Cinergy Third Quarter Earnings Increase by 38 Percent.Business Editors CINCINNATI--(BUSINESS WIRE)--Oct. 25, 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 third quarter 2001 of $0.80 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, a 38 percent increase over 2000 earnings of $0.58 per share. The higher third quarter results were attributed to an increase in 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 within the Energy Merchant segment. In addition, Cinergy realized higher gross margins from customer growth, increased customer usage, and warmer weather in 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. Operations segment. "The growth of our core businesses in the third quarter reflected the value of our balanced, integrated corporate portfolio," 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. "We were able to increase customer origination on the wholesale side as well as meet the record demand of our retail customers." Cinergy set a new record service area peak for electric demand of 11,094 megawatts on August 8, exceeding the previous peak of 10,873 megawatts set in July July: see month. 1999. Peak loads in excess of 10,000 megawatts were reached on 20 days in the third quarter, compared with four days in the third quarter of 2000. Rogers added, "Our demand has continued to grow and by adding about 1,800 megawatts of generating assets over the past two years, we have positioned ourselves to meet growing customer needs in both the retail and wholesale markets. Our solid quarter results increase our confidence in our ability to meet our 2001 earnings goal of $2.75 per share." Net income in the third quarter 2001 was $128.5 million, up from $93.8 million in the comparable period a year ago. For the nine months ended September September: see month. 30, 2001, net income and diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of were $331.7 million and $2.06, respectively, compared with $307.4 million and $1.92 in the same period a year ago. Energy Merchant segment earnings were $0.37 per share for the quarter, more than doubling last year's quarterly results. Origination, marketing and trading gross margins were up $0.07 per share over the third quarter 2000 for a total increase of $0.27 per share year to date. 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. increased about 150 percent with physical and financial gas trading volumes up 160 percent over the same time period. 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 $0.03 per share in the quarter and is up $0.06 per share year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. . Results for the quarter from the Regulated Operations segment were $0.48 per share, $0.02 above last year. Gross margins improved due to increased customer demand from service territory growth and warmer weather. This was offset slightly by increased operations and maintenance and interest expenses. Results from the Power Technology and Infrastructure Services segment were down $0.02 from the prior year. Cinergy Corp. has a balanced, integrated portfolio consisting of two core businesses: energy merchant and regulated operations. Its energy merchant business owns 7,000 megawatts of generation and has the eighth largest electricity trading organization 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. as well as physical and financial gas trading volumes of over 45 bcf/day. The "into Cinergy" power-trading hub is the most liquid trading hub in the nation. Cinergy's energy merchant business is based on a profitable balance of stable existing customer portfolios, new customer origination, marketing and trading, and industrial-site cogeneration. 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 about 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.
CINERGY CORP.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
For the Periods Ended September 30, 2001
(unaudited)
(in thousands, except per share amounts)
----------------------------------------------------------------------
Quarter Ended Year To Date
--------------------- ---------------------
2001 2000 2001 2000
---------- ---------- ---------- ----------
Operating Revenues
Electric $2,515,665 $1,599,468 $6,773,567 $3,916,518
Gas 786,345 677,917 3,836,946 1,668,272
Other 21,604 22,400 61,722 67,586
---------- ---------- ---------- ----------
3,323,614 2,299,785 10,672,235 5,652,376
Operating Expenses
Fuel used in electric
production 210,345 181,282 606,188 573,632
Gas purchased 761,325 634,917 3,667,603 1,490,868
Purchased and exchanged
power 1,654,649 866,907 4,460,302 1,675,887
Other operation 214,764 219,450 625,341 658,325
Maintenance 50,754 48,004 156,732 159,640
Depreciation 97,109 86,562 277,876 255,000
Taxes other than
income taxes 59,325 66,892 175,826 201,481
---------- ---------- ---------- ----------
3,048,271 2,104,014 9,969,868 5,014,833
Operating Income 275,343 195,771 702,367 637,543
Other Income and
(Expenses) - Net
Allowance for equity
funds used during
construction 1,944 1,567 5,163 4,667
Equity in earnings of
unconsolidated
subsidiaries (4,333) 165 (3,500) 6,340
Other - net 3,422 10,506 8,682 7,520
---------- ---------- ---------- ----------
1,033 12,238 10,345 18,527
Interest and Other Charges
Interest on long-term debt 57,653 50,321 155,784 154,529
Other interest 14,406 11,822 53,971 16,044
Allowance for borrowed
funds used during
construction (3,297) (1,977) (9,376) (5,864)
Preferred dividend
requirements of
subsidiaries 859 1,070 2,575 3,708
---------- ---------- ---------- ----------
69,621 61,236 202,954 168,417
Income Before Taxes 206,755 146,773 509,758 487,653
Income Taxes 78,284 52,959 178,073 180,285
---------- ---------- ---------- ----------
Net Income $128,471 $93,814 $331,685 $307,368
Other comprehensive
income, net of tax 2,384 (5,622) (3,648) (1,197)
---------- ---------- ---------- ----------
Comprehensive Income $130,855 $88,192 $328,037 $306,171
Average Common Shares
Outstanding 159,097 158,938 159,049 158,928
Earnings Per Common Share
Net Income $0.81 $0.59 $2.08 $1.93
Earnings Per Common Share
- Assuming Dilution
Net Income $0.80 $0.58 $2.06 $1.92
Dividends Declared Per
Common Share $0.45 $0.45 $1.35 $1.35
CINERGY CORP.
CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands)
----------------------------------------------------------------------
September 30 December 31
2001 2000
----------- -----------
ASSETS
Current Assets
Cash and temporary cash investments $147,781 $93,054
Restricted deposits 10,927 4,195
Notes receivable 29,426 35,945
Accounts receivable less accumulated
provision for doubtful accounts of
$37,693 at September 30, 2001, and
$29,951 at December 31, 2000 1,740,986 1,623,402
Materials, supplies and fuel - at
average cost 228,132 159,340
Prepayments and other 168,655 129,666
Energy risk management current assets 629,006 1,413,281
----------- -----------
Total current assets 2,954,913 3,458,883
Property, Plant, and Equipment - at Cost
Utility plant in service 8,019,141 7,681,612
Construction work in progress 374,016 323,350
----------- -----------
Total utility plant 8,393,157 8,004,962
Non-regulated property, plant,
and equipment 4,474,415 3,401,203
Accumulated depreciation 4,791,878 4,586,089
----------- -----------
Net property, plant, and equipment 8,075,694 6,820,076
Other Assets
Regulatory assets 999,759 976,614
Investments in unconsolidated subsidiaries 198,092 538,322
Energy risk management non-current assets 132,840 37,228
Other investments 151,893 146,986
Other 299,427 351,619
----------- -----------
Total other assets 1,782,011 2,050,769
Total Assets $12,812,618 $12,329,728
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable $1,607,656 $1,496,494
Accrued taxes 275,092 247,006
Accrued interest 70,740 47,351
Notes payable and other short-term
obligations 1,210,970 1,128,657
Long-term debt due within one year 80,631 40,545
Energy risk management current liabilities 632,383 1,456,375
Other 129,871 106,679
----------- -----------
Total current liabilities 4,007,343 4,523,107
Non-current Liabilities
Long-term debt 3,682,965 2,876,367
Deferred income taxes 1,224,065 1,185,968
Unamortized investment tax credits 129,582 137,965
Accrued pension and other post-retirement
benefit costs 431,001 404,764
Energy risk management non-current
liabilities 153,766 97,507
Other 211,024 252,255
----------- -----------
Total non-current liabilities 5,832,403 4,954,826
Total Liabilities 9,839,746 9,477,933
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 - 159,099,158 at
September 30, 2001, and 158,967,661
at December 31, 2000 1,591 1,590
Paid-in capital 1,625,343 1,619,153
Retained earnings 1,297,648 1,179,113
Accumulated other comprehensive income (14,543) (10,895)
----------- -----------
Total common stock equity 2,910,039 2,788,961
Total Liabilities and Equity $12,812,618 $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 September 30
(unaudited)
(dollars in thousands, except per share amounts)
---------------------------------------------------------------------
2001 2000
------------- -------------
Energy Merchant
---------------
Gross Margins $ 217,146 $ 174,057
Earnings Before
Interest and Taxes (EBIT) $ 119,796 $ 57,575
Net Income $ 58,354 $ 23,235
Earnings Per Share
- diluted $ 0.37 $ 0.15
Electricity Trading
Volumes (Mwhs) 86,398,499 34,559,702
Physical and Financial
Gas Trading Volumes (Bcf/d) 48.1 18.6
Regulated Operations
--------------------
Gross Margins $ 453,120 $ 417,209
Earnings Before
Interest and Taxes (EBIT) $ 163,651 $ 154,214
Net Income $ 77,277 $ 74,451
Earnings Per Share
- diluted $ 0.48 $ 0.46
Electric Retail MWH Sales
and Transportation 13,898,726 13,412,182
Gas Retail MCF Sales and
Transportation 10,248,332 11,487,389
Electric Customers
(End of Period) 1,500,790 1,481,411
Gas Customers
(End of Period) 489,667 482,328
Power Technology &
Infrastructure Services
-------------------------
Gross Margins $ 9,811 $ 16,974
Earnings Before
Interest and Taxes (EBIT) $ (7,071) $ (3,780)
Net Income $ (7,160) $ (3,872)
Earnings Per Share
- diluted $ (0.05) $ (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 September 30, 2001
(unaudited)
---------------------------------------------------------------------
Energy Merchant
---------------
Earnings Per Share - diluted - 2000 $ 0.15
Origination, marketing and
trading gross margins 0.07
Reduction in gross margins due
to lower generation availability (0.02)
Contract length mark-to-market in
2000 vs. physical length in 2001 0.08
Cinergy Solutions 0.03
Increased coal costs (0.01)
Increased interest (0.01)
Reduction in property taxes 0.04
Other - net 0.04
Earnings Per Share - diluted - 2001 $ 0.37
Regulated Operations
--------------------
Earnings Per Share - diluted - 2000 $ 0.46
Increased gross margins 0.11
Increased operation and maintenance expenses (0.02)
Increased interest (0.02)
Accelerated amortization of regulatory assets (0.02)
Other - net (0.03)
Earnings Per Share - diluted - 2001 $ 0.48
Power Technology & Infrastructure Services
------------------------------------------
Earnings Per Share - diluted - 2000 $ (0.03)
Lower results from portfolio companies (0.02)
Earnings Per Share - diluted - 2001 $ (0.05)
CINERGY CORP.
BUSINESS SEGMENT SUMMARY INFORMATION
For the Year to Date September 30
(unaudited)
(dollars in thousands, except per share amounts)
---------------------------------------------------------------------
2001 2000
-------------- --------------
Energy Merchant
---------------
Gross Margins $ 562,594 $ 504,048
Earnings Before Interest
and Taxes (EBIT) $ 279,315 $ 189,352
Net Income $ 127,959 $ 92,321
Earnings Per Share - diluted $ 0.80 $ 0.58
Electricity Trading Volumes (Mwhs) 206,430,624 107,474,586
Physical and Financial Gas
Trading Volumes (Bcf/d) 44.8 11.2
Regulated Operations
--------------------
Gross Margins $ 1,298,252 $ 1,326,697
Earnings Before Interest
and Taxes (EBIT) $ 445,752 $ 472,902
Net Income $ 218,923 $ 222,084
Earnings Per Share - diluted $ 1.36 $ 1.39
Electric Retail MWH Sales
and Transportation 38,011,976 37,624,709
Gas Retail MCF Sales and
Transportation 64,329,385 66,581,680
Electric Customers (End of Period) 1,500,790 1,481,411
Gas Customers (End of Period) 489,667 482,328
Power Technology &
Infrastructure Services
-------------------------
Gross Margins $ 34,836 $ 46,373
Earnings Before Interest
and Taxes (EBIT) $ (12,355) $ (6,184)
Net Income $ (15,197) $ (7,037)
Earnings Per Share - diluted $ (0.10) $ (0.05)
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 September 30, 2001
(unaudited)
---------------------------------------------------------------------
Energy Merchant
---------------
Earnings Per Share - diluted - 2000 $ 0.58
Origination, marketing and
trading gross margins 0.27
Reduction in gross margins due
to lower generation availability (0.09)
Cinergy Solutions 0.06
Increased coal costs (0.08)
Increased interest (0.09)
Reduction in property taxes 0.10
Other - net 0.05
Earnings Per Share - diluted - 2001 $ 0.80
Regulated Operations
--------------------
Earnings Per Share - diluted - 2000 $ 1.39
Reduced gross margins (0.03)
Decreased operation and maintenance expenses 0.06
Increased interest (0.02)
2000 early retirement charge 0.03
Accelerated amortization of regulatory assets (0.06)
Other - net (0.01)
Earnings Per Share - diluted - 2001 $ 1.36
Power Technology & Infrastructure Services
------------------------------------------
Earnings Per Share - diluted - 2000 $ (0.05)
Interest on new investments (0.02)
Lower results from portfolio companies (0.03)
Earnings Per Share - diluted - 2001 $ (0.10)
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