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EXHIBIT 99.1
FOR FURTHER INFORMATION: SANDY FRUHMAN MEDIA (713) 207-3123
RANDY BURKHALTER INVESTORS (713) 207-3115
FOR IMMEDIATE RELEASE: JANUARY 26, 2001
RELIANT ENERGY'S WHOLESALE ENERGY BUSINESSES AND ELECTRIC OPERATIONS
DROVE EARNINGS UP 65 PERCENT FOR THE YEAR 2000
HOUSTON, TX - Reliant Energy today reported adjusted earnings for 2000
of $838 million, or $2.94 per basic share, compared to $508 million, or $1.78
per basic share, for 1999. Strong performance from the company's unregulated
wholesale energy businesses and increased customer demand in its regulated
electric service territory resulted in a substantial rise in earnings. Adjusted
earnings for both years exclude the results of the company's investments in
Latin America, which are classified as discontinued operations.
Adjusted earnings for the fourth quarter of 2000 were $73 million, or
$0.25 per basic share, compared to $73 million, or $0.26 per basic share, for
the same period of 1999.
"We are proud of what we have achieved over the past year," said Steve
Letbetter, chairman, president and chief executive officer. "Reliant Energy has
made substantial strides in executing its growth strategies in recent years. Our
substantial earnings growth demonstrates our financial strength, market
intelligence and disciplined approach to commercial asset management.
"The company performed well across all of its business segments during
the past year, with the competitive wholesale energy business showing
significant growth. Our track record of
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strong performance reflects our commitment to continually increase shareholder
value," said Letbetter.
SELECTED OPERATING INCOME DETAILED
ELECTRIC OPERATIONS
For the year 2000, Reliant Energy HL&P generated operating income of
$1.23 billion, up from $981 million for 1999. Increased customer demand,
favorable weather comparisons and lower depreciation and amortization expense
were the primary reasons for the 25 percent rise in operating income. Reliant
Energy HL&P's operating income for the fourth quarter of 2000 rose 41 percent to
$203 million, compared to $144 million, for the same period last year. The
increase was largely due to the same reasons described above.
Kilowatt-hour sales for the fourth quarter increased approximately 5
percent over the same quarter of 1999, and 4 percent for the year 2000. In
addition, Reliant Energy HL&P added over 44,000 customers in its service
territory during 2000.
WHOLESALE ENERGY
Reliant Energy's wholesale energy group, which includes unregulated
power generation and energy trading and marketing activities in North America,
produced operating income of $482 million in 2000, compared to $27 million in
1999. The group also reported equity income, which is included in other income,
of $43 million for 2000, compared to an equity loss of $1 million in 1999.
Additional operations in the Mid-Atlantic, Mid-Continent and Southwest regions,
as well as higher energy sales and prices contributed to the substantial
increase over
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1999. These were partially offset by higher general and administrative expenses
to support generation and commercial activities, increased generation
development costs, and reserves which include a $39 million provision taken
against receivable balances related to energy sales in California. The company's
wholesale energy group reported an increase of $30 million in fourth-quarter
operating income and $10 million in fourth-quarter equity income from the same
period in 1999, primarily due to the same factors described above.
NATURAL GAS DISTRIBUTION
Reliant Energy's natural gas distribution companies reported operating
income of $113 million for 2000, compared to $158 million for 1999. Higher
operating expenses during 2000, mainly related to costs associated with exiting
certain retail gas markets, provisions against receivable balances and benefit
expenses, contributed to the decline.
For the fourth quarter of 2000, the gas distribution companies
generated operating income of $64 million, up from $57 million for the same
period of 1999. Improved gas margins, largely due to colder weather, contributed
to the increase in the fourth quarter.
PIPELINES AND GATHERING
The company's pipelines and gathering segment contributed operating
income of $137 million in 2000, up from $131 million the prior year, and $38
million for the fourth quarter of 2000, compared to $35 million for the same
period of 1999. The increase for both reporting periods was primarily due to
increased gas gathering and processing revenues.
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EUROPEAN ENERGY
The European energy segment contributed operating income of $89 million
for the year. The company established its European presence in the fourth
quarter of 1999, with the acquisition of UNA N.V., a Dutch power generation
company.
The European energy segment produced $17 million of operating income
for the fourth quarter of 2000, compared to $32 million in the same period last
year. The decline was largely due to foreign exchange rate differences and
trading and marketing start-up costs.
OTHER OPERATIONS
Reliant Energy's other operations segment, which includes its
unregulated retail electric operations, its communications business, its
eBusiness group and corporate costs, reported an operating loss of $172 million
for 2000, compared to a loss of $71 million for 1999. The decline resulted
primarily from increased expenses incurred in preparing to enter the deregulated
Texas electric retail market, increased communications start-up costs and
information technology costs.
For the fourth quarter of 2000, the company's other operations segment
had an operating loss of $90 million. This compares to an operating loss of $16
million for the same period of 1999. The factors affecting the decline are the
same as those mentioned above for the year.
DISCONTINUED OPERATIONS
By the end of 2000, the company's Latin American segment had sold its
investments in El Salvador, Brazil and Colombia for approximately $790 million
in after-tax proceeds. Its remaining investments include a wholly owned
cogeneration facility and an electric distribution company in Argentina, as well
as a coke calcining plant in India. Reliant Energy is engaged in
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negotiations for the sale of these investments and anticipates the transactions
to be concluded in 2001. As of December 1, 2000, Reliant Energy began reporting
the results from its Latin American segment as discontinued operations.
REPORTED EARNINGS
Reliant Energy's earnings for the year and fourth quarter have been
adjusted to eliminate the effects of certain items that are unusual or
non-operational in nature. The adjustments, which are shown in the table below,
include: losses from and the disposal of discontinued operations in Latin
America; extraordinary items; and non-cash, net unrealized accounting gains and
losses on indexed debt securities and Reliant Energy's investment in Time Warner
common stock.
2000 RESULTS
(MILLIONS OF DOLLARS, EXCEPT PER SHARE AMOUNTS)
Quarter Ended Year Ended
December 31, December 31,
----------------------- -----------------------
EARNINGS 2000 1999 2000 1999
---------- ---------- ---------- ----------
Net (loss) income, as reported $ (299) $ (73) $ 447 $ 1,482
--------- --------- --------- ---------
Loss (income) from discontinued operations 146 (37) 172 9
--------- --------- --------- ---------
Loss on disposal of discontinued operations 159 -- 159 --
--------- --------- --------- ---------
Net unrealized loss (gain) on indexed debt
securities & Time Warner investment 67 -- 67 (1,166)
--------- --------- --------- ---------
Extraordinary loss (gain) -- 183 (7) 183
--------- --------- --------- ---------
Adjusted Earnings 73 73 838 508
--------- --------- --------- ---------
EARNINGS PER BASIC SHARE
--------- --------- --------- ---------
(Loss) income per basic share, as reported (1.04) (.26) 1.57 5.20
--------- --------- --------- ---------
Loss (income) from discontinued operations .51 (.13) .61 .03
--------- --------- --------- ---------
Loss on disposal of discontinued operations .55 -- .56 --
--------- --------- --------- ---------
Net unrealized loss (gain) on indexed debt
securities & Time Warner investment .23 -- .23 (4.09)
--------- --------- --------- ---------
Extraordinary loss (gain) -- .65 (.03) .64
--------- --------- --------- ---------
Basic EPS, adjusted .25 .26 2.94 1.78
--------- --------- --------- ---------
Weighted average basic shares (000) 286,088 284,427 284,652 285,040
--------- --------- --------- ---------
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WEBCAST OF EARNINGS CONFERENCE CALL
Reliant Energy has scheduled its fourth-quarter 2000 earnings
conference call for Friday, January 26, 2001, at 10 a.m. CST. Interested parties
may listen to a live audio broadcast of the conference call at
www.reliantenergy.com/investors. Parties may also listen to an online replay
that will follow within two hours after completion of the call.
The webcast requires listeners to have a multimedia computer with
speakers and RealPlayer installed. Please visit the website at least 15 minutes
before the scheduled broadcast to register for the event and download and
install any necessary audio software.
FORM 8-K
For further details related to the fourth-quarter 2000 earnings
release, refer to the company's current report on form 8-K, which was filed
today with the Securities and Exchange Commission.
Reliant Energy (NYSE: REI) based in Houston, Texas, is an international
energy services and energy delivery company with approximately $29 billion in
annual revenue and assets totaling approximately $32 billion. The company has a
wholesale energy trading and marketing business that is one of only six
companies to rank among both the ten largest power marketers and the ten largest
natural gas marketers in the U.S. It also has power generation and wholesale
trading and marketing operations in Western Europe. The company has nearly
27,000 megawatts of power generation in operation in the U.S. and Western Europe
and has announced
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acquisitions and development projects that will add nearly 4,000 megawatts.
Reliant Energy also has marketing and distribution operations serving nearly
four million electricity and natural gas customers in the U.S. and a
communications business serving the Houston area.
* * * *
This news release includes forward-looking statements. Actual events
and results may differ materially from those projected. Factors that could
affect actual results include the timing and impact of future regulatory and
legislative decisions, changes in Reliant Energy's business plans, financial
market conditions and other factors discussed in Reliant Energy's filings with
the Securities and Exchange Commission.
- # # # -
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Reliant Energy, Incorporated and Subsidiaries
Statements of Consolidated Operations
(Thousands of Dollars)
(Unaudited)
Quarter Ended December 31, Year Ended December 31,
---------------------------- ----------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
Revenues:
Electric Operations $ 1,298,943 $ 969,983 $ 5,494,191 $ 4,483,127
Wholesale Energy 6,833,177 2,084,689 19,233,721 7,911,567
Natural Gas Distribution 1,757,422 851,871 4,412,219 2,788,288
Pipelines and Gathering 109,690 86,657 384,132 330,995
European Energy 164,424 152,865 579,730 152,865
Other Operations 3,306 10,332 55,255 34,810
Eliminations (297,540) (154,954) (819,864) (478,558)
------------ ------------ ------------ ------------
Total Revenues 9,869,422 4,001,443 29,339,384 15,223,094
------------ ------------ ------------ ------------
Expenses:
Fuel and cost of gas sold 5,949,260 2,018,740 15,071,801 6,699,792
Purchased power 2,602,483 907,591 8,627,853 4,137,414
Operation and maintenance 741,521 531,756 2,356,207 1,781,030
Taxes other than income taxes 128,129 102,540 498,061 441,242
Depreciation and amortization 200,170 203,286 906,328 905,305
------------ ------------ ------------ ------------
Total 9,621,563 3,763,913 27,460,250 13,964,783
------------ ------------ ------------ ------------
Operating Income 247,859 237,530 1,879,134 1,258,311
------------ ------------ ------------ ------------
Other Income (Expense):
Unrealized (loss) gain on Time Warner investment (447,897) 636,301 (204,969) 2,452,406
Unrealized gain (loss) on indexed debt securities 344,721 (636,301) 101,851 (629,523)
Income (loss) of equity investment of unconsolidated subsidiaries 9,752 (224) 42,860 (793)
Other - net 29,331 23,682 83,765 59,766
------------ ------------ ------------ ------------
Total (64,093) 23,458 23,507 1,881,856
------------ ------------ ------------ ------------
Interest and Other Charges:
Interest 174,145 139,941 700,083 498,451
Distribution on trust preferred securities 13,900 12,787 54,358 51,220
------------ ------------ ------------ ------------
Total 188,045 152,728 754,441 549,671
------------ ------------ ------------ ------------
(Loss) Income from Continuing Operations Before Income Taxes,
Extraordinary Items and Preferred Dividends (4,279) 108,260 1,148,200 2,590,496
Income Tax (Benefit) Expense (9,899) 34,819 377,064 915,973
------------ ------------ ------------ ------------
Income from Continuing Operations Before Extraordinary Items and 5,620 73,441 771,136 1,674,523
Preferred Dividends
Income (loss) from Discontinued Operations (net of income
taxes of $47,736, $8,006, $45,721 and $16,856) (145,561) 37,133 (172,375) (8,792)
Loss on Disposal of Discontinued Operations, including
provision of $5,741 for operating loss during phase-out period (158,706) -- (158,706) --
(less applicable income taxes of $12,846)
Extraordinary (Loss) Gain, net of tax of $98,679 and $0 -- (183,261) 7,445 (183,261)
------------ ------------ ------------ ------------
Income (Loss) Before Preferred Dividends (298,647) (72,687) 447,500 1,482,470
Preferred Dividends 97 97 389 389
------------ ------------ ------------ ------------
Net (Loss) Income Attributable to Common Stockholders $ (298,744) $ (72,784) $ 447,111 $ 1,482,081
============ ============ ============ ============
Reference is made to the Notes to the Consolidated Financial Statements
contained in the Annual Report of Reliant Energy, Incorporated. The information
furnished is given in response to your request for information concerning
Reliant Energy, Incorporated and not in connection with any sale or offer for
sale of, or solicitation of an offer to buy, any securities.
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Reliant Energy, Incorporated
Selected Data From Statements of Consolidated Income
(Thousands of Dollars, Except Per Share Amounts)
(Unaudited)
Quarter Ended Year Ended
December 31, December 31,
--------------------------- ---------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
AS REPORTED:
Basic Earnings Per Common Share
Income from continuing operations before extraordinary items $ 0.02 $ 0.26 $ 2.71 $ 5.87
(Loss) income from discontinued operations, net of tax $ (0.51) $ 0.13 $ (0.61) $ (0.03)
Loss on disposal of discontinued operations, net of tax $ (0.55) $ -- $ (0.56) $ --
Extraordinary (loss) gain, net of tax $ -- $ (0.65) $ 0.03 $ (0.64)
Net (loss) income attributable to common stockholders $ (1.04) $ (0.26) $ 1.57 $ 5.20
Diluted Earnings Per Common Share
Income from continuing operations before extraordinary items $ 0.02 $ 0.26 $ 2.68 $ 5.85
(Loss) income from discontinued operations, net of tax $ (0.51) $ 0.13 $ (0.60) $ (0.03)
Loss on disposal of discontinued operations, net of tax $ (0.55) $ -- $ (0.55) $ --
Extraordinary (loss) gain, net of tax $ -- $ (0.65) $ 0.03 $ (0.64)
Net (loss) income attributable to common stockholders $ (1.04) $ (0.26) $ 1.56 $ 5.18
Dividends per Common Share $ 0.375 $ 0.375 $ 1.500 $ 1.500
Weighted Average Common Shares Outstanding (000):
- Basic 286,088 284,427 284,652 285,040
- Diluted 286,088 284,427 287,287 286,021
AS ADJUSTED FOR UNUSUAL AND OTHER CHARGES:
Net (Loss) Income Attributable to Common Stockholders $ (298,744) $ (72,784) $ 447,111 $ 1,482,081
Unusual and other charges, after tax :
(Income) loss from discontinued operations 145,561 (37,133) 172,375 8,792
Loss on disposal of discontinued operations 158,706 -- 158,706 --
Extraordinary loss (gain) -- 183,261 (7,445) 183,261
Net unrealized loss (gain) on indexed debt securities and
Time Warner investment 67,064 -- 67,027 (1,165,740)
----------- ----------- ----------- -----------
Adjusted Earnings $ 72,587 $ 73,344 $ 837,774 $ 508,394
=========== =========== =========== ===========
Adjusted Basic Earnings Per Common Share $ 0.25 $ 0.26 $ 2.94 $ 1.78
Adjusted Diluted Earnings Per Common Share $ 0.25 $ 0.26 $ 2.92 $ 1.78
OPERATING INCOME (LOSS) BY SEGMENT (IN MILLIONS)
Electric Operations $ 203 $ 144 $ 1,230 $ 981
Wholesale Energy 16 (14) 482 27
Natural Gas Distribution 64 57 113 158
Pipelines and Gathering 38 35 137 131
European Energy 17 32 89 32
Other Operations (90) (16) (172) (71)
----------- ----------- ----------- -----------
Total $ 248 $ 238 $ 1,879 $ 1,258
=========== =========== =========== ===========
FOR ADDITIONAL INFORMATION PLEASE CONTACT:
Randy Burkhalter
(713) 207-3115
Dennis Barber
(713) 207-3042