EXHIBIT 99
NIAGARA MOHAWK HOLDINGS REPORTS FIRST-QUARTER RESULTS
CASH FLOW CONTINUES TO IMPROVE
SYRACUSE, May 17 -- Niagara Mohawk Holdings, Inc. (NYSE: NMK) today
reported results for its first quarter ended March 31, 1999. Niagara Mohawk
Holdings, Inc. is the parent company of Niagara Mohawk Power Corporation
(Niagara Mohawk), a regulated energy delivery company with the largest service
territory in New York State.
As anticipated, cash flow during the first quarter of 1999 continued to improve
as a result of Niagara Mohawk's Master Restructuring Agreement (MRA) entered
into in 1998 with a group of Independent Power Producers (IPPs), and the
POWERCHOICE agreement. Earnings before interest, taxes, depreciation and
amortization (EBITDA) for the 12 months ended March 31, 1999, were $1,245
million, an increase of approximately $400 million compared to the 12 months
ended March 31, 1998. The significant improvement in EBITDA is due primarily to
a reduction in payments to the IPPs.
The company reported earnings in the first quarter of 1999 of $50.8 million, or
27 cents per share, as compared to $11.1 million, or 8 cents per share, for the
first quarter in 1998. Earnings in the first quarter of 1999 reflect the
impacts of the MRA and POWERCHOICE. Niagara Mohawk's lower aggregate fuel and
purchased power costs, partly offset by increased interest charges, improved
earnings by $57.7 million, or 31 cents per share, during the first quarter.
However, the non-cash amortization of the MRA regulatory asset reduced earnings
in the first quarter by $62.8 million, or 34 cents per share. Earnings in the
first quarter of 1998 reflected the incremental costs of a major ice storm,
which reduced earnings in the first quarter of 1998 by $40.9 million, or 28
cents per share.
The company reported a loss of $117.7 million, or a loss of 67 cents per
share, for the 12 months ended March 31, 1999, as compared to earnings of $63.5
million, or 44 cents per share, for the same period in 1998. The loss for the
12-month period ended March 31, 1999, reflects the impacts of the MRA and
POWERCHOICE which includes the impact of the one-time, non-cash POWERCHOICE
charge taken in June 1998, of $171.1 million after-tax, or 97 cents per share.
The increased cash flow from operations, together with the expected
proceeds from the sale of its generating assets and a $135 million cash refund
from the Internal Revenue Service received earlier this year, will allow Niagara
Mohawk to retire more than $1 billion in debt this year. "We are committed to
follow through on our strategy to retire capital and rebuild shareholder value,"
said William E. Davis, chairman and chief executive officer of Niagara Mohawk
Holdings.
Electric revenues in the first quarter of 1999 were $849.7 million, down
1.6 percent from the first quarter of 1998, primarily due to POWERCHOICE rate
reductions and lower wholesale sales. For the 12 months ended March 31, 1999,
electric revenues were $3,247.7 million, down 1.4 percent compared to the same
period in 1998.
Natural gas revenues for the first quarter of 1999 were $246.3 million, up
4.7 percent from the first quarter of 1998, primarily as a result of increased
sales due to colder weather during the first quarter of 1999. For the 12 months
ended March 31, 1999, natural gas revenues were $576.3 million, down 4.9 percent
compared to the same period in 1998.
Non-utility revenues for the 3 months and 12 months ended March 31, 1999,
were down compared to revenues for same periods in 1998, largely as a result of
reduced trading activities at Niagara Mohawk Energy, an unregulated subsidiary.
The Consolidated Statements of Income will be filed today with the
Securities and Exchange Commission as an exhibit in Form 10-Q.
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.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
NIAGARA MOHAWK HOLDINGS, INC.
In thousands of dollars
Three Months Ended Twelve Months Ended
March 31, March 31,
1999 1998* 1999* 1998*
-------------- ------------ ----------- -----------
OPERATING REVENUES:
Electric. . . . . . . . . . . . . . . . . . . . . . . . $ 849,746 $ 863,169 $3,247,721 $3,295,241
Gas . . . . . . . . . . . . . . . . . . . . . . . . . . 246,275 235,235 576,269 605,735
Non-utility . . . . . . . . . . . . . . . . . . . . . . 23,113 65,493 123,697 174,237
- ------------------------------------------------------- -------------- ------------ ----------- -----------
1,119,134 1,163,897 3,947,687 4,075,213
-------------- ------------ ----------- -----------
OPERATING EXPENSES:
Fuel for electric generation. . . . . . . . . . . . . . 57,094 47,198 249,878 189,188
Electricity purchased . . . . . . . . . . . . . . . . . 175,292 374,919 926,558 1,367,766
Gas purchased . . . . . . . . . . . . . . . . . . . . . 115,258 130,673 292,426 351,061
Other operation and maintenance expenses. . . . . . . . 206,343 264,319 890,938 900,955
POWERCHOICE charge. . . . . . . . . . . . . . . . . . . - - 263,227 -
Amortization of MRA regulatory asset. . . . . . . . . . 96,625 - 225,458 -
Depreciation and amortization . . . . . . . . . . . . . 94,816 88,059 362,676 343,968
Other taxes . . . . . . . . . . . . . . . . . . . . . . 121,858 127,160 455,210 472,520
- ------------------------------------------------------- -------------- ------------ ----------- -----------
867,286 1,032,328 3,666,371 3,625,458
-------------- ------------ ----------- ----------
OPERATING INCOME. . . . . . . . . . . . . . . . . . . . 251,848 131,569 281,316 449,755
Other income (deductions) . . . . . . . . . . . . . . . (1,403) 6,953 40,232 33,566
- ------------------------------------------------------- -------------- ------------ ----------- ----------
INCOME BEFORE INTEREST CHARGES. . . . . . . . . . . . . 250,445 138,522 321,548 483,321
Interest charges. . . . . . . . . . . . . . . . . . . . 130,275 65,590 461,863 271,958
Preferred dividend requirement of subsidiary. . . . . . 9,024 9,223 36,356 37,221
- ------------------------------------------------------- -------------- ------------ ----------- ----------
INCOME (LOSS) BEFORE FEDERAL & FOREIGN INCOME TAXES . . 111,146 63,709 (176,671) 174,142
Federal & foreign income taxes. . . . . . . . . . . . . 60,314 52,569 (58,983) 110,687
- ------------------------------------------------------- -------------- ------------ ----------- ----------
NET INCOME (LOSS) . . . . . . . . . . . . . . . . . . . $ 50,832 $ 11,140 $ (117,688) $ 63,455
- ------------------------------------------------------- -------------- ------------ ----------- ----------
AVERAGE NUMBER OF SHARES OF COMMON
STOCK OUTSTANDING (IN THOUSANDS). . . . . . . . . 187,365 144,419 176,776 144,412
BASIC AND DILUTED EARNINGS PER AVERAGE
SHARE OF COMMON STOCK . . . . . . . . . . . . . . $ 0.27 $ 0.08 $ (0.67) $ 0.44
- ------------------------------------------------------- -------------- ------------ ----------- ----------
Other Operating Data:
Earnings before interest charges, interest income,
income taxes, depreciation and amortization, and other
regulatory adjustments (EBITDA) . . . . . . . . . . . . $ 488,597 - $ 1,245,498 -
Net cash interest . . . . . . . . . . . . . . . . . . . $ 109,650 - $ 390,423 -
Ratio of EBITDA to net cash interest. . . . . . . . . . 4.5 - 3.2 -
NOTES:
* Prior period consolidated financial statements have been prepared from
Niagara Mohawk's prior period consolidated financial statements, except
that accounts have been reclassified to reflect the Niagara Mohawk
Holdings structure.
- - 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 TWELVE MONTHS ENDED
MARCH 31, MARCH 31,
1999 1998* 1999* 1998*
-------------- ---------------- ----------- ----------
Operating Revenues . . . . . . . . . . $ 1,119,134 $ 1,163,897 $3,947,687 $4,075,213
Operating Income . . . . . . . . . . . $ 251,848 $ 131,569 $ 281,316 $ 449,755
Net Income (Loss). . . . . . . . . . . $ 50,832 $ 11,140 $ (117,688) $ 63,455
Average number of shares of common
stock outstanding (in thousands) . . 187,365 144,419 176,776 144,412
Basic and diluted earnings (loss) per
average share of common stock. . . . $ 0.27 $ 0.08 $ (0.67) $ 0.44
EBITDA . . . . . . . . . . . . . . . . $ 488,597 -- $1,245,498 --
Net Cash Interest. . . . . . . . . . . $ 109,650 -- $ 390,423 --
Ratio of EBITDA to Net Cash Interest . 4.5 3.2
* Prior period consolidated financial statements have been prepared from
Niagara Mohawk's prior period consolidated financial statements, except
that accounts have been reclassified to reflect the Niagara Mohawk Holdings
structure.
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.