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EXHIBIT 99.1
FOR FURTHER INFORMATION: SANDY FRUHMAN, MEDIA (713) 207-3123
DENNIS BARBER, INVESTORS (713) 207-3042
FOR IMMEDIATE RELEASE: APRIL 16, 2001
RELIANT ENERGY REPORTS STRONG FIRST-QUARTER EARNINGS
Houston, TX - Reliant Energy today reported first-quarter 2001 adjusted
earnings of $274 million, or $.94 per diluted share, compared to $134 million,
or $.47 per share, for the first quarter of 2000. Adjusted earnings per share
doubled compared to a year ago due to the strong performance from the company's
wholesale energy segment and improved results from its natural gas distribution
companies and its pipelines and gathering segment.
"We are pleased to report a quarter of outstanding performance for our
shareholders," said Steve Letbetter, chairman, president and chief executive
officer of Reliant Energy. "We are particularly pleased with the results from
our wholesale energy business, which continues to perform well in a competitive
environment. In a few short years, we've built a substantial wholesale energy
merchant business that has grown rapidly and gained a sizeable presence in five
key regions of the U.S. We are proud of these accomplishments. Our regulated
businesses also performed well in the first quarter, with increased operating
income from our natural gas distribution segment and pipelines and gathering
operations. These businesses continue to produce solid earnings and cash flows."
OPERATING INCOME DETAILED
ELECTRIC OPERATIONS
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Reliant Energy HL&P's operating income for the first quarter of 2001
was $186 million, down from $202 million for the same period of 2000. The
decline was primarily due to increased operating expenses and increased taxes,
partially offset by strong demand from residential and commercial customers and
reduced depreciation and amortization expense.
WHOLESALE ENERGY
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The company's wholesale energy segment produced first-quarter operating
income of $216 million, compared to an operating loss of $22 million for the
first quarter of 2000. Gross margins for the wholesale group rose by $343
million from the same quarter of last year. This increase was primarily due to
increased revenues from energy and ancillary services, the addition of our
Mid-Atlantic assets and strong commercial and operational performance in other
regions.
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These results were partially offset by higher general and
administrative and emissions expenses and a $38 million provision taken against
receivable balances related to energy sales in the West region.
NATURAL GAS DISTRIBUTION
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Operating income for the company's natural gas distribution segment
increased 29 percent to $135 million for the first quarter of 2001, compared to
$105 million for the first quarter of 2000. The substantial rise was largely due
to improved margins from cooler weather, partially offset by increased operating
expenses.
PIPELINES AND GATHERING
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The company's pipelines and gathering segment produced first-quarter
operating income of $39 million, up from $32 million for the same period last
year. Improved margins from both the pipelines and gas gathering businesses
contributed to the rise in operating income.
EUROPEAN ENERGY
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The company's European energy segment reported operating income of $18
million for the first quarter of 2001, compared to $33 million for the same
period of 2000. The decline was largely due to a decrease in gross margins
resulting from competition in the wholesale market, which began January 1, 2001.
Increased margins from ancillary services and district heating partially offset
the decline.
OTHER OPERATIONS
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The company's other operations segment, which includes its unregulated
retail electric operations, its communications business, its eBusiness group and
corporate costs, reported an adjusted operating loss of $33 million for the
first quarter of 2001, compared to an operating loss of $9 million for the same
period last year. The decline resulted primarily from the timing of certain
legal expenses as well as costs related to the company's communications
operations.
In anticipation of the spin-off of its unregulated businesses, the
company incurred a $101 million pre-tax, non-cash charge related to the redesign
of its benefits plans. Including this charge, the reported operating loss for
this segment was $134 million.
REPORTED EARNINGS
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Reliant Energy's reported earnings for the first quarter of 2001 were
$262 million, or $.90 per diluted share, reflecting a $7 million, after-tax loss
on the disposal of discontinued operations in Latin America, a $62 million
after-tax, non-cash gain from the implementation of SFAS No. 133, "Accounting
for Derivative Instruments and Hedging Activities" and a $65 million after-tax,
non-cash charge relating to the redesign of the company's benefits for employees
of the company's unregulated businesses as discussed above. This compares to
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reported earnings of $133 million, or $.47 per share, for the first quarter of
2000, which includes a $1 million loss from discontinued operations in Latin
America.
WEBCAST OF EARNINGS CONFERENCE CALL
Reliant Energy has scheduled its first-quarter 2001 earnings conference
call for Monday, April 16, 2001, at 10 a.m. Central Time. 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 first-quarter 2001 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 $38 billion in
annual revenue and assets totaling more than $30 billion. The company has more
than 23,000 megawatts of power generation in operation in the U.S. and is one of
only three companies to rank among both the five largest power marketers and the
five largest natural gas marketers in the nation. The company also has wholesale
trading and marketing operations and more than 3,400 megawatts of power
generation in Western Europe. Reliant Energy's retail marketing and distribution
operations serve nearly four million electricity and natural gas customers in
the U.S., and its Internet infrastructure and communications company serves
business customers in Texas.
* * * * *
This news release includes forward-looking statements, estimates and
projections. Actual events and results may differ materially from those
projected. Factors that could affect actual results include future regulatory
and legislative decisions, weather, risks associated with international
operations, the success in integrating acquired operations, changes in Reliant
Energy's business plans and other factors discussed in the company's other
filings with the Securities and Exchange Commission.
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Reliant Energy, Incorporated and Subsidiaries
Statements of Consolidated Income
(Thousands of Dollars)
(Unaudited)
Quarter Ended March 31,
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2001 2000
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Revenues:
Electric Operations $ 1,389,766 $ 947,102
Wholesale Energy 9,593,024 2,155,720
Natural Gas Distribution 2,322,694 1,050,931
Pipelines and Gathering 130,427 89,774
European Energy 247,879 150,153
Other Operations 31,648 16,323
Eliminations (431,117) (196,997)
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Total Revenues 13,284,321 4,213,006
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Expenses:
Fuel and cost of gas sold 7,667,139 2,332,589
Purchased power 4,107,623 784,934
Operation and maintenance 715,014 464,948
Taxes other than income taxes 139,688 110,565
Depreciation and amortization 195,054 178,616
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Total 12,824,518 3,871,652
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Operating Income 459,803 341,354
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Other Income (Expense):
Unrealized gain on AOL Time Warner investment 137,082 1,523,683
Unrealized loss on indexed debt securities (135,047) (1,523,625)
Income of equity investment of unconsolidated subsidiaries 12,778 485
Other - net 35,608 20,401
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Total 50,421 20,944
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Interest and Other Charges:
Interest 177,952 160,054
Distribution on trust preferred securities 13,900 13,892
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Total 191,852 173,946
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Income from Continuing Operations Before Income Taxes,
Cumulative Effect of Accounting Change and Preferred Dividends 318,372 188,352
Income Tax Expense 110,150 54,536
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Income from Continuing Operations Before Cumulative Effect of
Accounting Change and Preferred Dividends 208,222 133,816
Loss from Discontinued Operations, net of tax of ($1,400) -- (663)
Loss on Disposal of Discontinued Operations, net of tax of ($1,640) (7,294) --
Cumulative Effect of Accounting Change, net of tax of $33,205 61,666 --
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Income Before Preferred Dividends 262,594 133,153
Preferred Dividends 97 97
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Net Income Attributable to Common Stockholders $ 262,497 $ 133,056
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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
March 31,
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2001 2000
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AS REPORTED:
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Basic Earnings Per Common Share
Income from continuing operations before cumulative effect of accounting change $ 0.72 $ 0.47
Loss on disposal of discontinued operations, net of tax $ (0.03) $ --
Cumulative effect of accounting change, net of tax $ 0.22 $ --
Net income attributable to common stockholders $ 0.91 $ 0.47
Diluted Earnings Per Common Share
Income from continuing operations before cumulative effect of accounting change $ 0.72 $ 0.47
Loss on disposal of discontinued operations, net of tax $ (0.03) $ --
Cumulative effect of accounting change, net of tax $ 0.21 $ --
Net income attributable to common stockholders $ 0.90 $ 0.47
Dividends per Common Share $ 0.375 $ 0.375
Weighted Average Common Shares Outstanding (000):
- - Basic 287,336 283,078
- - Diluted 290,173 284,251
AS ADJUSTED FOR UNUSUAL AND OTHER CHARGES:
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Net Income Attributable to Common Stockholders $ 262,497 $ 133,056
Unusual and other charges, after tax:
Loss from discontinued operations -- 663
Loss on disposal of discontinued operations 7,294 --
Cumulative effect of accounting change (61,666) --
Curtailment and related enhancement of benefit plans 65,396 --
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Adjusted Earnings $ 273,521 $ 133,719
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Adjusted Basic Earnings Per Common Share $ 0.95 $ 0.47
Adjusted Diluted Earnings Per Common Share $ 0.94 $ 0.47
OPERATING INCOME (LOSS) BY SEGMENT (IN MILLIONS)
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Electric Operations $ 186 $ 202
Wholesale Energy 216 (22)
Natural Gas Distribution 135 105
Pipelines and Gathering 39 32
European Energy 18 33
Other Operations (134) (9)
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Total $ 460 $ 341
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FOR ADDITIONAL INFORMATION PLEASE CONTACT:
Dennis Barber
(713) 207-3042