Cinergy Reports Record Earnings for 2001.Business Editors CINCINNATI--(BUSINESS WIRE)--Jan. 24, 2002 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. ) today reported 2001 record earnings of $2.75 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 earnings of $2.50 per share on a diluted basis in 2000 after previously reported one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. charges of $0.11 per share. In the fourth quarter 2001, Cinergy reported earnings of $0.69 per share compared with $0.58 per share in the same quarter 2000 after a previously reported one-time charge of $0.06 per share. The increase in quarterly earnings reflects continued strength in the company's energy merchant operations and on-going Adj. 1. on-going - currently happening; "an ongoing economic crisis" ongoing current - occurring in or belonging to the present time; "current events"; "the current topic"; "current negotiations"; "current psychoanalytic theories"; "the ship's current position" cost containment cost containment, n the features of a dental benefits program or of the administration of the program designed to reduce or eliminate certain charges to the plan. efforts across the company, offsetting lower 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. gross margins from mild weather and the economic recession. Revenues for the fourth quarter 2001 were $2.3 billion, bringing the annual total in 2001 to $12.9 billion compared with $8.4 billion in 2000. "We have worked hard to overcome the effects of mild weather throughout the year and the recession, which reduced industrial sales," 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 of Cinergy. "Our balanced portfolio provides flexibility and cushions the impact of changing economic and market conditions. While the energy sector was buffeted buf·fet 1 n. 1. A large sideboard with drawers and cupboards. 2. a. A counter or table from which meals or refreshments are served. b. A restaurant having such a counter. 3. by several high profile situations, our performance during the year helped us weather the turbulence turbulence, state of violent or agitated behavior in a fluid. Turbulent behavior is characteristic of systems of large numbers of particles, and its unpredictability and randomness has long thwarted attempts to fully understand it, even with such powerful tools as and deliver consistent results." "In December December: see month. , we completed a very successful sale of more than $300 million in mandatorily Adv. 1. mandatorily - in a manner that cannot be evaded; "the ministry considers that contributions to such a fund should be met from voluntary donations rather than from rates compulsorily levied." compulsorily, obligatorily convertible securities, a significant step in strengthening our balance sheet," Rogers said. "With our stronger balance sheet in 2002, we are focused on several new 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. initiatives and on continued growth of our energy merchant business." Other accomplishments during the year included: -- Successful implementation of the Ohio competition transition plan -- Extension of the purchased power tracker in Indiana through 2002 -- Doubling of earnings from customer-led originated transactions -- Operations meeting a new retail customer peak load of 11,094 megawatts -- Filing gas distribution rate cases in Ohio and Kentucky to recover capital expended for network expansions and improvements -- Indiana Utility Regulatory Commission approval to repower the company's Noblesville power plant, adding an incremental 200 megawatts -- Filing a certificate of need to transfer 700 megawatts of unregulated power to Indiana to serve growing customer demand For the fourth quarter of 2001, net income was $110.6 million, compared with $92.1 million in the fourth quarter a year ago, including a previously reported one-time charge. For the 12 months ended December 31, 2001, net income was $442.3 million, compared with net income of $399.5 million for the comparable period in 2000, including previously reported one-time charges. Energy Merchant segment earnings were $0.42 per share for the quarter compared with $.12 in the same period in 2000. 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 , marketing and trading gross margins were up $0.19 per share over the fourth quarter 2000, for a total increase of $0.46 per share for the year. Both the quarterly and annual increases were led primarily by growth in the segment's customer origination and gas trading operations. In addition, Cinergy Solutions, the segment's 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. business, added $0.01 per share in the quarter and $0.07 per share for the year. Results for the quarter from the Regulated Operations segment were $0.29 per share, compared with $0.49 a year earlier. Gross margins from regulated sales were down $0.15 per share primarily reflecting the mild weather and the economic recession, which led to a six percent decline in electricity sales and transportation and a 25 percent decline in gas sales and transportation. Results from the Power Technology and Infrastructure Services segment were up $0.01 from the same quarter a year ago and down $0.04 from the prior year due to interest on new investments and lower results from portfolio companies. Cinergy Corp. has a balanced, integrated portfolio consisting of two core businesses: energy merchant and regulated operations. Its energy merchant business is a 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 leader in low-cost generation owning 7,000 megawatts of capacity with a profitable balance of stable existing customer portfolios, new customer origination, marketing and trading, and industrial-site cogeneration. The "into Cinergy" power-trading hub is the most liquid trading hub in the nation. Cinergy also owns regulated delivery operations in Ohio, 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). , 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. that serve 1.5 million electric customers and about 500,000 gas customers. In addition, its Indiana regulated operations own 6,000 megawatts of generation. 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: financial information for the fourth quarter and year 2001.
CINERGY CORP.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
For the Periods Ended December 31, 2001
(unaudited)
(in thousands, except per share amounts)
----------------------------------------------------------------------
Quarter Ended
---------------------------
2001 2000
------------ ------------
Operating Revenues
Electric $ 1,407,666 $ 1,467,564
Gas 825,970 1,273,481
Other 16,666 28,543
------------ ------------
2,250,302 2,769,588
Operating Expenses
Fuel used in electric production 164,988 198,893
Gas purchased 764,296 1,183,581
Purchased and exchanged power 679,481 705,801
Other operation 204,416 255,925
Maintenance 45,542 45,489
Depreciation 100,264 88,949
Taxes other than income taxes 51,826 66,865
------------ ------------
2,010,813 2,545,503
Operating Income 239,489 224,085
Other Income and (Expenses) - Net
Allowance for equity funds used during
construction 3,465 1,146
Equity in earnings of
unconsolidated subsidiaries 5,766 (1,292)
Other - net 8,980 58
------------ ------------
18,211 (88)
Interest and Other Charges
Interest on long-term debt 63,155 51,219
Other interest 9,171 10,870
Allowance for borrowed funds
used during construction (4,578) (2,339)
------------ ------------
67,748 59,750
Preferred Trust
Preferred dividend requirement
of subsidiary trust 1,067 --
Income Before Taxes 188,885 164,247
Income Taxes 77,433 71,272
Preferred dividend requirements
of subsidiaries 858 877
------------ ------------
Net Income $ 110,594 $ 92,098
Other comprehensive income, net of tax (2,386) 43
------------ ------------
Comprehensive Income $ 108,208 $ 92,141
Average Common Shares Outstanding 159,291 158,968
Earnings Per Common Share
Net Income $ 0.70 $ 0.58
Earnings Per Common Share
- Assuming Dilution
Net Income $ 0.69 $ 0.58
Dividends Declared Per Common Share $ 0.45 $ 0.45
Year To Date
---------------------------
2001 2000
------------ ------------
Operating Revenues
Electric $ 8,181,233 $ 5,384,082
Gas 4,662,916 2,941,753
Other 78,388 96,129
------------ ------------
12,922,537 8,421,964
Operating Expenses
Fuel used in electric production 771,176 772,525
Gas purchased 4,431,899 2,674,449
Purchased and exchanged power 5,139,783 2,381,688
Other operation 829,757 914,250
Maintenance 202,274 205,129
Depreciation 378,140 343,949
Taxes other than income taxes 227,652 268,346
------------ ------------
11,980,681 7,560,336
Operating Income 941,856 861,628
Other Income and (Expenses) - Net
Allowance for equity funds used during
construction 8,628 5,813
Equity in earnings of
unconsolidated subsidiaries 2,266 5,048
Other - net 17,662 7,578
------------ ------------
28,556 18,439
Interest and Other Charges
Interest on long-term debt 218,939 205,748
Other interest 63,142 26,914
Allowance for borrowed funds
used during construction (13,954) (8,203)
------------ ------------
268,127 224,459
Preferred Trust
Preferred dividend requirement
of subsidiary trust 1,067 --
Income Before Taxes 701,218 655,608
Income Taxes 255,506 251,557
Preferred dividend requirements
of subsidiaries 3,433 4,585
------------ ------------
Net Income $ 442,279 $ 399,466
Other comprehensive income, net of tax (6,034) (1,154)
------------ ------------
Comprehensive Income $ 436,245 $ 398,312
Average Common Shares Outstanding 159,110 158,938
Earnings Per Common Share
Net Income $ 2.78 $ 2.51
Earnings Per Common Share
- Assuming Dilution
Net Income $ 2.75 $ 2.50
Dividends Declared Per Common Share $ 1.80 $ 1.80
CINERGY CORP.
CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands)
----------------------------------------------------------------------
December 31 December 31
2001 2000
------------ ------------
ASSETS
Current Assets
Cash and temporary
cash investments $ 111,067 $ 93,054
Restricted deposits 8,055 4,195
Notes receivable 31,173 35,945
Accounts receivable less
accumulated provision
for doubtful accounts of
$35,580 at December 31, 2001,
and $29,951 at December 31, 2000 1,123,214 1,623,402
Materials, supplies and fuel
- at average cost 240,812 159,340
Prepayments and other 110,311 129,666
Energy risk management
current assets 449,397 1,413,281
------------ ------------
Total current assets 2,074,029 3,458,883
Property, Plant, and Equipment
- at Cost
Utility plant in service 8,089,961 7,681,612
Construction work in progress 464,560 323,350
------------ ------------
Total utility plant 8,554,521 8,004,962
Non-regulated property, plant,
and equipment 4,527,994 3,401,203
Accumulated depreciation 4,845,620 4,586,089
------------ ------------
Net property, plant,
and equipment 8,236,895 6,820,076
Other Assets
Regulatory assets 1,015,863 976,614
Investments in unconsolidated
subsidiaries 339,059 538,322
Energy risk management
non-current assets 134,445 37,228
Other investments 164,155 146,986
Other 335,367 351,619
------------ ------------
Total other assets 1,988,889 2,050,769
Total Assets $ 12,299,813 $ 12,329,728
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable $ 1,029,173 $ 1,496,494
Accrued taxes 195,976 247,006
Accrued interest 56,216 47,351
Notes payable and other
short-term obligations 1,155,786 1,128,657
Long-term debt due within
one year 148,431 40,545
Energy risk management
current liabilities 429,794 1,456,375
Other 127,375 106,679
------------ ------------
Total current liabilities 3,142,751 4,523,107
Non-current Liabilities
Long-term debt 3,596,730 2,876,367
Deferred income taxes 1,301,407 1,185,968
Unamortized investment
tax credits 127,385 137,965
Accrued pension and other
post-retirement benefit costs 438,962 404,764
Energy risk management
non-current liabilities 135,619 97,507
Other 246,340 252,255
------------ ------------
Total non-current
liabilities 5,846,443 4,954,826
Total Liabilities 8,989,194 9,477,933
Preferred Trust Securities
Company obligated mandatorily
redeemable preferred trust
securities of subsidiary
holding solely debt securities
of the company 306,327 --
Cumulative Preferred Stock
of Subsidiaries
Not subject to
mandatory redemption 62,833 62,834
Common Stock Equity
Common stock - $0.01 par value;
authorized shares - 600,000,000;
outstanding shares - 159,402,839
at December 31, 2001, and
158,967,661 at December 31, 2000 1,594 1,590
Paid-in capital 1,619,659 1,619,153
Retained earnings 1,337,135 1,179,113
Accumulated other
comprehensive income (16,929) (10,895)
------------ ------------
Total common stock equity 2,941,459 2,788,961
Total Liabilities
and Equity $ 12,299,813 $ 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 Quarter Ended December 31
(unaudited)
(dollars in thousands, except per share amounts)
----------------------------------------------------------------------
2001 2000
---- ----
Energy Merchant
---------------
Gross Margins $ 211,735 $ 173,678
Earnings Before Interest
and Taxes (EBIT) $ 129,970 $ 53,142
Net Income $ 67,816 $ 19,413
Earnings Per Share -- diluted $ 0.42 $ 0.12
Electricity Trading
Volumes (Mwhs) 49,673,131 59,779,612
Physical and Financial
Gas Trading Volumes (Bcf/d) 51.4 27.5
Regulated Operations
--------------------
Gross Margins $ 405,421 $ 468,532
Earnings Before Interest
and Taxes (EBIT) $ 129,489 $ 175,772
Net Income $ 46,362 $ 78,820
Earnings Per Share -- diluted $ 0.29 $ 0.49
Electric Retail MWH Sales and
Transportation 11,743,189 12,503,023
Gas Retail MCF Sales and
Transportation 25,557,592 33,883,236
Electric Customers
(End of Period) 1,509,743 1,493,188
Gas Customers
(End of Period) 495,986 489,456
Power Technology &
Infrastructure Services
------------------------
Gross Margins $ 14,476 $ 23,403
Earnings Before Interest
and Taxes (EBIT) $ (1,759) $ (4,917)
Net Income $ (3,584) $ (6,135)
Earnings Per Share -- diluted $ (0.02) $ (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 Quarter Ended December 31, 2001
(unaudited)
----------------------------------------------------------------------
Energy Merchant
---------------
Earnings Per Share -- diluted -- 2000 $ 0.12
Origination, marketing and trading gross margins 0.19
Cinergy Solutions 0.01
Increased coal costs (0.01)
Increased interest (0.01)
Reduction in property taxes 0.03
EPA settlement 0.02
Decreased operation and maintenance expenses 0.11
Decreased gross margins from regulated supply (0.05)
Other -- net 0.01
Earnings Per Share -- diluted -- 2001 $ 0.42
Regulated Operations
--------------------
Earnings Per Share -- diluted -- 2000 $ 0.49
Decreased gross margins (0.15)
Decreased operation and maintenance expenses 0.02
Increased interest (0.02)
Accelerated amortization of regulatory assets (0.03)
EPA settlement 0.04
Other -- net (0.06)
Earnings Per Share -- diluted -- 2001 $ 0.29
Power Technology & Infrastructure Services
------------------------------------------
Earnings Per Share -- diluted -- 2000 $ (0.03)
Increased results from portfolio companies 0.01
Earnings Per Share -- diluted -- 2001 $ (0.02)
CINERGY CORP.
BUSINESS SEGMENT SUMMARY INFORMATION
For the Year to Date December 31
(unaudited)
(dollars in thousands, except per share amounts)
----------------------------------------------------------------------
2001 2000
---- ----
Energy Merchant
---------------
Gross Margins $ 774,329 $ 677,726
Earnings Before Interest
and Taxes (EBIT) $ 409,285 $ 242,494
Net Income $ 195,775 $ 111,734
Earnings Per Share -- diluted $ 1.22 $ 0.70
Electricity Trading Volumes (Mwhs) 256,103,755 167,254,198
Physical and Financial Gas Trading
Volumes (Bcf/d) 46.4 15.3
Regulated Operations
--------------------
Gross Margins $ 1,703,673 $ 1,795,229
Earnings Before Interest
and Taxes (EBIT) $ 575,241 $ 648,674
Net Income $ 265,285 $ 300,904
Earnings Per Share -- diluted $ 1.65 $ 1.88
Electric Retail MWH Sales
and Transportation 49,755,165 50,127,732
Gas Retail MCF Sales
and Transportation 89,886,977 100,464,916
Electric Customers (End of Period) 1,509,743 1,493,188
Gas Customers (End of Period) 495,986 489,456
Power Technology &
Infrastructure Services
------------------------
Gross Margins $ 49,312 $ 69,776
Earnings Before Interest
and Taxes (EBIT) $ (14,114) $ (11,101)
Net Income $ (18,781) $ (13,172)
Earnings Per Share -- diluted $ (0.12) $ (0.08)
For presentation purposes, certain consolidated income statement items
have been reclassified for segment reporting.
CINERGY CORP.
BUSINESS SEGMENT EARNINGS ANALYSIS SUMMARY
For the Year to Date December 31, 2001
(unaudited)
----------------------------------------------------------------------
Energy Merchant
---------------
Earnings Per Share -- diluted -- 2000 $ 0.70
Origination, marketing and trading
gross margins 0.46
Reduction in gross margins due to
lower generation availability (0.09)
Cinergy Solutions 0.07
Increased coal costs (0.08)
Increased interest (0.11)
Reduction in property taxes 0.13
EPA settlement 0.02
Decreased operation and maintenance expenses 0.17
Decreased gross margins from regulated supply (0.09)
Other -- net 0.04
Earnings Per Share -- diluted -- 2001 $ 1.22
Regulated Operations
--------------------
Earnings Per Share -- diluted -- 2000 $ 1.88
Reduced gross margins (0.18)
Decreased operation and maintenance expenses 0.08
Increased interest (0.04)
2000 early retirement charge 0.03
Accelerated amortization of regulatory assets (0.09)
EPA settlement 0.04
Other -- net (0.07)
Earnings Per Share -- diluted -- 2001 $ 1.65
Power Technology & Infrastructure Services
------------------------------------------
Earnings Per Share -- diluted -- 2000 $ (0.08)
Interest on new investments (0.02)
Lower results from portfolio companies (0.02)
Earnings Per Share -- diluted -- 2001 $ (0.12)
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