EX-99.1 RELEASE 3 audit_release-ex991.txt PRESS RELEASE AND FINANCIALS Exhibit 99.1 News Release Vectren Corporation P.O. Box 209 Evansville, IN 47702-0209 March 13, 2003 FOR IMMEDIATE RELEASE Vectren Corporation Reports Final 2002 Results Completes 2001 and 2000 Reaudits Affirms 2003 Guidance Evansville, Indiana - Vectren Corporation (NYSE:VVC) today reported net income for the year ended December 31, 2002 of $114.0 million, or $1.69 per share; net income for the year ended December 31, 2001 of $52.7 million, or $0.79 per share, as restated; and net income for the year ended December 31, 2000 of $72.0 million, or $1.18 per share, as restated. These results include nonrecurring merger, integration and restructuring costs and other nonrecurring items totaling $26.4 million after tax, or $0.40 per share, for fiscal year 2001 and $31.9 million after tax, or $0.52 per share, for fiscal year 2000. The completion of the audits for the three years resulted in only minor adjustments to the preliminary results reported on January 29, 2003. The Company expects to file its 2002 Annual Report on Form 10-K with the Securities Exchange Commission early next week. Said Niel C. Ellerbrook, Chairman and CEO, "I am pleased to report that all work around the 2002, 2001 and 2000 audits is complete and no material changes were made to our preliminary reported numbers. We have worked diligently to bring closure to 2002 and the two prior years and we are now well positioned to execute our permanent financing strategy. Fiscal year 2003 is off to a very good start with colder than normal weather and a strong wholesale power market. Even though we are continuing in an uncertain economic and political environment, we remain confident in our 2003 business plan and earnings expectations." Affirms 2003 Guidance Vectren confirmed 2003 earnings guidance in the range of $1.75 to $1.85 per share, including the potential impact of any permanent financing to be completed during 2003. This range is consistent with previous guidance of $1.80 to $1.90 per share, which excluded the potential impact of any permanent financing plans. Announces Annual Meeting The Company's Annual Meeting will be held at 10:00 a.m. CT on Wednesday, May 14, 2003 at the Victory Theatre in Evansville, Indiana. The shareholder record date is March 24, 2003. Summarization of changes from preliminary results reported January 29, 2003 For the year ended December 31, 2002, net income was $114.0 million, or $1.69 per share. This represents a decrease to the company's previously announced preliminary net income of approximately $.6 million. For the year ended December 31, 2001, restated net income was $52.7 million, or $0.79 per share. This is an increase to the company's previously announced preliminary restated net income of $1.5 million. The total effect of all changes related to the restatements reduced previously reported 2001 earnings by approximately $10.9 million after tax, or $0.16 per share. For the year ended December 31, 2000, restated net income was $72.0 million, or $1.18 per share. The total effect of all changes related to the restatements decreased the company's previously reported net income by approximately $48,000. The impact of other changes related to the restatement increased the company's beginning retained earnings at January 1, 2000 by $1.7 million. Please SEE ATTACHED unaudited schedules for additional financial information About Vectren 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 over 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 services include energy marketing; coal mining; utility infrastructure services; and broadband communication services. To learn more about Vectren, visit www.vectren.com. Safe Harbor for Forward Looking Statements This document contains forward-looking statements, which are based on management's beliefs and assumptions that derive from information currently known by management. Vectren wishes to caution readers that actual results could differ materially from those contained in this document. 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) Twelve Months Ended December 31 ------------------------------------------ 2002 2001 2000 ---------- ----------- ----------- OPERATING REVENUE: As Restated As Restated ----------- ----------- Gas utility $ 909,027 $ 1,019,574 $ 820,388 Electric utility 608,116 381,233 334,428 Energy services and other 287,191 681,033 478,037 ---------- ----------- ---------- Total operating revenues 1,804,334 2,081,840 1,632,853 ---------- ----------- ---------- OPERATING EXPENSES: Cost of gas sold 571,216 708,907 552,540 Fuel for electric generation 81,619 74,401 75,700 Purchased electric energy 296,267 86,928 36,394 Cost of energy services and other 249,417 640,904 453,236 Other operating 222,948 243,230 198,456 Merger and integration costs - 2,808 41,145 Restructuring costs - 19,048 - Depreciation and amortization 119,631 124,081 105,674 Taxes other than income taxes 51,902 53,714 38,010 ---------- ----------- ---------- Total operating expenses 1,593,000 1,954,021 1,501,155 ----------- ----------- ---------- OPERATING INCOME $ 211,334 $ 127,819 $ 131,698 OTHER INCOME: Equity in earnings of unconsolidated investments 9,082 13,388 9,856 Other - net 11,522 16,745 23,065 ---------- ----------- ---------- Total other income 20,604 30,133 32,921 ---------- ----------- ---------- INTEREST EXPENSE 78,481 83,168 56,404 ---------- ----------- ---------- INCOME BEFORE INCOME TAXES $ 153,457 $ 74,784 $ 108,215 INCOME TAXES 38,883 14,091 34,202 MINORITY INTEREST IN SUBSIDIARY 514 620 1,004 PREFERRED DIVIDEND REQUIREMENT OF SUBSIDIARY 32 758 1,017 ---------- ----------- ---------- NET INCOME BEFORE EXTRAORDINARY LOSS AND CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE, NET OF TAX 114,028 $ 59,315 $ 71,992 EXTRAORDINARY LOSS, NET OF TAX - (7,706) - CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE, NET OF TAX - 1,107 - ---------- ----------- ---------- NET INCOME $ 114,028 $ 52,716 $ 71,992 ========== =========== ========== AVERAGE COMMON SHARES OUTSTANDING 67,582 66,748 61,297 DILUTED COMMON SHARES OUTSTANDING 67,842 66,878 61,427 EARNINGS PER SHARE OF COMMON STOCK BASIC: NET INCOME BEFORE EXTRAORDINARY LOSS AND CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE, NET OF TAX $ 1.69 $ 0.89 $ 1.18 EXTRAORDINARY LOSS, NET OF TAX - (0.12) - CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE, NET OF TAX - 0.02 - ---------- ---------- ---------- EARNINGS PER SHARE OF COMMON STOCK $ 1.69 $ 0.79 $ 1.18 DILUTED: NET INCOME BEFORE EXTRAORDINARY LOSS AND CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE, NET OF TAX $ 1.68 $ 0.89 $ 1.17 EXTRAORDINARY LOSS, NET OF TAX - (0.12) - CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE, NET OF TAX - 0.02 - ---------- ----------- ---------- EARNINGS PER SHARE OF COMMON STOCK $ 1.68 $ 0.79 $ 1.17 ========== =========== ==========
VECTREN UTILITY HOLDINGS AND SUBSIDIARY COMPANIES CONSOLIDATED STATEMENTS OF INCOME (Thousands) (Unaudited) Twelve Months Ended December 31 ----------------------------------------- 2002 2001 2000 ----------- ----------- ----------- OPERATING REVENUE: As Restated As Restated ----------- ----------- Gas utility $ 909,027 $ 1,019,574 $ 820,388 Electric utility 608,116 381,233 334,428 ----------- ----------- ----------- Total operating revenues 1,517,143 1,400,807 1,154,816 ----------- ----------- ----------- OPERATING EXPENSES: Cost of gas sold 571,833 708,907 552,540 Fuel for electric generation 81,619 74,401 75,700 Purchased electric energy 296,267 86,928 36,394 Other operating 220,520 241,080 208,940 Merger and integration costs - 2,795 32,712 Restructuring costs - 15,010 - Depreciation and amortization 96,754 97,229 82,442 Taxes other than income taxes 50,846 51,249 36,238 ----------- ----------- ----------- Total operating expenses 1,317,839 1,277,599 1,024,966 ----------- ----------- ----------- OPERATING INCOME 199,304 123,208 129,850 OTHER INCOME: Equity in earnings (losses) of unconsolidated affiliates (1,859) (463) - Other - net 6,988 5,501 4,793 ----------- ----------- ----------- Total other income 5,129 5,038 4,793 ----------- ----------- ----------- INTEREST EXPENSE 66,141 70,142 46,125 ----------- ----------- ----------- INCOME BEFORE INCOME TAXES 138,292 58,104 88,518 INCOME TAXES 44,642 18,388 35,006 PREFERRED DIVIDEND REQUIREMENT OF SUBSIDIARY 32 758 1,017 ----------- ----------- ----------- INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE, NET OF TAX 93,618 38,958 52,495 CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE, NET OF TAX - 1,107 - ----------- ----------- ----------- NET INCOME $ 93,618 $ 40,065 $ 52,495 =========== =========== ===========
VECTREN CORPORATION HIGHLIGHTS 3 Months 3 Months 3 Months (millions, except per share amounts) Ended March 31 Ended June 30 Ended September 30 --------------------------------------------------------- (Unaudited) 2002 2001 2002 2001 2002 2001 --------------------------- ---------------------------------------------------------- As As As As As As Restated Restated Restated Restated Restated Restated -------- -------- -------- -------- -------- -------- Reported Earnings: Utility Group $ 41.0 $ 36.1 $ 7.0 $(13.3) $ 8.5 $ (1.4) Non-regulated Group 4.4 7.6 4.4 (2.6) 5.8 6.0 Corporate and Other 0.1 1.2 1.1 (2.4) (0.7) (0.8) ------ ------ ------ ------ ------ ------ Vectren Consolidated $ 45.5 $ 44.9 $ 12.5 $(18.3) $ 13.6 $ 3.8 Merger, Integration and Restructuring Costs: Utility Group $ - $ 2.3 $ - $ 8.4 $ - $ 3.2 Non-regulated Group - - - 0.4 - 0.9 Corporate and Other - - - 0.2 - - ------ ------ ------ ------ ------ ------ Total - 2.3 - 9.0 - 4.1 Other Non-Recurring Items: Utility Group-Cumulative Effect of Adoption of FAS 133 $ - $ 1.1 $ - $ - $ - $ - Non-regulated Group-Extraordinary Loss in 2001 - - - (7.7) - - ------ ------ ------ ------ ------ ------ Income From Operations: Utility Group $ 41.0 $ 37.3 $ 7.0 $ (4.9) $ 8.5 $ 1.8 Non-regulated Group Energy Marketing and Services 4.6 5.0 3.6 1.7 2.9 3.3 Coal Mining 2.0 1.9 2.9 3.3 4.0 3.8 Utility Infrastructure Services (0.5) (0.7) - (0.2) 0.1 (0.1) Broadband 0.1 (0.1) 0.1 - 0.1 - Other Businesses (1.8) 1.5 (2.2) 0.7 (1.3) (0.1) ------ ------ ------ ------ ------- ------ Total Non-regulated Group 4.4 7.6 4.4 5.5 5.8 6.9 Corporate and Other 0.1 1.2 1.1 (2.2) (0.7) (0.8) ------ ------ ------ ------ ------- ------ Vectren Consolidated $ 45.5 $ 46.1 $ 12.5 $ (1.6) $ 13.6 $ 7.9 ====== ====== ====== ====== ====== ======
VECTREN CORPORATION HIGHLIGHTS 3 Months 12 Months (millions, except per share amounts) Ended December 31 Ended December 31 ------------------------------------- (Unaudited) 2002 2001 2002 2001 -------------------------------------- ------------------------------------- As As As As Restated Restated Restated Restated -------- -------- -------- -------- Reported Earnings: Utility Group $ 37.1 $ 18.7 $ 93.6 $ 40.1 Non-regulated Group 4.4 1.1 19.0 12.1 Corporate and Other 0.9 2.5 1.4 0.5 ------ ------ ------ ------ Vectren Consolidated $ 42.4 $ 22.3 $114.0 $ 52.7 Merger, Integration and Restructuring Costs: Utility Group $ - $ 3.1 $ - $ 17.0 Non-regulated Group - 0.9 - 2.2 Corporate and Other - 0.4 - 0.6 ----- - ------ ------ ------ Total - 4.4 - 19.8 Other Non-Recurring Items: Utility Group-Cumulative Effect of Adoption of FAS 133 $ - $ - $ - $ 1.1 Non-regulated Group-Extraordinary Loss in 2001 - - - (7.7) ----- - ------ ------ ------ Income From Operations: Utility Group $ 37.1 $ 21.8 $ 93.6 $ 56.0 Non-regulated Group Energy Marketing and Services 3.9 1.7 15.0 11.7 Coal Mining 3.3 5.2 12.2 14.2 Utility Infrastruce Services (0.8) 0.4 (1.2) (0.6) Broadband 0.1 (0.1) 0.4 (0.2) Other Businesses (2.1) (5.2) (7.4) (3.1) ------ ------ ------ ------ Total Non-regulated Group 4.4 2.0 19.0 22.0 Corporate and Other 0.9 2.9 1.4 1.1 ------ ------ ------ ------ Vectren Consolidated $ 42.4 $ 26.7 $114.0 $ 79.1 ====== ====== ====== ======
Vectren Selected Highlights 12 months 12 months Ended Ended December 31 December 31 2002 2001 ----------- ----------- Dividends Paid (per common share, 12 months $ 1.07 $ 1.03 Annualized Dividend $ 1.10 $ 1.06 Dividend Yield (at close) 4.8% 4.4% Dividend Payout Ratio 63.3% 130.4% Dividend to Book Value 8.6% 8.5% Return on Average Shareholder Equity 13.3% 6.7% Book Value Per Share $ 12.81 $ 12.40 Market to Book Value (at close) 180% 193% Common Stock Prices (VVC - NYSE) High $ 26.10 $ 24.44 Low $ 17.95 $ 19.76 Close $ 23.00 $ 23.98 Price/Earnings Ratio (trailing) 13.6 30.4 Percent Internally Generated Funds - Utility Group 86% 57% Ratio of Earnings to Fixed Charges - SEC Method Consolidated 2.9 1.8 Utility Group 3.0 1.8 VECTREN CORPORATION SELECTED GAS DISTRIBUTION 12 Months OPERATING STATISTICS Ended December 31 --------------------------- (Unaudited) 2002 2001 ---------------------------------- ---------- ----------- As Restated ----------- GAS OPERATING REVENUES (Thousands): Residential $ 607,106 $ 676,843 Commercial 211,602 240,633 Contract 82,969 95,644 Miscellaneous Revenue 7,350 6,454 ---------- ---------- $ 909,027 $1,019,574 ========== ========== GAS MARGIN (Thousands): Operating Revenues $ 909,027 $1,019,574 Cost of Gas 571,216 708,907 ---------- ---------- Margin $ 337,811 $ 310,667 ========== ========== GAS SOLD & TRANSPORTED (MDth): Residential 80,726 73,812 Commercial 31,011 28,377 Contract 95,956 97,157 ---------- ---------- 207,693 199,346 ========== ========== YEAR END GAS CUSTOMERS: Residential 882,151 868,685 Commercial 80,483 80,235 Contract 4,127 4,294 ---------- ---------- 966,761 953,214 ========== ========== WEATHER AS A PERCENT OF NORMAL: Heating Degree Days 97% 91% VECTREN CORPORATION SELECTED ELECTRIC 12 Months OPERATING STATISTICS Ended December 31 ---------------------------- (Unaudited) 2002 2001 -------------------------------------- ----------- ----------- As Restated ----------- ELECTRIC OPERATING REVENUES (Thousands): Residential $ 108,123 $ 96,274 Commercial 80,620 74,759 Industrial 90,370 82,523 Miscellaneous Revenue 5,040 6,261 ----------- ----------- Total Retail 284,153 259,817 Wholesale 323,963 121,416 ----------- ----------- $ 608,116 $ 381,233 =========== =========== ELECTRIC MARGIN (Thousands): Operating Revenues $ 608,116 $ 381,233 Cost of Fuel & Purchased Power 377,886 161,329 ----------- ----------- Margin $ 230,230 $ 219,904 =========== =========== ELECTRICITY SOLD (MWh): Residential 1,567,215 1,411,262 Commercial 1,467,780 1,383,355 Industrial 2,516,335 2,426,756 Miscellaneous Sales 18,117 19,166 ----------- ----------- Total Retail 5,569,447 5,240,539 Firm Wholesale 617,685 547,705 Non-Firm Wholesale 10,711,614 3,350,526 ----------- ----------- 16,898,746 9,138,770 =========== =========== YEAR END ELECTRIC CUSTOMERS: Residential 116,979 115,770 Commercial 16,881 17,327 Industrial 174 174 All Others 23 23 ----------- ----------- 134,057 133,294 =========== =========== WEATHER AS A PERCENT OF NORMAL: Heating Degree Days 97% 91% Cooling Degree Days 123% 97%