property (or an interest in real property) from one (grantor) to another (grantee) by a written deed (or an equivalent document such as a judgment of distribution which conveys real property from an estate). the company's or management's intentions, expectations or predictions of the future are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . The company's actual results could differ materially from those projected in the forward-looking statements, and there can be no assurance that estimates of future results will be achieved. Please refer to the company's SEC filings for additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements. Following are summaries of Cinergy's unaudited consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: and segmented financial information for the first quarter 2001.
CINERGY CORP.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
For the Period Ended March 31, 2001
(unaudited)
(in thousands, except per share amounts)
------------------------------------------------------------------
Quarter Ended
--------------------------
2001 2000
----------- -----------
Operating Revenues
Electric $ 1,874,685 $ 1,066,697
Gas 1,813,822 498,728
Other 18,022 17,652
----------- -----------
3,706,529 1,583,077
Operating Expenses
Fuel used in electric production 199,928 186,091
Gas purchased 1,710,610 406,145
Purchased and exchanged power 1,145,953 314,687
Other operation 205,137 201,631
Maintenance 44,353 51,296
Depreciation 88,564 82,631
Taxes other than income taxes 63,092 66,131
----------- -----------
3,457,637 1,308,612
Operating Income 248,892 274,465
Other Income and (Expenses) - Net
Allowance for equity funds
used during construction 1,143 902
Equity in earnings of
unconsolidated subsidiaries (1,239) 1,842
Other - net (5,837) (3,405)
----------- -----------
(5,933) (661)
Interest and Other Charges
Interest on long-term debt 48,606 52,404
Other interest 18,925 1,180
Allowance for borrowed funds
used during construction (3,981) (2,154)
Preferred dividend requirements
of subsidiaries 858 1,363
----------- -----------
64,408 52,793
Income Before Taxes 178,551 221,011
Income Taxes 58,304 82,572
----------- -----------
Net Income $ 120,247 $ 138,439
Other comprehensive income,
net of tax (4,461) (771)
----------- -----------
Comprehensive Income $ 115,786 $ 137,668
Average Common Shares Outstanding 158,989 158,923
Earnings Per Common Share
Net Income $ 0.76 $ 0.87
Earnings Per Common Share
- Assuming Dilution
Net Income $ 0.75 $ 0.87
Dividends Declared Per Common Share $ 0.45 $ 0.45
CINERGY CORP.
CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands)
--------------------------------------------------------------------
March 31 December 31
2001 2000
------------ ------------
ASSETS
Current Assets
Cash and temporary cash investments $ 187,491 $ 93,054
Restricted deposits 8,021 4,195
Notes receivable 31,655 35,945
Accounts receivable less
accumulated provision
for doubtful accounts of
$39,480 at March 31, 2001,
and $29,951 at December 31, 2000 1,853,313 1,623,402
Materials, supplies and fuel
- at average cost 161,952 159,340
Prepayments and other 133,028 129,666
Energy risk management current assets 1,044,763 1,413,281
------------ ------------
Total current assets 3,420,223 3,458,883
Property, Plant, and Equipment
- at Cost
Utility plant in service 7,772,840 7,681,612
Construction work in progress 358,452 323,350
------------ ------------
Total Utility Plant 8,131,292 8,004,962
Non-regulated property,
plant, and equipment 3,975,889 3,401,203
Accumulated depreciation 4,642,983 4,586,089
------------ ------------
Net Property, Plant,
and Equipment 7,464,198 6,820,076
Other Assets
Regulatory assets 972,705 976,614
Investments in unconsolidated
subsidiaries 529,339 538,322
Energy risk management
non-current assets 65,984 37,228
Other investments 150,327 146,986
Other 334,760 351,619
------------ ------------
Total other assets 2,053,115 2,050,769
Total Assets $ 12,937,536 $ 12,329,728
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable $ 1,708,847 $ 1,496,494
Accrued taxes 286,263 247,006
Accrued interest 59,211 47,351
Notes payable and other
short-term obligations 1,809,080 1,128,657
Long-term debt due within one year 44,149 40,545
Energy risk management
current liabilities 1,073,819 1,456,375
Other 81,078 106,679
------------ ------------
Total current liabilities 5,062,447 4,523,107
Non-current Liabilities
Long-term debt 2,887,702 2,876,367
Deferred income taxes 1,190,221 1,185,968
Unamortized investment tax credits 134,134 137,965
Accrued pension and other
post-retirement benefit costs 410,308 404,764
Energy risk management
non-current liabilities 121,529 97,507
Other 233,209 252,255
------------ ------------
Total non-current liabilities 4,977,103 4,954,826
Total Liabilities 10,039,550 9,477,933
Cumulative Preferred
Stock of Subsidiaries
Not subject to mandatory redemption 62,834 62,834
Common Stock Equity
Common stock - $0.01 par value;
authorized shares - 600,000,000;
outstanding shares -
159,001,531 at March 31, 2001,
and 158,967,661 at December 31, 2000 1,590 1,590
Paid-in capital 1,619,366 1,619,153
Retained earnings 1,229,552 1,179,113
Accumulated other comprehensive income (15,356) (10,895)
------------ ------------
Total common stock equity 2,835,152 2,788,961
Total Liabilities and Equity $ 12,937,536 $ 12,329,728
Note: Prior year's data has been reclassified to conform with current
year's presentation.
CINERGY CORP.
BUSINESS SEGMENT SUMMARY INFORMATION
For the Period Ended March 31, 2001
(unaudited)
(in thousands, except per share amounts)
-----------------------------------------------------------------
2001 2000
------------ ------------
Energy Merchant
--------------
Gross Margins $ 168,090 $ 166,607
Earnings Before Interest
and Taxes (EBIT) $ 86,857 $ 74,249
Net Income $ 39,295 $ 40,186
Earnings Per Share - diluted $ 0.25 $ 0.25
Electricity Trading
Volumes (Millions of Mwhs) 60,725,473 29,492,208
Physical and Financial
Gas Trading Volumes (Bcf/d) 35.2 1.4
Regulated Operations
--------------------
Gross Margins $ 449,884 $ 481,021
Earnings Before Interest
and Taxes (EBIT) $ 160,094 $ 199,196
Net Income $ 85,750 $ 98,863
Earnings Per Share - diluted $ 0.53 $ 0.62
Electric Retail KWH
Sales and Transportation 12,582,247 12,232,515
Gas Retail MCF Sales
and Transportation 39,424 39,841
Electric Customers (End of Period) 1,507,090 1,473,075
Gas Customers (End of Period) 497,190 482,082
Power Technology &
Infrastructure Services
------------------------
Gross Margins $ 14,441 $ 13,547
Earnings Before Interest
and Taxes (EBIT) $ (3,992) $ 359
Net Income $ (4,798) $ (610)
Earnings Per Share - diluted $ (0.03) $ --
For presentation purposes, certain consolidated income statement items
have been reclassified for segment reporting
CINERGY CORP.
BUSINESS SEGMENT EARNINGS ANALYSIS SUMMARY
For the Period Ended March 31, 2001
(unaudited)
---------------------------------------------------------
Energy Merchant
---------------
Earnings Per Share - diluted - 2000 $ 0.25
Origination, marketing, and trading 0.11
International portfolio 0.02
Contract length positive mark-to-market
in 2000 vs. physical length in 2001 (0.07)
Reduction in second call margins due
to lower generation availability (0.03)
Reduction in generation component
of affiliate residential rates (0.01)
(Other, net) (0.02)
Earnings Per Share - diluted - 2001 $ 0.25
Regulated
---------
Earnings Per Share - diluted - 2000 $ 0.62
Reduced gross margin (0.03)
Increased reserve for uncollectible accounts (0.02)
Accelerated amortization of regulatory assets (0.02)
Increased depreciation (0.02)
Earnings Per Share - diluted - 2001 $ 0.53
Power Technology & Infrastructure Services
------------------------------------------
Earnings Per Share - diluted - 2000 $ --
Interest on new investments (0.01)
Operating expenses (0.02)
Earnings Per Share - diluted - 2001 $ (0.03)
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