FORM 8 - K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report - May 7, 2001
Commission Registrant, State of Incorporation I.R.S. Employer
File Number Address and Telephone Number Identification No.
0-25595 Niagara Mohawk Holdings, Inc. 16-1549726
(a New York corporation)
300 Erie Boulevard West
Syracuse, New York 13202
315.474.1511
1-2987 Niagara Mohawk Power Corporation 15-0265555
(a New York corporation)
300 Erie Boulevard West
Syracuse, New York 13202
315.474.1511
Item 5. Other Events
(a) On May 7, 2001, Niagara Mohawk Holdings, Inc. issued a press release relating to its first quarter earnings for 2001.
See attached Exhibit No. 99.
Item 7. Financial Statements and Exhibits
(c) Exhibits – Following is the list of exhibits furnished in accordance with the provisions of Item 601 of Regulation S-K,
filed as part of this current report on Form 8-K.
Exhibit No. 99 – Press release of Niagara Mohawk Holdings, Inc. issued on May 7, 2001 relating to its first quarter
earnings for 2001.
NIAGARA MOHAWK HOLDINGS, INC.
(Registrant)
Date: May 7, 2001 By: /s/ Steven W. Tasker
Steven W. Tasker
Vice President–Controller and
Principal Accounting Officer,
in his respective capacities as such
NIAGARA MOHAWK POWER CORPORATION
(Registrant)
Date: May 7, 2001 By: /s/ Steven W. Tasker
Steven W. Tasker
Vice President–Controller and
Principal Accounting Officer,
in his respective capacities as such
EXHIBIT INDEX
Following is the index of Exhibits furnished in accordance with the provisions of Item 601 of Regulation S-K, filed as part of this current report on Form 8-K.
Exhibit No. 99 - Press release of Niagara Mohawk Holdings, Inc. issued on May 7, 2001 relating to its first quarter earnings for 2001.
SYRACUSE, May 7 - Niagara Mohawk Holdings, Inc. (NYSE: NMK), parent company of Niagara Mohawk Power Corp. (Niagara Mohawk), a regulated energy delivery company, today reported earnings for the first quarter of 2001.
Earnings before interest, taxes, depreciation and amortization (EBITDA) for the twelve months ended March 31, 2001 were $1.10 billion, compared to a level of $1.13 billion for the year ended December 31, 2000.
The company reported earnings of $40.9 million, or 26 cents per share, which includes $12.8 million, or 8 cents per share for the cumulative effect of adopting Statement of Financial Accounting Standards (SFAS) No. 133 - “Accounting for Derivative Instruments and Hedging Activities.” This compares to earnings of $14.5 million, or 8 cents per share in the first quarter of 2000. Reported earnings have been and will continue to be substantially depressed due to the non-cash charges related to the Master Restructuring Agreement.
Earnings for the first quarter of 2001 were also positively impacted by $12.8 million, or 8 cents per share for lower income taxes caused by a change in the intra-period tax allocation methodology for recognizing the flow-through of certain tax benefits and liabilities; by $11.0 million, or 7 cents per share due to a credit related to New York State’s “Power For Jobs” economic development program; by $5.5 million, or 3 cents per share due to lower interest costs; and by $4.4 million, or 3 cents per share for an incentive related to the sale of the Roseton Station.
E arnings for the first quarter of 2001 were reduced by $15.8 million, or 10 cents per share, as a result of Niagara Mohawk’s exposure to higher natural gas prices in its purchased power portfolio; by $4.2 million, or 3 cents per share for a higher bad debt reserve reflecting higher gas prices to customers; and by $3.3 million, or 2 cents per share related to the third phase of electricity price reductions under the company’s regulatory restructuring agreement.
Significantly higher natural gas prices impacted Niagara Mohawk’s fuel and purchased power costs, principally because restructured contracts with Independent Power Producers began indexing to natural gas prices in July 2000. Fuel and purchased power costs were also higher because of an indexed contract with an IPP not part of the MRA. 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 fixed price period in Niagara Mohawk’s multi-year regulatory agreement.
The company reported a loss of $20.1 million, or a loss of 12 cents per share for the twelve months ended March 31, 2001, compared to a loss of $71.4 million, or a loss of 39 cents per share for the twelve months ended March 31, 2000. The loss for the twelve months ended March 31, 2001 included $12.8 million, or 8 cents per share for the cumulative effect of adopting SFAS No. 133. The twelve-month period ended March 31, 2000 includes an extraordinary item related to the cost of the early retirement of debt of $23.8 million, or 13 cents per share.
Results for the twelve months ended March 31, 2001 were increased by $24.3 million, or 15 cents per share due to lower interest expense; by $21.2 million, or 13 cents per share for higher gas margin during the twelve months ended March 31, 2001; by $19.4 million, or 12 cents per share for insurance proceeds and disaster relief associated with the 1998 ice storm restoration effort; $12.8 million, or 8 cents per share for lower income taxes caused by a change in the intra-period tax allocation methodology for recognizing the flow-through of certain tax benefits and liabilities; and by $11.0 million, or 7 cents per share due to a credit related to New York State’s “Power For Jobs” economic development program.
Results for the twelve months ended March 31, 2001 were negatively impacted by $63.4 million, or 39 cents per share as a result of Niagara Mohawk’s exposure to higher natural gas prices in its purchased power portfolio; and by $11.4 million, or 7 cents per share as a consequence of the second and third phases of electricity price reductions provided in Niagara Mohawk’s regulatory restructuring agreement.
Niagara Mohawk’s electric revenues for the first quarter of 2001 were $823.6 million, down slightly from the same period in 2000. Electric revenues for the twelve months ended March 31, 2001 were $3.2 billion, unchanged compared to the same period a year ago.
Retail sales of electricity for the three months and twelve months ended March 31, 2001 decreased 0.8 percent and 8.6 percent, respectively, compared to the same periods in 2000, 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 up 1.1 percent for the first quarter of 2001, and down 0.9 percent for the twelve months ended March 31, 2001, compared to the same periods in 2000.
Niagara Mohawk’s natural gas revenues for the first quarter of 2001 were $356.1 million, up 44.9 percent from the same period in 2000. For the twelve months ended March 31, 2001, natural gas revenues were $768.8 million, up 32.7 percent, compared to the same period in 2000. Revenues in both periods were up primarily because of the higher market price of natural gas. 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 three months and twelve months ended March 31, 2001, decreased 0.7 percent and increased 7.0 percent, respectively, compared to the same periods in 2000. The increase in the twelve-month period was primarily due to colder weather. Total gas deliveries, which includes the transportation of customer-owned gas, were down 3.8 percent for the first quarter of 2001, and up 3.0 percent for the twelve months ended March 31, 2001.
Consolidated Statements of Income will be filed with the Securities and Exchange Commission on Form 8-K.
The company will host an earnings conference call today at 10:00 a.m. EDT to discuss first quarter earnings. In order to join the conference call, domestic callers may dial 877-692-2587; international callers may dial 973-633-1010 after 9:50 a.m. For those unable to join the call at that time, a replay will be available for one week by calling 877-519-4471, pin #2559229; the international replay number is 973-341-3080, pin #2559229.
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.
NOTE:This release contains statements that constitute forward-looking information. Such statements are subject to certain risks, uncertainties and assumptions. All of these forward-looking statements are based on estimates and assumptions made by the company’s management which, although believed by the company’s management to be reasonable, are inherently uncertain. Such forward-looking statements are not guarantees of future performance or results and involve certain risks and uncertainties. Actual results or developments may differ materially from the forward-looking statements as a result of various factors.
NIAGARA MOHAWK HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
In thousands of dollars
Three Months Ended Twelve Months Ended
March 31, March 31,
2001 2000 2001 2000
- ----------------------------------------------------------------------------------------------------------------
OPERATING REVENUES:
Electric $ 977,224 $ 929,269 $3,847,881 $3,529,492
Gas 389,813 264,339 858,671 621,158
Other 180 977 5,352 8,987
- ----------------------------------------------------------------------------------------------------------------
1,367,217 1,194,585 4,711,904 4,159,637
- ----------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES:
Electricity purchased 440,675 375,055 1,780,566 1,212,574
Fuel for electric generation 14,317 13,330 75,327 145,893
Gas purchased 280,364 156,986 557,422 339,848
Other operation and maintenance expenses 258,495 222,868 949,337 943,730
Amortization/accretion of MRA/IPP buyout costs 91,073 93,658 372,902 366,719
Depreciation and amortization 77,887 77,950 312,274 328,607
Other taxes 50,583 68,332 266,809 358,932
- ----------------------------------------------------------------------------------------------------------------
1,213,394 1,008,179 4,314,637 3,696,303
- ----------------------------------------------------------------------------------------------------------------
OPERATING INCOME 153,823 186,406 397,267 463,334
Other income (deductions) 2,334 (4,918) (6,290) 423
- ----------------------------------------------------------------------------------------------------------------
INCOME BEFORE INTEREST CHARGES 156,157 181,488 390,977 463,757
Interest charges 102,895 111,332 428,837 466,297
Preferred dividend requirement of subsidiary 7,758 7,904 31,291 35,688
- ----------------------------------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE INCOME TAXES 45,504 62,252 (69,151) (38,228)
Income taxes 17,380 47,778 (37,167) 9,411
- ----------------------------------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEM AND CUMULATIVE
EFFECT OF A CHANGE IN ACCOUNTING PRINCIPLE 28,124 14,474 (31,984) (47,639)
Extraordinary item - Loss from the extinguishment of debt,
net of tax - - (909) (23,807)
Cumulative effect of change in accounting principle, net
of tax 12,790 - 12,790 -
- ----------------------------------------------------------------------------------------------------------------
NET INCOME (LOSS) $ 40,914 $ 14,474 $ (20,103) $ (71,446)
- ----------------------------------------------------------------------------------------------------------------
Average number of shares of common
stock outstanding (in thousands) 160,240 177,352 163,136 184,201
Basic and diluted earnings (loss) per average share of
common stock before extraordinary item and cumulative
effect of change in accounting principle $ 0.18 $ 0.08 $ (0.20) $ (0.26)
Extraordinary item per average share of common stock - - -- (0.13)
Cumulative effect of change in accounting principle 0.08 - 0.08 -
- ----------------------------------------------------------------------------------------------------------------
Basic and diluted earnings (loss) per average
share of common stock $ 0.26 $ 0.08 $ (0.12) $ (0.39)
- ----------------------------------------------------------------------------------------------------------------
OTHER OPERATING DATA:
Earnings before interest charges, interest income, income taxes,
depreciation and amortization, and other regulatory adjustments (EBITDA) $1,102,600 $1,182,800
Net cash interest $ 349,300 $ 377,000
Ratio of EBITDA to net cash interest 3.2 3.1
- - 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 POWER CORPORATIONAND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
In thousands of dollars
Three Months Ended Twelve Months Ended
March 31, March 31,
2001 2000 2001 2000
- -----------------------------------------------------------------------------------------------------------
OPERATING REVENUES:
Electric $ 823,566 $ 828,046 $3,234,773 $3,226,057
Gas 356,140 245,847 768,795 579,155
- -----------------------------------------------------------------------------------------------------------
1,179,706 1,073,893 4,003,568 3,805,212
- -----------------------------------------------------------------------------------------------------------
OPERATING EXPENSES:
Electricity purchased 291,053 279,890 1,187,086 925,963
Fuel for electric generation 14,317 13,330 75,327 145,893
Gas purchased 249,760 138,432 468,852 298,288
Other operation and maintenance expenses 248,625 217,656 919,036 919,798
Amortization/accretion of MRA/IPP buyout costs 91,073 93,658 372,902 366,719
Depreciation and amortization 77,768 77,832 311,739 328,070
Other taxes 50,403 67,995 265,919 358,114
- -----------------------------------------------------------------------------------------------------------
1,022,999 888,793 3,600,861 3,342,845
- -----------------------------------------------------------------------------------------------------------
OPERATING INCOME 156,707 185,100 402,707 462,367
Allowance for other funds used during construction 797 (264) 3,511 3,013
Other deductions (1,586) (7,101) (21,690) (12,078)
- -----------------------------------------------------------------------------------------------------------
INCOME BEFORE INTEREST CHARGES 155,981 177,735 384,528 453,302
Allowance for borrowed funds used during construction (906) 281 (4,348) (4,567)
Interest charges 103,801 111,051 433,185 470,864
- -----------------------------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE INCOME TAXES 53,023 66,403 (44,309) (12,995)
Income taxes 17,774 45,570 (37,322) 4,282
- -----------------------------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEM 35,249 20,833 (6,987) (17,277)
Extraordinary item - Loss from the extinguishment
of debt, net of income taxes - - (909) (23,807)
- -----------------------------------------------------------------------------------------------------------
NET INCOME (LOSS) 35,249 20,833 (7,896) (41,084)
Dividends on preferred stock 7,758 7,904 31,291 35,688
- -----------------------------------------------------------------------------------------------------------
BALANCE AVAILABLE FOR COMMON STOCK $ 27,491 $ 12,929 $ (39,187) $ (76,772)
- -----------------------------------------------------------------------------------------------------------
- - 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 Twelve Months Ended
March 31, March 31,
2001 2000 2001 2000
----------- ----------- ---------- -----------
Operating Revenues $1,367,217 $1,194,585 $4,711,904 $4,159,637
Operating Income 153,823 186,406 397,267 463,334
Income (Loss) Before Extraordinary Item
and Cumulative Effect of a Change in
Accounting Principle 28,124 14,474 (31,984) (47,639)
Extraordinary Item for Loss from
Extinguishment of Debt (Net) -- -- (909) (23,807)
Cumulative Effect of Change in Accounting
Principle 12,790 -- 12,790 --
Net Income (Loss) $ 40,914 $ 14,474 $ (20,103) $ (71,446)
Average Number of Shares of
Common Stock Outstanding
(in thousands) 160,240 177,352 163,136 184,201
Basic and Diluted Earnings (Loss) per
Average Share of Common Stock Before
Extraordinary Item and Cumulative Effect
of Change in Accounting Principle $ 0.18 $ 0.08 $ (0.20) $ (0.26)
Extraordinary Item Per Average Share of
Common Stock -- -- -- (0.13)
Cumulative Effect of Change in Accounting
Principle $ 0.08 $ -- $ 0.08 $ --
Basic and Diluted Earnings (Loss) per
Average Share of Common Stock $ 0.26 $ 0.08 $ (0.12) $ (0.39)
----------- ----------- ----------- -----------
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.