NEWS RELEASE
EXHIBIT 99.1
Vectren Corporation
P.O. Box 209
Evansville, IN 47702-0209
January 23, 2002
FOR IMMEDIATE RELEASE
Vectren Corporation
Reports 4th Quarter and 2001 Results
Evansville, Indiana - Today, Vectren Corporation (NYSE:VVC) reported 2001 fourth
quarter earnings of $32.4 million, or $.48 per share, compared to net income of
$26.2 million, or $.43 per share, for the same period a year ago. Merger,
integration and restructuring costs reduced earnings by $4.4 million, or $.06
per share, in the fourth quarter of this year and by $9 million, or $.14 per
share, for the same quarter last year. Weather for the fourth quarter was 32
percent warmer than the same period last year.
Reported net income for the year ended December 31, 2001 was $63.6 million, or
$.95 per share, compared to net income of $72.0 million, or $1.18 per share, for
the same period a year ago. Nonrecurring merger, integration and restructuring
costs reduced reported earnings by $19.9 million, or $.30 per share, this year
and by $36.8 million, or $.60 per share, for last year. Other non-recurring
items impacting fiscal year 2001 results include the positive impact of FAS 133,
accounting for derivative instruments, of $1.9 million, or $.03 per share, and
the extraordinary loss on the disposition of leveraged lease assets of $7.7
million, or $.12 per share. Year 2000 results were favorably impacted by the
recognition of a one time gain of $4.9 million, or $.08 per share, incurred in
connection with the restructuring of Vectren's communication investment.
Income from operations, excluding the non-recurring items noted above, was $89.3
million, or $1.34 per share for the year ended December 31, 2001 compared to
$103.9 million, or $1.70 per share, for last year.
"The results for the fourth quarter of 2001 were particularly encouraging and
the results for the fiscal year were consistent with our expectations and the
guidance we had provided the financial community," said Niel C. Ellerbrook,
Vectren's Chairman and CEO. "Our financial results reflect a very challenging
year, including extremely warm weather, high gas prices early in the year and a
general slow down in the economy. While the financial results were certainly not
what we would have preferred for our first full year of operations since our
merger and subsequent acquisition of the DPL gas assets, in many ways 2001 was
an outstanding year for our Company. We have successfully realigned three
utility operations into one solid operation, laying the foundation for future
earnings growth and positioning us as one of the lowest cost, premier service
utilities in the Midwest. Our non-regulated operations had a very good year,
contributing $21.9 million to after tax income from operations, an increase of
23% from last year." added Ellerbrook.
Specific highlights for the year include:
* Regulated income from operations decreased 22 percent to $65.8 million.
Heating weather was approximately 10 percent warmer than normal as compared
to near normal weather last year. The impact of extraordinarily high gas
prices early in the year had unfavorable impacts on margins and operating
costs, including uncollectible account expense, interest and excise taxes.
Strong wholesale electric sales were offset by lower margins due to the
slow down in the economy.
-more-
5
* Income from operations from the energy marketing and services group
increased from $7.2 million to $11.9 million. 2001 volumes increased more
than 20% over 2000.
* Income from operations from the coal-mining group increased $8.9 million to
$13.5 million. The increase was largely due to the ramping up to full
production of our second coal mine.
* Loss from operations from the other businesses was ($2.7) million,
principally due to losses on construction contracts nearing completion at
Vectren Communications Services, a company that builds, manages and
provides consulting services to aid municipal utilities with broadband
communications. These losses were partially offset by gains resulting from
the continued planned harvesting of our energy venture investments.
Please see unaudited schedules for additional financial information.
Live Webcast:
In conjunction with this earnings release, you are invited to listen in
real-time to a conference call on January 24 at 10:00 a.m. EST. A link to the
live webcast and supporting slides will be available on Vectren's website at
www.vectren.com. The call will be available for replay on Vectren's website as
well as at (719) 457-0820, passcode 773295.
Vectren Corporation is an energy and applied technology holding company
headquartered in Evansville, Indiana. Vectren's energy delivery subsidiaries
provide gas and/or electricity to nearly one million customers in adjoining
service territories that cover nearly two-thirds of Indiana and west central
Ohio. Vectren's non-regulated subsidiaries and affiliates currently offer
energy-related products and services to customers throughout the surrounding
region. These include gas marketing and related services; coal production and
sales; utility infrastructure services; and broadband communication services. To
learn more about Vectren, visit www.vectren.com.
NOTE: Net income for the three month periods ended December 31 is not indicative
of net income for an annual period due to seasonal sales of gas and electric for
space heating and cooling purposes.
Safe Harbor for Forward Looking Statements:
This press release may contain forward-looking statements. Vectren wishes to
caution readers that actual results could differ materially from those that will
be projected in our discussions. Additional detailed information concerning a
number of factors that could cause actual results to differ materially from the
information that is provided to you is readily available in our report Form 10-K
filed with the Securities and Exchange Commission on March 30, 2001, as amended
on August 29, 2001.
Investor Contact: Steven M. Schein, (812) 491-4209, sschein@vectren.com
-------------------
Media Contact: Jeffrey W. Whiteside, (812) 491-4205, jwhiteside@vectren.com
----------------------
###
6
VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
(Thousands, except for share amounts)
(Unaudited)
Three Months Twelve Months
Ended December 31 Ended December 31
-------------------------- ---------------------------
2001 2000 2001 2000
----------- ------------ ------------ ------------
OPERATING REVENUE:
Gas utility $ 257,254 $ 427,267 $ 1,031,519 $ 818,753
Electric utility 91,302 87,194 378,866 336,409
Energy services and other 147,737 193,102 759,626 493,528
----------- ----------- ----------- -----------
Total operating revenues 496,293 707,563 2,170,011 1,648,690
----------- ----------- ----------- -----------
OPERATING EXPENSES:
Cost of gas sold 158,205 323,167 708,224 552,540
Fuel for electric generation 17,549 20,081 74,401 75,700
Purchased electric energy 22,287 11,309 91,666 36,394
Cost of energy services and other 137,636 186,418 720,163 468,728
Other operating 61,092 56,810 236,915 199,430
Merger and integration costs 720 9,839 2,808 41,145
Restructuring costs 4,666 - 19,048 -
Depreciation and amortization 28,089 30,653 123,675 105,661
Taxes other than income taxes 13,647 15,840 53,552 38,010
----------- ----------- ----------- -----------
Total operating expenses 443,891 654,117 2,030,452 1,517,608
----------- ----------- ----------- -----------
OPERATING INCOME 52,402 53,446 139,559 131,082
OTHER INCOME:
Equity in earnings of unconsolidated
investments (861) (1,316) 14,104 9,856
Other - net 4,744 3,433 16,256 23,707
----------- ----------- ----------- -----------
Total other income 3,883 2,117 30,360 33,563
----------- ----------- ----------- -----------
INTEREST EXPENSE 19,953 18,412 82,579 56,352
----------- ----------- ----------- -----------
INCOME BEFORE INCOME TAXES 36,332 37,151 87,340 108,293
INCOME TAXES 4,147 10,705 18,617 34,232
MINORITY INTEREST IN SUBSIDIARY (190) 21 620 1,004
PREFERRED DIVIDEND REQUIREMENTS OF SUBSIDIARY 10 241 758 1,017
----------- ----------- ----------- -----------
INCOME BEFORE EXTRAORDINARY LOSS AND CUMULATIVE
EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE, NET $ 32,365 $ 26,184 $ 67,345 $ 72,040
EXTRAORDINARY LOSS, NET - - (7,706) -
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
PRINCIPLE, NET - - 3,938 -
----------- ----------- ----------- -----------
NET INCOME $ 32,365 $ 26,184 $ 63,577 $ 72,040
AVERAGE COMMON SHARES OUTSTANDING 67,512 61,416 66,748 61,297
DILUTED COMMON SHARES OUTSTANDING 67,691 61,586 66,876 61,380
EARNINGS PER SHARE OF COMMON STOCK
BASIC:
INCOME BEFORE EXTRAORDINARY LOSS AND CUMULATIVE
EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE, NET $ 0.48 $ 0.43 $ 1.01 $ 1.18
EXTRAORDINARY LOSS, NET - - (0.12) -
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
PRINCIPLE, NET - - 0.06 -
----------- ----------- ----------- -----------
EARNINGS PER SHARE OF COMMON STOCK $ 0.48 $ 0.43 $ 0.95 $ 1.18
DILUTED:
INCOME BEFORE EXTRAORDINARY LOSS AND CUMULATIVE
EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE, NET $ 0.48 $ 0.43 $ 1.01 $ 1.17
EXTRAORDINARY LOSS, NET - - (0.12) -
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
PRINCIPLE, NET - - 0.06 -
----------- ----------- ----------- -----------
EARNINGS PER SHARE OF COMMON STOCK $ 0.48 $ 0.43 $ 0.95 $ 1.17
7
VECTREN UTILITY HOLDINGS
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
(Thousands, except for share amounts)
(Unaudited)
Three Months Twelve Months
Ended December 31 Ended December 31
----------------------- -----------------------
2001 2000 2001 2000
---------- ---------- ---------- ----------
OPERATING REVENUE:
Gas utility $ 257,254 $ 427,267 $1,031,519 $ 818,753
Electric utility 91,302 87,194 378,866 336,409
---------- ---------- ---------- ----------
Total operating revenues 348,556 514,461 1,410,385 1,155,162
---------- ---------- ---------- ----------
OPERATING EXPENSES:
Cost of gas sold 158,205 323,167 708,224 552,540
Fuel for electric generation 17,549 20,081 74,401 75,700
Purchased electric energy 22,287 11,309 91,666 36,394
Other operating 56,791 62,528 234,710 209,936
Merger and integration costs 720 2,793 2,795 32,711
Restructuring costs 2,972 - 15,010 -
Depreciation and amortization 22,754 22,266 96,886 82,430
Income taxes 11,412 15,487 22,680 34,925
Taxes other than income taxes 12,940 15,486 51,325 36,238
---------- ---------- ---------- ----------
Total operating expenses 305,630 473,117 1,297,697 1,060,874
---------- ---------- ---------- ----------
OPERATING INCOME 42,926 41,344 112,688 94,288
OTHER INCOME:
Other - net 3,352 1,187 4,966 5,201
---------- ---------- ---------- ----------
Total other income 3,352 1,187 4,966 5,201
---------- ---------- ---------- ----------
INTEREST EXPENSE 17,881 16,009 70,159 46,072
---------- ---------- ---------- ----------
PREFERRED DIVIDEND REQUIREMENTS OF SUBSIDIARY 10 241 758 1,017
---------- ---------- ---------- ----------
INCOME BEFORE CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING PRINCIPLE, NET $ 28,387 $ 26,281 $ 46,737 $ 52,400
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
PRINCIPLE, NET - - 3,938 -
---------- ---------- ---------- ----------
NET INCOME $ 28,387 $ 26,281 $ 50,675 $ 52,400
AVERAGE COMMON SHARES OUTSTANDING 67,512 61,416 66,748 61,297
DILUTED COMMON SHARES OUTSTANDING 67,691 61,586 66,876 61,380
EARNINGS PER SHARE OF COMMON STOCK
BASIC:
INCOME BEFORE CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING PRINCIPLE, NET $ 0.42 $ 0.43 $ 0.70 $ 0.85
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
PRINCIPLE, NET - - 0.06 -
---------- ---------- ---------- ----------
EARNINGS PER SHARE OF COMMON STOCK $ 0.42 $ 0.43 $ 0.76 $ 0.85
DILUTED:
INCOME BEFORE CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING PRINCIPLE, NET $ 0.42 $ 0.43 $ 0.70 $ 0.85
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
PRINCIPLE, NET - - 0.06 -
---------- ---------- ---------- ----------
EARNINGS PER SHARE OF COMMON STOCK $ 0.42 $ 0.43 $ 0.76 $ 0.85
8
VECTREN CORPORATION 3 Months 3 Months 3 Months
HIGHLIGHTS Ended March 31 Ended June 30 Ended September 30
---------------------------------------------------
(millions, except per share amounts)
---------------------------------------------------
(Unaudited) 2001 2000 2001 2000 2001 2000
- -------------------------------- ------- ------- ------- ------ ------ ------
Reported Earnings:
Utility Group $ 35.7 $ 12.7 $ (13.2) $ 3.1 $ (0.4) $ 10.5
Non-regulated Group 7.4 8.3 (2.9) 5.2 5.8 4.3
Corporate and Other 1.3 1.1 (1.6) 0.0 (0.9) 0.7
----- ----- ----- ----- ----- -----
Vectren Consolidated $ 44.4 $ 22.1 $ (17.7) $ 8.3 $ 4.5 $ 15.5
Merger, Integration and Restructuring Costs:
Utility Group $ 2.3 $ 18.5 $ 8.4 $ 5.9 $ 3.2 $ 2.6
Non-regulated Group 0.0 0.8 0.6 0.0 0.9 0.0
Corporate and Other 0.0 0.0 0.0 0.0 0.0 0.0
------ ----- ----- ------ ----- -----
Total 2.3 19.3 9.0 5.9 4.1 2.6
Other Non-Recurring Items:
Utility Group-Net Impact of FAS 133 $ 7.2 $ - $ (4.4) $ - $ (1.0) $ -
Non-regulated Group-Extraordinary Loss in 2001
and Gain on SIGECOM Restructuring in 2000 - 4.9 (7.7) - - -
----- ----- ----- ----- ----- -----
Income From Operations:
Utility Group $ 30.8 $ 31.2 $ (0.4) $ 9.0 $ 3.8 $ 13.1
Non-regulated Group
Energy Marketing and Services 5.0 2.1 1.7 2.9 3.3 1.5
Coal Mining 2.0 0.7 3.3 1.0 3.2 0.3
Utility Infrastructure Services (0.7) 0.0 (0.2) 0.1 (0.1) 0.0
Broadband (0.1) 0.0 0.0 (0.6) 0.0 0.0
Other Businesses 1.2 1.4 0.6 1.8 0.3 2.5
----- ----- ----- ----- ----- -----
Total Non-regulated Group 7.4 4.2 5.4 5.2 6.7 4.3
Corporate and Other 1.3 1.1 (1.6) 0.0 (0.9) 0.7
----- ----- ----- ----- ----- -----
Vectren Consolidated $ 39.5 $ 36.5 $ 3.4 $ 14.2 $ 9.6 $ 18.1
===== ===== ===== ===== ==== =====
3 Months 12 Months
Ended December 31 Ended December 31
------------------------------------
------------------------------------
2001 * 2000 2001 * 2000
------- ------- ------- --------
Reported Earnings:
Utility Group $ 28.5 $ 26.3 $ 50.7 $ 52.4
Non-regulated Group 1.1 3.7 11.3 21.7
Corporate and Other 2.8 (3.8) 1.6 (2.1)
------ ------ ------ ------
Vectren Consolidated $ 32.4 $ 26.2 $ 63.6 $ 72.0
Merger, Integration and Restructuring Costs:
Utility Group $ 3.1 $ 4.7 $ 17.0 $ 31.7
Non-regulated Group 1.3 0.2 2.9 1.0
Corporate and Other 0.0 4.1 0.0 4.1
------ ------ ------ ------
Total 4.4 9.0 19.9 36.8
Other Non-Recurring Items:
Utility Group-Net Impact of FAS 133 $ - $ - $ 1.9 $ -
Non-regulated Group-Extraordinary Loss in 2001
and Gain on SIGECOM Restructuring in 2000 - - (7.7) 4.9
------ ------ ------ ------
Income From Operations:
Utility Group $ 31.6 $ 31.0 $ 65.8 $ 84.0
Non-regulated Group
Energy Marketing and Services 1.9 0.7 11.9 7.2
Coal Mining 5.0 2.6 13.5 4.6
Utility Infrastructure Services 0.4 0.0 (0.6) 0.2
Broadband (0.1) 0.0 (0.2) (0.6)
Other Businesses (4.8) 0.6 (2.7) 6.4
------ ------ ------ ------
Total Non-regulated Group 2.4 3.9 21.9 17.8
Corporate and Other 2.8 0.3 1.6 2.1
------ ------ ------ ------
Vectren Consolidated $ 36.8 $ 35.2 $ 89.3 $ 103.9
====== ====== ====== ======
Vectren Selected Highlights
Year Ended Year Ended
December December
2001 2000
------- ---------
Dividends Paid (per common share, 12 month) $ 1.03 $ 0.98
Annualized Dividend $ 1.06 $ 1.02
Dividend Yield (at close) 4.4% 4.0%
Dividend Payout Ratio 108.4% 83.1%
Dividend to Book Value 8.5% 8.6%
Return on Average Shareholder Equity 8.0% 10.0%
Book Value Per Share $ 12.54 $ 11.92
Market to Book Value (at close) 191% 215%
Common Stock Prices (VVC - NYSE)
High $ 24.44 $ 26.50
Low $ 19.80 $ 15.75
Close $ 23.98 $ 25.63
Price/Earnings Ratio (trailing) 25.2 21.7
Percent Internally Generated Funds - Utility Group 51% 77%
Ratio of Earnings to Fixed Charges - SEC Method
Consolidated 3.5 2.8
Utility Group 4.2 2.8
* Selected highlights for the three and twelve months ended December 31, 2000,
include two months of operations resulting from the acquisition of the Ohio
operations on October 31, 2000.
9
VECTREN CORPORATION
SELECTED GAS DISTRIBUTION 3 Months 12 Months
OPERATING STATISTICS Ended December 31 Ended December 31
----------------------------------------------------
(Unaudited) 2001 * 2000 2001 * 2000
----------- ----------- ------------ -----------
GAS OPERATING REVENUES (Thousands):
Residential $ 169,811 $ 277,043 $ 680,856 $ 533,785
Commercial 57,270 98,444 244,179 190,797
Contract 28,234 49,578 98,222 85,828
Miscellaneous Revenue 1,939 2,202 8,262 8,343
---------- ---------- ---------- ----------
$ 257,254 $ 427,267 $1,031,519 $ 818,753
========== ========== ========== ==========
GAS MARGIN (Thousands):
Operating Revenues $ 257,254 $ 427,267 $1,031,519 $ 818,753
Cost of Gas 158,205 323,167 708,224 552,540
---------- ---------- ---------- ----------
Margin $ 99,049 $ 104,100 $ 323,295 $ 266,213
========== ========== ========== ==========
GAS SOLD & TRANSPORTED (MDth):
Residential 23,329 32,328 74,337 65,726
Commercial 8,414 12,092 28,563 25,950
Contract 26,951 29,161 96,861 89,562
---------- ---------- ---------- ----------
58,694 73,581 199,761 181,238
========== ========== ========== ==========
AVERAGE GAS CUSTOMERS:
Residential 861,883 855,995 858,789 851,729
Commercial 79,798 79,516 79,703 79,475
Contract 4,294 4,329 4,311 4,349
---------- ---------- ---------- ----------
945,975 939,840 942,803 935,553
========== ========== ========== ==========
WEATHER AS A PERCENT OF NORMAL:
Heating Degree Days 80% 117% 90% 99%
* Gas operating statistics for the three and twelve months ended December 31,
2000 include two months of operations from the acquisition of the Ohio
operations on October 31, 2000.
10
VECTREN CORPORATION
SELECTED ELECTRIC 3 Months 12 Months
OPERATING STATISTICS Ended December 31 Ended December 31
----------------------------------------------------
(Unaudited) 2001 2000 2001 2000
---------- ---------- ---------- ----------
ELECTRIC OPERATING REVENUES (Thousands):
Residential $ 20,876 $ 21,360 $ 96,500 $ 92,815
Commercial 18,295 19,843 74,201 73,595
Industrial 19,830 22,267 82,065 82,634
Miscellaneous Revenue 2,434 1,574 5,331 8,682
---------- ---------- ---------- ----------
Total Retail 61,435 65,044 258,097 257,726
Wholesale 29,867 22,150 120,769 78,683
---------- ---------- ---------- ----------
$ 91,302 $ 87,194 $ 378,866 $ 336,409
========== ========== ========== ==========
ELECTRIC MARGIN (Thousands):
Operating Revenues $ 91,302 $ 87,194 $ 378,866 $ 336,409
Cost of Fuel & Purchased Power 39,836 31,390 166,067 112,094
---------- ---------- ---------- ----------
Margin $ 51,466 $ 55,804 $ 212,799 $ 224,315
========== ========== ========== ==========
ELECTRICITY SOLD (MWh):
Residential 289,141 315,308 1,411,262 1,371,331
Commercial 327,413 337,439 1,383,355 1,329,304
Industrial 561,373 639,130 2,426,756 2,504,509
Miscellaneous Sales 5,463 5,808 19,166 19,233
---------- ---------- ---------- ----------
Total Retail 1,183,390 1,297,685 5,240,539 5,224,377
Wholesale 1,129,052 735,880 3,898,231 2,300,323
---------- ---------- ---------- ----------
2,312,442 2,033,565 9,138,770 7,524,700
========== ========== ========== ==========
AVERAGE ELECTRIC CUSTOMERS:
Residential 115,496 114,635 115,145 112,125
Commercial 17,327 17,187 17,327 16,834
Industrial 175 164 168 179
---------- ---------- ---------- ----------
132,998 131,986 132,640 129,138
========== ========== ========== ==========
WEATHER AS A PERCENT OF NORMAL:
Heating Degree Days 80% 117% 90% 99%
Cooling Degree Days - - 97% 91%