Exhibit 99.1 News Release
Vectren Corporation
P.O. Box 209
Evansville, IN 47702-0209
October 24, 2002
FOR IMMEDIATE RELEASE
Vectren Corporation
Reports 3rd Quarter 2002 Earnings Increase
Evansville, Indiana - Today, Vectren Corporation (NYSE:VVC) reported 2002 third
quarter earnings of $14.0 million, or $.21 per share. These results are in line
with street expectations and compare to earnings of $4.5 million, or $.07 per
share, for the third quarter of 2001. The three months ending September 30, 2001
included nonrecurring merger, integration, and restructuring costs totaling $4.1
million after tax. For the nine months ended September 30, 2002, reported
earnings were $73.9 million, or $1.09 per share, compared to $31.2 million, or
$.47 per share, for the same period in 2001. The nine months ending September
30, 2001 included nonrecurring merger, integration, and restructuring costs and
other nonrecurring items totaling $19.2 million after tax.
"The greatly improved third quarter results from our utility group reflect the
impact of the extremely warm summer weather on our electric operations and the
recovery from costs incurred in 2001 related to the high gas costs of the winter
of 2000-2001," said Niel C. Ellerbrook, Vectren's Chairman and CEO. "Our energy
marketing group and coal mining operations delivered solid results for the
quarter, complementing the strong foundation from our utility operations," added
Ellerbrook.
Specific highlights for the quarter include:
o Net income attributed to utility operations for the third quarter of 2002
was $8.9 million. This compares to net income of $2.7 million before
nonrecurring items for the same period in 2001. Improvement in the 2002
third quarter results reflect the impact on electric operations of the warm
summer weather, lower costs as compared to the same period a year ago
resulting from the high gas costs, and modest customer growth.
o Net income attributed to nonregulated operations was $5.8 million for the
third quarter 2002 as compared to $6.9 million before nonrecurring items
for the same period last year. The decrease of approximately $1.1 million
is due primarily to the gain on the sale of certain investments in the
Other Businesses group of $1.7 million after tax in 2001, offset somewhat
by increased earnings from the Coal Mining and Utility Infrastructure
groups.
Please SEE ATTACHED unaudited schedules for additional financial information.
Live Webcast and Replay:
Vectren Corporation will provide more detail on third quarter results on a
conference call for analysts scheduled at 9:30 a.m. ET (8:30 a.m. CT), Friday,
October 25, 2002. You are invited to listen to the live Webcast and view the
supporting slides by accessing the Investor Relations link on Vectren's Web site
at www.vectren.com. Interested parties may also view the slide presentation and
listen to the Webcast replay via Vectren's Web site beginning two hours after
the conclusion of the Webcast. A tape-recorded replay of the call will be
available two hours after completion of the conference through Friday, November
1, 2002. To access the replay dial 719-457-0820 and enter the conference
identification number 583904.
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 approximately 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 and nine-month periods ended September 30 is not
indicative of net income for an annual period due to seasonal sales of gas and
electricity 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 this news release and subsequent 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 29, 2002.
Investor Contact: Steven M. Schein, (812) 491-4209, sschein@vectren.com
Media Contact: Jeffrey W. Whiteside, (812) 491-4205, jwhiteside@vectren.com
###
VECTREN CORPORATION
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
(Thousands, except for share amounts)
(Unaudited)
Three Months Nine Months Twelve Months
Ended September 30 Ended September 30 Ended September 30
------------------ ---------------------- ----------------------
2002 2001 2002 2001 2002 2001
-------- -------- ---------- ---------- ---------- ----------
OPERATING REVENUE:
Gas utility $ 88,078 $ 95,951 $ 584,979 $ 774,265 $ 842,233 $1,201,531
Electric utility 189,936 104,335 475,660 287,564 566,962 374,758
Energy services and other 26,345 156,444 265,887 611,889 413,624 804,991
-------- -------- ---------- ---------- ---------- ----------
Total operating revenues 304,359 356,730 1,326,526 1,673,718 1,822,819 2,381,280
-------- -------- ---------- ---------- ---------- ----------
OPERATING EXPENSES:
Cost of gas sold 45,720 51,147 357,580 550,097 515,784 873,263
Fuel for electric generation 22,872 21,011 59,731 56,852 77,280 72,403
Purchased electric energy 92,436 22,565 239,272 69,379 261,559 80,688
Cost of energy services and other 16,306 143,733 234,829 582,527 372,464 773,475
Other operating 54,314 55,218 168,342 175,745 229,436 232,557
Merger and integration costs - 1,326 - 2,088 720 11,927
Restructuring costs - 2,580 - 14,382 4,666 14,382
Depreciation and amortization 30,406 32,321 88,194 95,586 116,283 126,239
Taxes other than income taxes 9,794 9,309 38,292 39,905 51,939 55,744
-------- -------- ---------- ---------- ---------- ----------
Total operating expenses 271,848 339,210 1,186,240 1,586,561 1,630,131 2,240,678
-------- -------- ---------- ---------- ---------- ----------
OPERATING INCOME 32,511 17,520 140,286 87,157 192,688 140,602
OTHER INCOME:
Equity in earnings of
unconsolidated investments 1,708 4,881 7,785 14,965 6,924 13,649
Other - net 3,420 3,588 12,563 11,512 17,307 15,726
-------- -------- ---------- ---------- ---------- ----------
Total other income 5,128 8,469 20,348 26,477 24,231 29,375
-------- -------- ---------- ---------- ---------- ----------
INTEREST EXPENSE 19,404 18,870 58,555 62,626 78,508 81,819
-------- -------- ---------- ---------- ---------- ----------
INCOME BEFORE INCOME TAXES 18,235 7,119 102,079 51,008 138,411 88,158
INCOME TAXES 3,888 1,353 28,074 14,470 32,221 25,174
MINORITY INTEREST IN SUBSIDIARY 375 980 128 810 (62) 831
PREFERRED DIVIDEND REQUIREMENTS OF
SUBSIDIARY 15 268 25 748 35 989
-------- -------- ---------- ---------- ---------- ----------
NET INCOME BEFORE EXTRAORDINARY
LOSS AND CUMULATIVE EFFECT OF CHANGE
IN ACCOUNTING PRINCIPLE, NET $ 13,957 $ 4,518 $ 73,852 $ 34,980 $ 106,217 $ 61,164
EXTRAORDINARY LOSS, NET - - - (7,706) - (7,706)
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE, NET - - - 3,938 - 3,938
-------- -------- ---------- ---------- ---------- ----------
NET INCOME $ 13,957 $ 4,518 $ 73,852 $ 31,212 $ 106,217 $ 57,396
======== ======== ========== ========== ========== ==========
AVERAGE COMMON SHARES OUTSTANDING 67,601 67,512 67,573 66,470 67,560 65,138
DILUTED COMMON SHARES OUTSTANDING 67,807 67,654 67,842 66,616 67,805 65,402
EARNINGS PER SHARE OF COMMON STOCK
BASIC:
NET INCOME BEFORE EXTRAORDINARY
LOSS AND CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING
PRINCIPLE, NET $ 0.21 $ 0.07 $ 1.09 $ 0.53 $ 1.57 $ 0.94
EXTRAORDINARY LOSS, NET - - - (0.12) - (0.12)
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE, NET - - - 0.06 - 0.06
-------- -------- ---------- ---------- ---------- ----------
EARNINGS PER SHARE OF COMMON
STOCK $ 0.21 $ 0.07 $ 1.09 $ 0.47 $ 1.57 $ 0.88
DILUTED:
NET INCOME BEFORE EXTRAORDINARY
LOSS AND CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING PRINCIPLE,
NET $ 0.21 $ 0.07 $ 1.09 $ 0.53 $ 1.57 $ 0.94
EXTRAORDINARY LOSS, NET - - - (0.12) - (0.12)
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE, NET - - - 0.06 - 0.06
-------- -------- ---------- ---------- ---------- ----------
EARNINGS PER SHARE OF COMMON
STOCK $ 0.21 $ 0.07 $ 1.09 $ 0.47 $ 1.57 $ 0.88
======== ======== ========== ========== ========== ==========
VECTREN UTILITY HOLDINGS
AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
(Thousands, except for share amounts)
(Unaudited)
Three Months Nine Months Twelve Months
Ended September 30 Ended September 30 Ended September 30
-------------------- ---------------------- ----------------------
2002 2001 2002 2001 2002 2001
--------- --------- ---------- ---------- ---------- ----------
OPERATING REVENUE:
Gas utility $ 88,078 $ 95,951 $ 584,979 $ 774,265 $ 842,233 $1,201,531
Electric utility 189,936 104,335 475,660 287,564 566,962 374,758
--------- --------- ---------- ---------- ---------- ----------
Total operating revenues 278,014 200,286 1,060,639 1,061,829 1,409,195 1,576,289
--------- --------- ---------- ---------- ---------- ----------
OPERATING EXPENSES:
Cost of gas sold 45,720 51,147 358,198 550,097 516,402 873,263
Fuel for electric generation 22,872 21,011 59,731 56,852 77,280 76,933
Purchased electric energy 92,436 22,565 239,272 69,379 261,559 80,688
Other operating 53,262 55,071 164,322 177,842 221,115 240,370
Merger and integration costs - 1,366 - 2,075 720 4,869
Restructuring costs - 1,233 - 12,038 2,972 12,038
Depreciation and amortization 24,127 24,604 71,663 74,132 94,417 96,397
Income Taxes 4,658 794 30,573 11,269 41,984 26,755
Taxes other than income taxes 9,710 8,633 37,835 38,384 50,775 53,870
--------- --------- ---------- ---------- ---------- ----------
Total operating expenses 252,785 186,424 961,594 992,068 1,267,224 1,465,183
--------- --------- ---------- ---------- ---------- ----------
OPERATING INCOME 25,229 13,862 99,045 69,761 141,971 111,106
OTHER INCOME:
Equity in earnings of
unconsolidated affiliates (414) - (1,393) - (1,393) -
Other - net 550 1,438 10,671 1,614 14,023 2,800
--------- --------- ---------- ---------- ---------- ----------
Total other income 136 1,438 9,278 1,614 12,630 2,800
--------- --------- ---------- ---------- ---------- ----------
INTEREST EXPENSE 16,453 15,543 49,689 52,277 67,570 68,286
--------- --------- ---------- ---------- ---------- ----------
PREFERRED DIVIDEND REQUIREMENTS
OF SUBSIDIARY 15 268 25 748 35 989
--------- --------- ---------- ---------- ---------- ----------
INCOME (LOSS) BEFORE CUMULATIVE
EFFECT OF CHANGE IN ACCOUNTING
PRINCIPLE, NET $ 8,897 $ (511) $ 58,609 $ 18,350 $ 86,996 $ 44,631
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE, NET - - - 3,938 - 3,938
--------- --------- ---------- ---------- ---------- ----------
NET INCOME (LOSS) $ 8,897 $ (511) $ 58,609 $ 22,288 $ 86,996 $ 48,569
========= ========= ========== ========== ========== ==========
VECTREN CORPORATION 3 Months 9 Months 12 Months
HIGHLIGHTS Ended Sept.30 Ended Sept.30 Ended Sept.30
---------------------------------------------------
(millions, except per share amounts)
---------------------------------------------------
(Unaudited) 2002 2001 2002 2001 2002 * 2001
- ------------------------------------------------------------------------------------------
Reported Earnings:
Utility Group $ 8.9 $ (0.5) $ 58.6 $ 22.3 $ 87.0 $ 48.6
Non-regulated Group 5.8 6.0 14.8 10.9 16.1 14.8
Corporate and Other (0.7) (1.0) 0.5 (2.0) 3.1 (6.0)
------ ------ ------ ------ ------ ------
Vectren Consolidated $ 14.0 $ 4.5 $ 73.9 $ 31.2 $106.2 $ 57.4
Merger, Integration and
Restructuring Costs:
Utility Group $ - $ 3.2 $ - $ 13.9 $ 3.1 $ 18.6
Non-regulated Group - 0.9 - 1.3 0.9 1.4
Corporate and Other - - - 0.2 0.4 4.4
------ ------ ------ ------ ------ ------
Total - 4.1 - 15.4 4.4 24.4
Other Non-Recurring Items:
Utility Group-Cumulative Effect
of Adoption of FAS 133 $ - $ - $ - $ 3.9 $ - $ 3.9
Non-regulated Group-
Extraordinary Loss in 2001 - - - (7.7) - (7.7)
------ ------ ------ ------ ------ ------
Income From Operations:
Utility Group $ 8.9 $ 2.7 $ 58.6 $ 32.3 $ 90.1 $ 63.3
Non-regulated Group
Energy Marketing and Services 2.9 3.3 10.9 10.0 12.8 10.6
Coal Mining 4.0 3.8 9.8 9.0 14.3 11.6
Utility Infrastructure Services 0.2 (0.1) (0.4) (1.0) - (0.9)
Broadband 0.1 - 0.3 (0.1) 0.1 (0.1)
Other Businesses (1.4) (0.1) (5.8) 2.0 (10.2) 2.7
------ ------ ------ ------ ------ ------
Total Non-regulated Group 5.8 6.9 14.8 19.9 17.0 23.9
Corporate and Other (0.7) (1.0) 0.5 (1.8) 3.5 (1.6)
------ ------ ------ ------ ------ ------
Vectren Consolidated $ 14.0 $ 8.6 $ 73.9 $ 50.4 $110.6 $ 85.6
====== ====== ====== ====== ====== ======
Vectren Selected Highlights
12 months 12 months
Ended Ended
Sept.30 Sept.30
2002 2001
------ ------
Dividends Paid (per common share,
12 month) $ 1.06 $ 1.03
Annualized Dividend $ 1.06 $ 1.02
Dividend Yield (at close) 4.8% 4.6%
Dividend Payout Ratio 67.5% 117.0%
Dividend to Book Value 8.3% 8.4%
Return on Average Shareholder Equity 12.6% 7.5%
Book Value Per Share $12.79 $12.13
Market to Book Value (at close) 172% 185%
Common Stock Prices (VVC - NYSE)
High $26.10 $26.50
Low $17.95 $19.76
Close $22.00 $22.39
Price/Earnings Ratio (trailing) 14.0 25.4
Percent Internally Generated Funds -
Utility Group 72% 60%
Ratio of Earnings to Fixed Charges -
SEC Method
Consolidated 2.7 2.0
Utility Group 2.9 2.1
* Selected highlights for the twelve months ended September 30, 2001, include
eleven months of operations resulting from the acquisition of the Ohio
operations on October 31, 2000.
SELECTED GAS DISTRIBUTION 3 Months 9 Months 12 Months
OPERATING STATISTICS Ended September 30 Ended September 30 Ended September 30
-------------------- -------------------- ---------------------
(Unaudited) 2002 2001 2002 2001 2002 * 2001
- ------------------------------- --------- --------- --------- --------- --------- ----------
GAS OPERATING REVENUES (Thousands):
Residential $ 54,024 $ 58,567 $ 391,002 $ 511,045 $ 560,813 $ 790,039
Commercial 21,523 23,577 135,418 186,909 192,688 285,340
Contract 11,975 13,598 55,753 69,988 83,987 117,627
Miscellaneous Revenue 556 209 2,806 6,323 4,745 8,525
---------- --------- --------- --------- --------- ----------
$ 88,078 $ 95,951 $ 584,979 $ 774,265 $ 842,233 $1,201,531
========== ========= ========= ========= ========= ==========
GAS MARGIN (Thousands):
Operating Revenues $ 88,078 $ 95,951 $ 584,979 $ 774,265 $ 842,233 $1,201,531
Cost of Gas 45,720 51,147 358,198 550,097 516,402 873,263
---------- --------- --------- --------- --------- ----------
Margin $ 42,358 $ 44,804 $ 226,781 $ 224,168 $ 325,831 $ 328,268
========== ========= ========= ========= ========= ==========
GAS SOLD & TRANSPORTED (MDth):
Residential 4,250 3,974 51,422 51,008 74,751 83,335
Commercial 2,373 2,200 19,694 20,150 28,107 32,243
Contract 19,838 19,766 68,758 71,134 94,485 100,297
---------- --------- --------- --------- --------- ----------
26,461 25,940 139,874 142,292 197,343 215,875
========== ========= ========= ========= ========= ==========
AVERAGE GAS CUSTOMERS:
Residential 860,440 848,700 868,235 857,758 866,647 857,260
Commercial 78,512 78,934 79,527 79,673 79,593 79,627
Contract 4,136 3,732 4,195 3,731 4,659 3,732
---------- --------- --------- --------- --------- ----------
943,088 931,366 951,957 941,162 950,899 940,619
========== ========= ========= ========= ========= ==========
WEATHER AS A PERCENT OF NORMAL:
Heating Degree Days 91% 97% 87% 104%
* Gas operating statistics for the twelve months ended September 30, 2001
include eleven months of operations from the acquisition of the Ohio
operations on October 31, 2000.
VECTREN CORPORATION
SELECTED ELECTRIC 3 Months 9 Months 12 Months
OPERATING STATISTICS Ended September 30 Ended September 30 Ended September 30
----------------------- ------------------------ ------------------------
(Unaudited) 2002 2001 2002 2001 2002 2001
- ----------------------------------- ---------- ---------- ----------- ---------- ----------- -----------
ELECTRIC OPERATING REVENUES (Thousands):
Residential $ 40,505 $ 32,493 $ 87,008 $ 75,624 $ 107,879 $ 96,984
Commercial 23,608 21,087 61,299 55,906 79,600 75,749
Industrial 23,684 21,303 66,731 62,235 86,519 84,502
Miscellaneous Revenue 1,681 539 4,172 2,897 6,001 4,471
--------- --------- ---------- --------- --------- ---------
Total Retail 89,478 75,422 219,210 196,662 279,999 261,706
Wholesale 100,458 28,913 256,450 90,902 286,963 113,052
--------- --------- ---------- --------- --------- ---------
$ 189,936 $ 104,335 $ 475,660 $ 287,564 $ 566,962 $ 374,758
========= ========= ========== ========= ========= =========
ELECTRIC MARGIN (Thousands):
Operating Revenues $ 189,936 $ 104,335 $ 475,660 $ 287,564 $ 566,962 $ 374,758
Cost of Fuel & Purchased Power 115,308 43,576 299,003 126,231 338,839 157,621
--------- --------- ---------- --------- --------- ---------
Margin $ 74,628 $ 60,759 $ 176,657 $ 161,333 $ 228,123 $ 217,137
========= ========== ========== ========= ========= =========
ELECTRICITY SOLD (MWh):
Residential 584,313 476,310 1,264,594 1,122,121 1,553,735 1,456,119
Commercial 452,931 421,101 1,135,077 1,055,942 1,462,490 1,399,878
Industrial 643,567 662,635 1,872,241 1,865,383 2,433,614 2,485,130
Miscellaneous Sales 4,266 4,431 12,734 13,703 18,197 19,510
--------- --------- ---------- --------- --------- ---------
Total Retail 1,685,077 1,564,477 4,284,646 4,057,149 5,468,036 5,360,637
Wholesale 2,847,156 909,512 8,773,654 2,769,179 9,902,706 3,499,256
--------- --------- ---------- --------- --------- ---------
4,532,233 2,473,989 13,058,300 6,826,328 15,370,742 8,859,893
========= ========= ========== ========= ========== =========
AVERAGE ELECTRIC CUSTOMERS:
Residential 116,104 115,169 115,970 115,028 115,851 114,930
Commercial 17,001 17,410 17,217 17,327 17,245 17,292
Industrial 175 169 175 166 175 166
All Others 23 23 23 23 23 24
--------- --------- ---------- --------- ---------- ---------
133,303 132,771 133,385 132,544 133,294 132,412
========= ========= ========== ========= ========== =========
WEATHER AS A PERCENT OF NORMAL:
Heating Degree Days 91% 97% 87% 104%
Cooling Degree Days 126% 96% 122% 99% 120% 101%