News Release
Exhibit No. 99
NIAGARA MOHAWK HOLDINGS REPORTS THIRD QUARTER 2001 EARNINGS
SYRACUSE, Nov. 13 - 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 third quarter of 2001.
Earnings before interest, taxes, depreciation and amortization (EBITDA) for the 12 months ended Sept. 30, 2001, were $1.10 billion, compared to a level of $1.09 billion for the 12 months ended June 30, 2001.
The company reported earnings of $4.2 million, or 3 cents per share. This compares to earnings of $2.7 million or 2 cents per share in the third quarter of 2000. Reported earnings have been and will continue to be substantially depressed due to the non-cash charges related to the 1998 Master Restructuring Agreement with a group of independent power producers.
Results for the third quarter of 2001 include an $80.0 million charge ($123.0 million pre-tax), or 50 cents per share, for the reduction in unrecovered nuclear investment as part of a regulatory settlement agreement on the sale of Niagara Mohawk’s interest in the Nine Mile Point Nuclear Station. On Nov. 7, 2001, Niagara Mohawk announced that it had completed the sale of its nuclear assets to Constellation Nuclear.
Earnings for the third quarter of 2001 were positively impacted by $79.7 million, or 50 cents per share as a result of the recognition of unamortized investment tax credits upon the sale of the nuclear plants; by $8.6 million, or 5 cents per share due to lower interest costs; by $7.0 million, or 4 cents per share as a result of lower natural gas prices in the company’s purchased power portfolio; and by $3.2 million, or 2 cents per share due to higher deliveries of electricity to residential customers.
Earnings for the third quarter of 2000 included $19.4 million, or 12 cents per share, of insurance proceeds and disaster relief associated with the 1998 ice storm restoration effort.
The company reported a loss of $79.0 million, or a loss of 49 cents per share for the 12 months ended Sept. 30, 2001, compared to a loss of $20.7 million, or a loss of 12 cents per share for the 12 months ended Sept. 30, 2000. The loss for the 12 months ended Sept. 30, 2001 reflects an $80.0 million after-tax charge, or 50 cents per share, for the reduction in unrecovered nuclear investment connected with the sale of the Nine Mile Point Nuclear Station, and a charge of $44.0 million or 27 cents per share due to the recognition of an impairment charge in connection with the company’s investment in a development stage telecommunications company. Results for the 12 months ended Sept. 30, 2001 were also negatively impacted by $44.9 million, or 28 cents per share as a result of the company’s exposure to higher natural gas prices in its purchased power portfolio through Aug. 31, 2001. Effective Sept. 1, 2001, in accordance with the company’s current regulatory agreement, the commodity cost of electricity is passed directly on to customers.
Results for the 12-month period ended Sept. 30, 2001 were favorably impacted by $79.7 million, or 50 cents per share to reflect the recognition of unamortized investment tax credits upon the sale of the nuclear plants; $20.0 million, or 12 cents per share due to lower interest expense; by $17.7 million, or 11 cents per share due to a credit related to New York State’s “Power For Jobs” economic development program; and by a gain of $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 12-month period ended Sept. 30, 2000 included an extraordinary item related to the cost of the early retirement of debt of $0.9 million, or 1 cent per share, and also included $19.4 million, or 12 cents per share, for insurance proceeds and disaster relief associated with the 1998 ice storm restoration effort.
Niagara Mohawk’s electric revenues for the third quarter of 2001 were $940.9 million, up 13.4 percent from the same period in 2000. Electric revenues for the 12 months ended Sept. 30, 2001 were $3.4 billion, up 4.1 percent from same period a year ago.
Retail sales of electricity for the three months and 12 months ended Sept. 30, 2001 increased 1.6 percent and decreased 2.3 percent, respectively, compared to the same periods in 2000. Total deliveries of electricity, which include deliveries to customers who chose to buy electricity from other energy service providers, were up 26.1 percent for the third quarter of 2001, and up 8.8 percent for the 12 months ended Sept. 30, 2001, compared to the same periods in 2000. Total deliveries of electricity and total electric revenues both increased for the three-month and 12-month periods ended Sept. 30, 2001, primarily as a result of higher sales to the New York Independent System Operator (NYISO). The increased revenues from sales to the NYISO were offset by higher electricity purchased costs.
Niagara Mohawk’s natural gas revenues for the third quarter of 2001 were $69.1 million, down 13.4 percent from the same period in 2000. For the 12 months ended Sept. 30, 2001, natural gas revenues were $786.1 million, up 31.1 percent, compared to same period in 2000. Revenues in both periods were primarily influenced by the market price of natural gas. The company passes the commodity cost of natural gas directly on to customers without markup.
Retail sales of natural gas for the three months and 12 months ended Sept. 30, 2001, decreased 7.9 percent and increased 2.6 percent, respectively, compared to the same periods in 2000. Total gas deliveries, which includes the transportation of customer-owned gas, were up 1.0 percent and down 4.8 percent, respectively, for the three months and 12 months ended Sept. 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 11 a.m. EST to discuss third quarter results. In order to join the conference call, domestic callers should dial 877-825-5811; international callers should dial 973-872-3100. For those unable to join the call at that time, a replay will be available beginning approximately two hours after the conclusion of the conference call. The replay will be available for one week and there is no charge to access the call. The domestic replay number is 877-519-4471, pin #2922972; the international replay number is 973-341-3080, pin #2922972.
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.
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 Nine Months Ended Twelve Months Ended
September 30, September 30, September 30,
2001 2000 2001 2000 2001 2000
- ---------------------------------------------------------------------------------------------------------------------------
OPERATING REVENUES:
Electric $1,056,476 $1,004,847 $2,937,947 $2,827,261 $3,910,612 $3,694,419
Gas 77,553 90,953 652,784 507,130 878,851 653,136
Other 406 3,804 718 5,292 1,575 8,632
- ---------------------------------------------------------------------------------------------------------------------------
1,134,435 1,099,604 3,591,449 3,339,683 4,791,038 4,356,187
- ---------------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES:
Electricity purchased 501,049 482,441 1,352,964 1,265,078 1,802,832 1,563,393
Fuel for electric generation 9,286 19,103 30,985 48,077 57,248 80,551
Gas purchased 27,167 45,650 418,794 282,630 570,208 359,684
Other operation and maintenance expenses 225,388 189,229 741,926 636,598 1,019,038 895,979
Disallowed nuclear investment costs 123,000 - 123,000 - 123,000 -
Amortization/accretion of MRA/IPP buyout costs 90,743 93,903 272,888 281,539 366,836 373,099
Depreciation and amortization 79,399 77,492 236,503 233,804 315,036 310,600
Other taxes 65,475 70,672 181,283 209,446 256,395 294,834
- ---------------------------------------------------------------------------------------------------------------------------
1,121,507 978,490 3,358,343 2,957,172 4,510,593 3,878,140
- ---------------------------------------------------------------------------------------------------------------------------
OPERATING INCOME 12,928 121,114 233,106 382,511 280,445 478,047
Impairment charge on investment - - (44,000) - (44,000) -
Other deductions (9,479) (4,173) (9,947) (6,538) (16,951) (6,713)
- ---------------------------------------------------------------------------------------------------------------------------
INCOME BEFORE INTEREST CHARGES 3,449 116,941 179,159 375,973 219,494 471,334
Interest charges 95,094 108,249 297,581 329,146 405,709 436,490
Preferred dividend requirement of subsidiary 7,724 7,871 23,239 23,679 30,997 33,448
- ---------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE INCOME TAXES (99,369) 821 (141,661) 23,148 (217,212) 1,396
Income tax expense (benefit) (103,555) (1,903) (93,936) 24,759 (125,464) 21,173
- ---------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEM AND
CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING
PRINCIPLE 4,186 2,724 (47,725) (1,611) (91,748) (19,777)
Extraordinary item - Loss from the
extinguishment of debt, net of tax - - - (909) - (909)
Cumulative effect of change in accounting
principle, net of tax - - 12,790 - 12,790 -
- ---------------------------------------------------------------------------------------------------------------------------
NET INCOME (LOSS) $ 4,186 $ 2,724 $ (34,935) $ (2,520) $ (78,958) $ (20,686)
- ---------------------------------------------------------------------------------------------------------------------------
Average number of shares of common
stock outstanding (in thousands) 160,240 161,001 160,240 169,782 160,240 173,528
Basic and diluted earnings (loss) per average
share of common stock before extraordinary
item and cumulative effect of change in
accounting principle $ 0.03 $ 0.02 $ (0.30) $ (0.01) $ (0.57) $ (0.11)
Extraordinary item per average share of
common stock - - - - - (0.01)
Cumulative effect of change in accounting
principle - - 0.08 - 0.08 -
- ---------------------------------------------------------------------------------------------------------------------------
Basic and diluted earnings (loss) per average
share of common stock $ 0.03 $ 0.02 $ (0.22) $ (0.01) $ (0.49) $ (0.12)
- ---------------------------------------------------------------------------------------------------------------------------
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, cumulative effect of a change in accounting principle, and non-recurring and
extraordinary items (EBITDA) $1,096,108 $1,180,787
Net cash interest $ 332,148 $ 351,620
Ratio of EBITDA to net cash interest 3.3 3.4
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 POWER CORPORATIONAND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
In thousands of dollars
Three Months Ended Nine Months Ended Twelve Months Ended
September 30, September 30, September 30,
2001 2000 2001 2000 2001 2000
- ---------------------------------------------------------------------------------------------------------------------------
OPERATING REVENUES:
Electric $ 940,854 $829,785 $2,545,595 $2,428,057 $3,356,791 $3,224,594
Gas 69,092 79,752 590,208 462,577 786,133 599,602
1,009,946 909,537 3,135,803 2,890,634 4,142,924 3,824,196
- ---------------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES:
Electricity purchased 381,619 303,786 956,167 869,868 1,262,222 1,101,120
Fuel for electric generation 9,286 19,103 30,985 48,077 57,248 80,551
Gas purchased 20,657 34,009 362,143 237,974 481,693 306,744
Other operation and maintenance expenses 221,256 182,071 723,427 619,583 991,911 871,345
Disallowed nuclear investment costs 123,000 - 123,000 - 123,000 -
Amortization/accretion of MRA/IPP buyout costs 90,743 93,903 272,888 281,539 366,836 373,099
Depreciation and amortization 79,287 77,360 236,148 233,404 314,547 310,079
Other taxes 65,319 70,533 180,763 208,785 255,489 294,057
991,167 780,765 2,885,521 2,499,230 3,852,946 3,336,995
- ---------------------------------------------------------------------------------------------------------------------------
OPERATING INCOME 18,779 128,772 250,282 391,404 289,978 487,201
Allowance for borrowed funds used during construction 613 1,066 1,808 1,906 2,352 3,022
Other deductions (12,912) (8,236) (16,804) (16,468) (27,541) (20,187)
- ---------------------------------------------------------------------------------------------------------------------------
INCOME BEFORE INTEREST CHARGES 6,480 121,602 235,286 376,842 264,789 470,036
Allowance for borrowed funds used during construction (743) (1,313) (2,120) (2,553) (2,728) (4,162)
Interest charges 95,837 109,562 299,701 331,699 408,437 440,652
- ---------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE INCOME TAXES (88,614) 13,353 (62,295) 47,696 (140,920) 33,546
Income tax expense (benefit) (102,965) 106 (89,653) 25,393 (124,572) 22,054
- ---------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEM 14,351 13,247 27,358 22,303 (16,348) 11,492
Extraordinary item - Loss from the extinguishment
of debt, net of income taxes - - - (909) - (909)
- ---------------------------------------------------------------------------------------------------------------------------
NET INCOME (LOSS) 14,351 13,247 27,358 21,394 (16,348) 10,583
Dividends on preferred stock 7,724 7,871 23,239 23,679 30,997 33,448
- ---------------------------------------------------------------------------------------------------------------------------
BALANCE AVAILABLE FOR COMMON STOCK $ 6,627 $ 5,376 $ 4,119 $ (2,285) $ (47,345) $ (22,865)
- ---------------------------------------------------------------------------------------------------------------------------
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 Nine Months Ended Twelve Months Ended
September 30, September 30, September 30,
2001 2000 2001 2000 2001 2000
---------------------------------------------------------------------------
Operating Revenues $1,134,435 $1,099,604 $3,591,449 $3,339,683 $4,791,038 $4,356,187
Operating Income 12,928 121,114 233,106 382,511 280,445 478,047
Income (Loss) Before Extraordinary Item and
Cumulative Effect of a Change in Accounting Principle 4,186 2,724 (47,725) (1,611) (91,748) (19,777)
Extraordinary Item for Loss from Extinguishment
of Debt (Net) - - - (909) - (909)
Cumulative Effect of Change in Accounting
Principle (Net) - - 12,790 - 12,790 -
Net Income (Loss) $ 4,186 $ 2,724 $ (34,935) $ (2,520) $ (78,958) $ (20,686)
Average Number of Shares of Common Stock
Outstanding (in thousands) 160,240 161,001 160,240 169,782 160,240 173,528
Basic and Diluted Earnings (Loss) per Average Share
of Common Stock Before Extraordinary Item and Cumulative
Effect of Change in Accounting Principle $ 0.03 $ 0.02 $ (0.30) $ (0.01) $ (0.57) $ (0.11)
Extraordinary Item per Average Share of Common Stock - - - - - (0.01)
Cumulative Effect of Change in Accounting Principle - - 0.08 - 0.08 -
Basic and Diluted Earnings (Loss) per Average Share of
Common Stock $ 0.03 $ 0.02 $ (0.22) $ (0.01) $ (0.49) $ (0.12)
---------------------------------------------------------------------------
| 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. |
