Exhibit No. 99
News Release
NIAGARA MOHAWK HOLDINGS REPORTS FIRST QUARTER RESULTS
SYRACUSE, May 1 - Niagara Mohawk Holdings, Inc. (NYSE: NMK) today reported
financial results for the first quarter 2000. Niagara Mohawk Holdings, Inc.
(the company) is the parent company of Niagara Mohawk Power Corp. (Niagara
Mohawk), a regulated energy delivery company.
Earnings before interest, taxes, depreciation and amortization (EBITDA) for
the twelve months ended March 31, 2000 were approximately $1.16 billion,
compared to approximately $1.17 billion in the same period ended in 1999.
The company reported earnings for the first quarter of 2000 of $14.5
million, or 8 cents per share, as compared to $50.8 million, or 27 cents per
share, for the first quarter in 1999. Earnings in the first quarter 2000 were
down primarily as a result of lower gas gross margin, which reduced earnings for
the quarter by approximately $22.5 million, or 13 cents per share. Gas gross
margins were lower in part because of a change in the regulatory adjustment
mechanism used to record gas costs, the effect of which should reverse over the
remainder of the year.
First quarter 2000 earnings were also impacted by increased costs associated
with the operation of the newly formed New York Independent System Operator
(NYISO), which reduced earnings by approximately $14.3 million, or 8 cents per
share. The NYISO, which began formal operations on December 1, 1999,
replaced the New York Power Pool and now manages the bulk transmission system in
New York State. The company experienced higher NYISO costs related to ancillary
service charges and energy purchases. The NYISO and Niagara Mohawk have
petitioned the FERC regarding the magnitude of NYISO charges for ancillary
services and have asked the FERC to order a refund of some of these charges.
Niagara Mohawk is unable to predict the FERC's response. In addition, the
company believes that some portion of the NYISO charges will be reversed as the
NYISO performs load reconciliations for the first quarter. The higher NYISO
costs experienced by Niagara Mohawk are primarily related to start-up issues at
the NYISO. The company expects that as the bulk power market matures these
issues will be resolved.
Additionally, earnings in the first quarter of 2000 were reduced by
approximately $5 million, or 3 cents per share, by costs related to the Nine
Mile Two refueling outage and by approximately $5 million, or 3 cents per share,
as a result of the second phase of electric price reductions implemented as part
of the company's current electric regulatory agreement.
First quarter earnings reductions were partially offset by $12.3 million,
or 7 cents per share, in decreased interest expense due to the retirement of
over $1 billion in debt in 1999.
"While earnings will continue to be depressed during the period in which we
amortize the costs of the Master Restructuring Agreement, the company's strong
cash flow allows us to continue with our aggressive debt retirement and share
repurchase programs," said William E. Davis, chairman and chief executive
officer of Niagara Mohawk Holdings.
The company reported a loss of $71.4 million or a loss of 39 cents per
share for the 12 months ended March 31, 2000, as compared to a loss of $117.7
million, or a loss of 67 cents per share, for the 12-month period a year ago.
The loss for the 12-month period ended March 31, 1999 reflects the impact of the
one-time, non-cash charge to earnings in 1998 of $171.1 million, or 97 cents per
share, related to the MRA. Earnings for the 12-month periods ended March 31,
2000 and March 31, 1999 include charges of $251.2 million, or $1.36 per share,
and $146.5 million, or $0.83 per share, respectively, for the non-cash
amortization of the MRA regulatory asset. In addition, earnings for the 12
months ended March 31, 2000 include an extraordinary charge of $23.8 million,
or 13 cents per share, related to the early retirement of debt.
Niagara Mohawk's electric revenues in the first quarter of 2000 were $823.7
million, down 3.1 percent from the first quarter of 1999. Electric revenues
for the 12 months ended March 31, 2000 were $3,221.7 million, down 0.8 percent
compared to the same period in 1999. Retail sales of electricity decreased 8.0
percent and increased 0.6 percent for the 3-month and 12- month periods ended
March 31, 2000, respectively, as compared to the same periods in 1999. Retail
sales in the first quarter of 1999 include the one-time impact of billing
customers on a monthly basis rather than bi-monthly. Retail revenues declined
in part as more customers chose to buy energy from other companies under retail
choice, as well as due to warmer weather and lower prices.
Niagara Mohawk's natural gas revenues for 1999 were $245.1 million, down
0.5 percent from the first quarter of 1999. For the 12 months ended March 31,
2000, natural gas revenues were $578.4 million, up 0.4 percent, compared to the
same period in 1999. Retail sales of natural gas for the 3 months and the 12
months ended March 31, 2000 decreased 6.6 percent and 4.9 percent, respectively,
compared to the same periods in 1999. Total gas deliveries, which includes the
transportation of customer-owned gas, were down 6.2 percent for the three months
ended 2000, and up 2.9 percent for the twelve months ended March 31, 2000,
respectively, as compared to the same periods in 1999.
Consolidated Statements of Income will be filed today with the Securities
and Exchange Commission on Form 8-K.
The company will host a conference call at 10:00 a.m. EDT to discuss
first-quarter results. In order to join the conference call, please dial
888-868-9078 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 888-463-5487.
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.