SYRACUSE, August 13 – Niagara Mohawk Holdings, Inc. (NYSE: NMK), parent company of Niagara Mohawk Power Corp. (Niagara Mohawk), a regulated energy delivery company, today reported results for the second quarter of 2001.
Earnings before interest, taxes, depreciation and amortization (EBITDA) for the twelve months ended June 30, 2001, were $1.09 billion, compared to a level of $1.10 billion for the twelve months ended March 31, 2001.
The company reported a loss of $80.0 million, or a loss of 50 cents per share. This compares to a loss of $19.7 million or a loss of 12 cents per share in the second quarter of 2000. The second quarter of 2001 includes a charge of $44.0 million or 27 cents per share due to the recognition of an impairment charge as a result of the company’s assessment of its investment in a development stage telecommunications company. The second quarter of 2000 included an extraordinary item related to the cost of the early retirement of debt of $0.9 million, or 1 cent per share. 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 second quarter of 2001 were also reduced by $14.7 million, or 9 cents per share, as a result of higher 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 $10.5 million, or 7 cents per share, as a result of Niagara Mohawk’s exposure to higher natural gas prices in its purchased power portfolio; and by $1.8 million or 1 cent per share as a result of the third phase of electricity price reductions implemented as part of Niagara Mohawk’s current electric regulatory agreement.
Earnings for the second quarter of 2001 were positively impacted by $6.5 million, or 4 cents per share due to lower interest costs; and by $3.3 million, or 2 cents per share due to a credit related to New York State’s “Power For Jobs” economic development program.
The company reported a loss of $80.4 million, or a loss of 50 cents per share for the twelve months ended June 30, 2001, compared to a loss of $55.1 million, or a loss of 31 cents per share for the twelve months ended June 30, 2000. The loss for the twelve months ended June 30, 2001 includes a charge of $44.0 million or 27 cents per share due to the recognition of an impairment charge as a result of the company’s assessment of its investment in a development stage telecommunications company and also includes a $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.” The twelve-month period ended June 30, 2000 included an extraordinary item related to the cost of the early retirement of debt of $14.0 million, or 8 cents per share.
Results for the twelve months ended June 30, 2001 were increased by $19.4 million, or 12 cents per share for insurance proceeds and disaster relief associated with the 1998 ice storm restoration effort; by $17.6 million, or 11 cents per share due to lower interest expense; by $17.7 million, or 11 cents per share for higher gas margin during the twelve months ended June 30, 2001; and by $14.5 million, or 9 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 June 30, 2001 were negatively impacted by $70.6 million, or 44 cents per share as a result of Niagara Mohawk’s exposure to higher natural gas prices in its purchased power portfolio; and by $9.7 million, or 6 cents per share as a consequence of the second and third phases of electricity price reductions provided in Niagara Mohawk’s current electric regulatory agreement.
Niagara Mohawk’s electric revenues for the second quarter of 2001 were $781.2 million, up 1.4 percent from the same period in 2000. Electric revenues for the twelve months ended June 30, 2001 were $3.2 billion, down slightly from same period a year ago.
Retail sales of electricity for the three months and twelve months ended June 30, 2001 decreased 0.9 percent and 6.3 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 4.7 percent for the second quarter of 2001, and up 1.7 percent for the twelve months ended June 30, 2001, compared to the same periods in 2000.
Niagara Mohawk’s natural gas revenues for the second quarter of 2001 were $165.0 million, up 20.4 percent from the same period in 2000. For the twelve months ended June 30, 2001, natural gas revenues were $796.8 million, up 34.2 percent, compared to same period in 2000. Revenues in both periods were up primarily because of the higher market price of natural gas. The company passes the cost of the commodity directly on to customers without markup. Niagara Mohawk does not profit from the higher market price of natural gas.
Retail sales of natural gas for the three months and twelve months ended June 30, 2001, decreased 6.3 percent and increased 2.8 percent, respectively, compared to the same periods in 2000. The changes in both periods were primarily weather-related. Total gas deliveries, which includes the transportation of customer-owned gas, were down 11.1 percent and 6.6 percent, respectively, for the three months and twelve months ended June 30, 2001.
Consolidated Statements of Income will be filed with the Securities and Exchange Commission on Form 10-Q.
The company will host an earnings conference call today at 10:00 a.m. (EDT) to discuss second quarter results. In order to join the conference call, domestic callers may dial 877-692-2588; international callers may dial 973-628-6885 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 #2736277; the international replay number is 973-341-3080, pin #2736277.
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.
EXHIBIT NO. 99-1
NIAGARA MOHAWK HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
In thousands of dollars
Three Months Ended Six Months Ended Twelve Months Ended
June 30, June 30, June 30,
2001 2000 2001 2000 2001 2000
- --------------------------------------------------------------------------------------------------------------------------
OPERATING REVENUES:
Electric $ 904,247 $ 893,145 $1,881,471 $1,822,414 $3,858,983 $3,636,128
Gas 185,418 151,838 575,231 416,177 892,251 645,192
Other 132 511 312 1,488 4,973 9,490
-----------------------------------------------------------------------
1,089,797 1,045,494 2,457,014 2,240,079 4,756,207 4,290,810
-----------------------------------------------------------------------
OPERATING EXPENSES:
Electricity purchased 411,240 407,582 851,915 782,637 1,784,224 1,400,369
Fuel for electric generation 7,382 15,644 21,699 28,974 67,065 114,527
Gas purchased 111,263 79,994 391,627 236,980 588,691 363,316
Other operation and maintenance expenses 258,043 224,501 516,538 447,369 982,879 942,608
Amortization/accretion of MRA/IPP buyout costs 91,072 93,978 182,145 187,636 369,996 369,749
Depreciation and amortization 79,217 78,362 157,104 156,312 313,129 312,860
Other taxes 65,225 70,442 115,808 138,774 261,592 330,210
-----------------------------------------------------------------------
1,023,442 970,503 2,236,836 1,978,682 4,367,576 3,833,639
-----------------------------------------------------------------------
OPERATING INCOME 66,355 74,991 220,178 261,397 388,631 457,171
Other income (deductions) (46,802) 2,553 (44,468) (2,365) (55,645) 4,987
-----------------------------------------------------------------------
INCOME BEFORE INTEREST CHARGES 19,553 77,544 175,710 259,032 332,986 462,158
Interest charges 99,592 109,565 202,487 220,897 418,864 445,902
Preferred dividend requirement of subsidiary 7,757 7,904 15,515 15,808 31,144 34,568
-----------------------------------------------------------------------
INCOME (LOSS) BEFORE INCOME TAXES (87,796) (39,925) (42,292) 22,327 117,022 (18,312)
Income taxes (7,761) (21,116) 9,619 26,662 (23,812) 22,839
-----------------------------------------------------------------------
LOSS BEFORE EXTRAORDINARY ITEM AND
CUMULATIVE EFFECT OF A CHANGE IN
ACCOUNTING PRINCIPLE (80,035) (18,809) (51,911) (4,335) (93,210) (41,151)
Extraordinary item - Loss from the extinguishment
of debt, net of tax - (909) - (909) - (13,966)
Cumulative effect of a change in accounting
principle, net of tax - - 12,790 - 12,790 -
-----------------------------------------------------------------------
NET LOSS $ (80,035) $ (19,718) $ (39,121) $ (5,244) $ (80,420) $ (55,117)
-----------------------------------------------------------------------
Average number of shares of common
stock outstanding (in thousands) 160,240 171,088 160,240 174,220 160,432 180,154
Basic and diluted loss per average share of
common stock before extraordinary item and
cumulative effect of change in accounting
principle $ (0.50) $ (0.11) $ (0.32) $ (0.02) $ (0.58) $ (0.23)
Extraordinary item per average share of
common stock - (0.01) - (0.01) - (0.08)
Cumulative effect of change in accounting
principle - - 0.08 - 0.08 -
-----------------------------------------------------------------------
Basic and diluted earnings (loss) per average
share of common stock $ (0.50) $ (0.24) $ 0.03 $ (0.03) $ (0.50) $ (0.31)
=======================================================================
OTHER OPERATING DATA:
Earnings before interest charges, interest income, income taxes, depreciation and
amortization, and other non-cash items, including amortization of nuclear fuel, allowance
for funds used during construction, amortization/accretion of MRA/IPP buyout costs, deferral
of MRA interest rate savings, and non-recurring and extraordinary items $1,086,919 $1,170,339
Net cash interest $ 341,489 $ 359,326
Ratio of EBITDA to net cash interest 3.2 3.3
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.
EXHIBIT NO. 99-2
NIAGARA MOHAWK POWER CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
In thousands of dollars
Three Months Ended Six Months Ended Twelve Months Ended
June 30, June 30, June 30,
2001 2000 2001 2000 2001 2000
- ---------------------------------------------------------------------------------------------------------------------
OPERATING REVENUES:
Electric $781,175 $770,226 $1,604,741 $1,598,272 $3,245,722 $3,248,397
Gas 164,976 136,978 521,116 382,825 796,793 593,558
-------------------------------------------------------------------
946,151 907,204 2,125,857 1,981,097 4,042,515 3,841,955
OPERATING EXPENSES:
-------------------------------------------------------------------
Electricity purchased 283,495 286,192 574,548 566,082 1,184,389 1,028,796
Fuel for electric generation 7,382 15,644 21,699 28,974 67,065 114,527
Gas purchased 91,726 65,533 341,486 203,965 495,045 312,407
Other operation and maintenance expenses 253,546 219,856 502,171 437,512 952,726 917,356
Amortization/accretion of MRA/IPP buyout costs 91,072 93,978 182,145 187,636 369,996 369,749
Depreciation and amortization 79,093 78,212 156,861 156,044 312,620 312,303
Other taxes 65,041 70,257 115,444 138,252 260,703 329,383
-------------------------------------------------------------------
871,355 829,672 1,894,354 1,718,465 3,642,544 3,384,521
-------------------------------------------------------------------
OPERATING INCOME 74,796 77,532 231,503 262,632 399,971 457,434
Allowance for borrowed funds used during
construction 397 1,104 1,195 840 2,805 2,859
Other deductions (2,305) (1,131) (3,892) (8,232) (22,865) (7,883)
-------------------------------------------------------------------
INCOME BEFORE INTEREST CHARGES 72,888 77,505 228,806 255,240 379,911 452,410
Allowance for borrowed funds used during
construction (471) (1,521) (1,377) (1,240) (3,298) (4,252)
Interest charges 100,063 111,086 203,864 222,137 422,162 450,154
-------------------------------------------------------------------
INCOME (LOSS) BEFORE INCOME TAXES (26,704) (32,060) 26,319 34,343 (38,953) 6,508
Income taxes (4,462) (20,283) 13,312 25,287 (21,501) 18,649
-------------------------------------------------------------------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEM (22,242) (11,777) 13,007 9,056 (17,452) (12,141)
Extraordinary item - Loss from the extinguishment
of debt, net of income taxes - (909) - (909) - (13,966)
-------------------------------------------------------------------
NET INCOME (LOSS) (22,242) (12,686) 13,007 8,147 (17,452) (26,107)
Dividends on preferred stock 7,757 7,904 15,515 15,808 31,144 34,568
-------------------------------------------------------------------
BALANCE AVAILABLE FOR COMMON STOCK $(29,999) $(20,590) $ (2,508) $ (7,661) $ (48,596) $ (60,675)
===================================================================
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.
EXHIBIT NO. 99-3
NIAGARA MOHAWK HOLDINGS, INC.
(Unaudited)
EARNINGS REPORT
(In thousands of dollars)
Three Months Ended Six Months Ended Twelve Months Ended
June 30, June 30, June 30,
2001 2000 2001 2000 2001 2000
------------------------------------------------------------------------
Operating Revenues $1,089,797 $1,045,494 $2,457,014 $2,240,079 $4,756,207 $4,290,810
Operating Income 66,355 74,991 220,178 261,397 388,631 457,171
Loss Before Extraordinary Item and
Cumulative Effect of a Change in Accounting Principle (80,035) (18,809) (51,911) (4,335) (93,210) (41,151)
Extraordinary Item for Loss from Extinguishment
of Debt (Net of Income Taxes) -- (909) -- (909) -- (13,966)
Cumulative Effect of Change in Accounting
Principle (Net of Income Taxes) -- -- 12,790 -- 12,790 --
Net Loss $(80,035) $(19,718) $(39,121) $(5,244) $(80,420) $(55,117)
Average Number of Shares of Common Stock Outstanding
(in thousands) 160,240 171,088 160,240 174,220 160,432 180,154
Basic and Diluted Loss per Average Share of Common
Stock Before Extraordinary Item and Cumulative Effect
of Change in Accounting Principle $(0.50) $(0.11) $(0.32) $(0.02) $(0.58) ($0.23)
Extraordinary Item per Average Share of Common Stock -- (0.01) -- (0.01) -- (0.08)
Cumulative Effect of Change in Accounting Principle -- -- 0.08 -- 0.08 --
Basic and Diluted loss per Average Share
of Common Stock $(0.50) $(0.12) $0.24 $(0.03) $(0.50) $(0.31)
------------------------------------------------------------------------
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.
