News Release
NIAGARA MOHAWK HOLDINGS REPORTS 2000 RESULTS
SYRACUSE, Feb. 15 - Niagara Mohawk Holdings, Inc. (NYSE: NMK), parent company of Niagara Mohawk Power Corp. (Niagara Mohawk), a regulated energy delivery company, today reported financial results for the year 2000.
Earnings before interest, taxes, depreciation and amortization (EBITDA) for the year ended December 31, 2000, were $1.13 billion, compared to a level of $1.27 billion for the year ended December 31, 1999. With respect to earnings, the company reported a 2000 loss of $46.5 million, or a loss of 28 cents per share, which includes a 1 cent per share extraordinary charge related to the early retirement of debt. This compares to a 1999 loss of $35.1 million, or a loss of 19 cents per share, which included a 13 cent per share extraordinary charge related to the early retirement of debt. As a result of the closing of the Master Restructuring Agreement and the implementation of the company’s multi-year regulatory agreement in 1998, reported earnings have been and will continue to be substantially depressed due to the non-cash charges related to the MRA regulatory asset.
Earnings for the year 2000 were positively impacted by $33.8 million, or 20 cents per share due to lower interest costs as a result of the company’s aggressive debt retirement program; by $19.4 million, or 12 cents per share for insurance proceeds and disaster relief associated with the 1998 ice storm restoration effort; and by $9.2 million, or 6 cents per share due to lower costs related to the implementation of a new customer service system in 1999.
Earnings for the year 2000 were reduced by $48.5 million, or 29 cents per share, as a result of Niagara Mohawk’s exposure to higher natural gas prices in its purchased power and generation portfolio; by $19.4 million, or 12 cents per share for lower investment tax credits and incentives related to the sale of fossil and hydroelectric generating stations, and by $10.2 million, or 6 cents per share, related to a regulatory review of those sales; by $12.8 million, or 8 cents per share, as a consequence of the second and third phases of electricity price reductions provided in Niagara Mohawk’s regulatory restructuring agreement; and by $11.6 million, or 7 cents per share, for increased costs associated with the operation of the NYISO.
Significantly higher natural gas prices impacted Niagara Mohawk’s fuel and purchased power costs during the third and fourth quarters, principally because restructured contracts with Independent Power Producers began indexing to natural gas prices in July. Fuel and purchased power costs were also higher in the third and fourth quarters because of an indexed contract with the new owner of the Albany generating station, an indexed contract with an IPP not part of the MRA, and because of Niagara Mohawk’s continued 25 percent ownership in the Roseton generating station. The Albany and Roseton stations are both fueled by oil or natural gas. With respect to its exposure to the restructured contracts with the IPPs and the Albany contract, Niagara Mohawk has taken steps to hedge against further volatility in natural gas prices, largely by purchasing NYMEX gas futures contracts through August 2001, which marks the end of the electric commodity fixed price period in Niagara Mohawk’s multi-year regulatory agreement.
The company reported a fourth-quarter 2000 loss of $44.0 million, or a loss of 27 cents per share, compared to a fourth-quarter 1999 loss of $18.2 million, or a loss of 10 cents per share. Results for the fourth quarter of 2000 were negatively impacted by $28.5 million, or 17 cents per share, as a result of Niagara Mohawk’s exposure to higher natural gas prices in its purchased power and generation portfolio.
Niagara Mohawk’s electric revenues for 2000 were $3.2 billion, down slightly from 1999. Electric revenues for the fourth quarter of 2000 were $811.2 million, up 1.8 percent compared to the same period a year ago.
Retail sales of electricity for the year and for the fourth quarter of 2000 decreased 10.3 percent and 8.9 percent, respectively, compared to the same periods in 1999, primarily reflecting that more customers chose to buy electricity from other energy service providers. Total deliveries of electricity, which include deliveries to customers who chose to buy electricity from other energy service providers, were down 1.2 percent for the year 2000, but increased 3.0 percent in the fourth quarter of 2000, compared to the same periods in 1999. Total sales of electricity in both periods were primarily impacted by weather.
Niagara Mohawk’s natural gas revenues for 2000 were $658.5 million, up 13.6 percent from 1999. Fourth-quarter 2000 natural gas revenues were $195.9 million, up 43.0 percent, compared to same period last year. Revenues in both periods were up primarily because of the higher market price of natural gas and colder weather. Niagara Mohawk does not profit from the higher market price of natural gas. The company passes the cost of the commodity directly on to customers without markup.
Retail sales of natural gas for the year and for the fourth quarter of 2000 increased 3.5 percent and 22.6 percent, respectively, compared to the same periods in 1999, primarily due to colder weather. Total gas deliveries, which includes the transportation of customer-owned gas, were up 2.0 percent for the year 2000, and up 5.7 percent in the fourth quarter of 2000.
The company will host an earnings conference call today at 2:00 p.m. EST to discuss year-end results. In order to join the conference call, please dial 888-261-9236 after 1:50 p.m. For those unable to join the call at that time, a replay will be available for one week by calling 888-243-8965.
In addition, the conference call will be webcast live and archived at http://www.NiagaraMohawk.com and http://www.StreetEvents.com. Listeners should go to either web site at least fifteen minutes before the event to download and install any necessary audio software. A replay will be available beginning approximately two hours after the conclusion of the conference call. There is no charge to access the call.
NIAGARA MOHAWK HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
In thousands of dollars
Three Months Ended Year Ended
December 31, December 31,
2000 1999 2000 1999
- ----------------------------------------------------------------------------------------------
OPERATING REVENUES:
Electric $ 972,665 $ 867,158 $3,799,926 $3,464,901
Gas 226,067 146,006 733,197 611,226
Other 857 3,340 6,149 8,059
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1,199,589 1,016,504 4,539,272 4,084,186
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OPERATING EXPENSES:
Electricity purchased 449,868 298,315 1,714,946 1,012,811
Fuel for electric generation 26,263 32,474 74,340 189,657
Gas purchased 151,414 77,533 434,044 298,120
Other operation and maintenance expenses 277,112 258,902 913,710 933,517
Amortization/accretion of MRA/IPP buyout costs 93,948 91,560 375,487 363,374
Depreciation and amortization 78,533 76,796 312,337 345,473
Other taxes 75,112 85,388 284,558 412,458
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1,152,250 920,968 4,109,422 3,555,410
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OPERATING INCOME 47,339 95,536 429,850 528,776
Allowance for other funds used during
construction 544 1,116 2,450 5,366
Other deductions (7,548) (1,291) (15,992) (1,428)
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INCOME BEFORE INTEREST CHARGES 40,335 95,361 416,308 532,714
Interest charges 108,736 108,953 440,435 492,492
Allowance for borrowed funds used during
construction (608) (1,609) (3,161) (7,252)
Preferred dividend requirement of subsidiary 7,758 9,769 31,437 36,808
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INCOME (LOSS) BEFORE INCOME TAXES (75,551) (21,752) (52,403) 10,666
Income taxes (31,528) (3,586) (6,769) 21,947
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LOSS BEFORE EXTRAORDINARY ITEM (44,023) (18,166) (45,634) (11,281)
Extraordinary item - Loss from the
extinguishment of debt, net of income taxes - - (909) (23,807)
- ----------------------------------------------------------------------------------------------
NET LOSS ($44,023) ($18,166) ($46,543) ($35,088)
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Average number of shares of common
stock outstanding (in thousands) 160,240 184,684 167,383 186,689
Basic and diluted loss per average
share of common stock before extraordinary item ($0.27) ($0.10) ($0.27) ($0.06)
Extraordinary item per average share
of common stock - - (0.01) (0.13)
- ----------------------------------------------------------------------------------------------
Basic and diluted loss per average
share of common stock ($0.27) ($0.10) ($0.28) ($0.19)
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OTHER OPEREATING DATA:
Earnings before interest charges, interest income, income taxes, depreciation and
amortization, amortization of nuclear fuel, allowance for funds used during
construction, amortization/accretion of MRA/IPP buyout cots, deferral of MRA
interest rate savings, and extrtaordinary items (EBITDA) $1,132,800 $1,267,100
Net Cash interest $ 355,700 $ 397,100
Ratio of EBITDA to net cash interest 3.2 3.2
NOTES:
- - The above information is not given in connection with any sale or offer to sell or buy any stock or security.
- - The Company files periodic reports pursuant to the Securities Exchange Act of 1934. Accordingly, with respect
to the financial information set forth above, you are requested to refer to such filings for more detailed information.
* EBITDA for the year ended December 31, 1999, which had been reported as $1,259,500, has been restated reflecting a
change in the Company's EBITDA calculation methodology.
NIAGARA MOHAWK POWER CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
In thousands of dollars
Three Months Ended Year Ended
December 31, December 31,
2000 1999 2000 1999
- ---------------------------------------------------------------------------------------------
OPERATING REVENUES:
Electric $ 811,196 $ 796,537 $3,239,253 $3,247,757
Gas 195,925 137,025 658,502 579,583
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1,007,121 933,562 3,897,755 3,827,340
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OPERATING EXPENSES:
Electricity purchased 306,055 231,252 1,175,923 807,038
Fuel for electric generation 26,263 32,474 74,340 189,657
Gas purchased 119,550 68,770 357,524 267,202
Other operation and maintenance expenses 268,484 251,762 888,067 911,746
Amortization/accretion of MRA/IPP buyout costs 93,948 91,560 375,487 363,374
Depreciation and amortization 78,399 76,675 311,803 344,930
Other taxes 74,726 85,272 283,511 411,842
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967,425 837,765 3,466,655 3,295,789
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OPERATING INCOME 39,696 95,797 431,100 531,551
Allowance for other funds used
during construction 544 1,116 2,450 5,366
Other deductions (10,737) (3,716) (27,205) (10,905)
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INCOME BEFORE INTEREST CHARGES 29,503 93,197 406,345 526,012
Allowance for borrowed funds used
during construction (608) (1,609) (3,161) (7,252)
Interest charges 108,736 108,953 440,435 492,492
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INCOME (LOSS) BEFORE INCOME TAXES (78,625) (14,147) (30,929) 40,772
Income taxes (34,919) (3,336) (9,526) 19,026
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INCOME (LOSS) BEFORE EXTRAORDINARY ITEM (43,706) (10,811) (21,403) 21,746
Extraordinary item - Loss from the
extinguishment of debt, net of income taxes - - (909) (23,807)
- ---------------------------------------------------------------------------------------------
NET LOSS (43,706) (10,811) (22,312) (2,061)
Dividends on preferred stock 7,758 9,769 31,437 36,808
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BALANCE AVAILABLE FOR COMMON STOCK ($51,464) ($20,580) ($53,749) ($38,869)
- ---------------------------------------------------------------------------------------------
NOTES:
- - The above information is not given in connection with any sale or offer to sell or buy any stock or security.
- - The Company files periodic reports pursuant to the Securities Exchange Act of 1934. Accordingly, with respect to the
financial information set forth above, you are requested to refer to such filings for more detailed information.
NIAGARA MOHAWK HOLDINGS, INC.
(Unaudited)
EARNINGS REPORT
---------------
(In thousands of dollars)
Three Months Ended Year Ended
December 31, December 31,
2000 1999 2000 1999
----------- ----------- ----------- -----------
Operating Revenues $1,199,589 $1,016,504 $4,539,272 $4,084,186
Operating Income 47,339 95,536 429,850 528,776
Loss Before Extraordinary Item (44,023) (18,166) (45,634) (11,281)
Extraordinary Item for Loss from
Extinguishment of Debt (Net) -- -- (909) (23,807)
Net Loss $ (44,023) $ (18,166) $ (46,543) $ (35,088)
Average Number of Shares of Common Stock
Outstanding (in thousands) 160,240 184,684 167,383 186,689
Basic and Diluted Loss per Average Share of
Common Stock Before Extraordinary Item $ (0.27) $ (0.10) $ (0.27) $ (0.06)
Extraordinary Item Per Average Share of
Common Stock -- -- (0.01) (0.13)
Basic and Diluted Loss per Average Share
of Common Stock $ (0.27) $ (0.10) $ (0.28) $ (0.19)
EBITDA -- -- $1,132,800 $1,267,100
Net Cash Interest -- -- $ 355,700 $ 397,100
Ratio of EBITDA to Net Cash Interest -- -- 3.2 3.2
----------- ----------- ----------- ------------
Note 1: The above information is not given in connection with any sale or offer to sell or buy
any stock or security.
Note 2: The company files periodic reports pursuant to the Securities Exchange Act of 1934.
Accordingly, with respect to the financial information set forth above, you are
requested to refer to such filings for more detailed information.
