NGI The Weekly Gas Market Report
After a busy 2000, Cinergy Corp. reported a slight decrease from1999 levels in net income in the fourth quarter, but the company’send-of-year net income showed growth over the year before. Netincome after taxes for the fourth quarter was approximately $92million ($0.58 per share), comparedÿto about $93.5 million ($0.60per share) for the equivalent time period last year.
For the entire year 2000, Cinergy posted a little over $398million ($2.51 per share) after taxes, compared with 1999’s netincome of almost $395 million ($2.54 per share). The company saidEPS showed an $0.11 decrease in 2000 due to a one time chargerelating to its agreement with the Environmental Information Agency(EPA). Cinergy said revenues almost doubled in the fourth quarter,helping to bring the company’s full year mark of $5.9 billion in1999 to $8.4 billion for 2000.
“2000 was a year of significant momentum for Cinergy,” saidJames E. Rogers, CEO of Cinergy. “We resolved a number ofuncertainties facing the company through the completion of theelectric restructuring transition plan in Ohio and the tentativeagreement on the EPA lawsuit. In addition, we solidified ourregional leadership position in our energy merchant business byincreasing revenues approximately $2.2 billion while more thandoubling trading volumes. By creating Cinergy Ventures, we focusedon the future through investments in energy-related technologiesthat we can apply in serving customers and improving ouroperations.”
Cinergy’s announcement comes just a few days after Moody’sassigned negative outlooks to the debt and preferred stocksecurities of the company, and all of its subsidiaries, in responseto several recent Cinergy announcements including: the purchase oftwo peaking plants from Enron; a tenative deal with EPA and twoCinergy utility subsidiaries (Cincinnati Gas & Electric and PSIEnergy); and the uncertainty surrounding CG&E’spost-deregulation corporate and financial structure. Its agreementwith the EPA and several Northeast states stems from Clean Air Actviolations involving Cinergy’s coal-fired power plants. The companyestimates its related costs will be $1.4 billion through 2013.
Despite the negative outlook, Cinergy remains confident aboutits future, reaffirming its target earnings per share of $2.75 for2001. Rogers said the company is now focusing on four main businesssegments, energy merchant, power technology and infrastructureservices, regulated and integrated utility, and regulatedtransmission and distribution.
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