Allegheny Energy, Inc. Reports First Quarter 2002 Earnings of $.81 Per Share.Business Editors HAGERSTOWN Hagerstown (hā`gərztoun'), city (1990 pop. 35,445), seat of Washington co., NW Md., on Antietam Creek near its junction with the Potomac River, in the fertile Cumberland Valley; inc. 1791. , Md.--(BUSINESS WIRE)--May 2, 2002 Allegheny Energy Allegheny Energy (NYSE: AYE) is a traditional public utility based in the Pittsburgh suburb of Greensburg. It services communities in Western Pennsylvania, Western Maryland, Northern West Virginia, Northwest Virginia. , Inc. (NYSE NYSE See: New York Stock Exchange : AYE AYE Allegheny Energy, Inc. (stock symbol) AYE Ayer Rajah Expressway AYE Amplifying Your Effectiveness (conference) ) today reported first quarter 2002 earnings per share of $.81 ($101.6 million), a 12.9 percent decrease from 2001 earnings per share of $.93 ($102.8 million). The decrease in earnings per share reflects an increased number of shares outstanding, lower energy commodity prices, and warmer-than-normal weather during the first quarter. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Alan A`lan´ n. 1. A wolfhound. J. Noia, Allegheny Energy Chairman, President, and Chief Executive Officer, "The first several months of 2002 were challenging for those of us in the energy industry, with much milder-than-average weather and lower energy sales, a relatively weak wholesale market, and a lackluster lack·lus·ter adj. Lacking brightness, luster, or vitality; dull. See Synonyms at dull. Adj. 1. lackluster - lacking brilliance or vitality; "a dull lackluster life"; "a lusterless performance" economy. Our sale of land holdings in the Canaan Canaan (kā`nən). 1 According to biblical ethnography, Canaan was the son of Ham and the ancestor for whom the Canaanites were named. Valley of West Virginia West Virginia, E central state of the United States. It is bordered by Pennsylvania and Maryland (N), Virginia (E and S), and Kentucky and, across the Ohio R., Ohio (W). Facts and Figures Area, 24,181 sq mi (62,629 sq km). Pop. , as part of our continuing efforts to opportunistically monetize Monetize 1. To convert into money. 2. To convert from securities into currency that can be used to purchase goods and services. Notes: For example, you'll often hear Internet marketers talk about "monetizing website visitors. our assets, helped to offset the effect of some of these adverse conditions. "Allegheny Energy remains optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op that our integrated strategy will continue to produce positive results for shareholders," added Noia. "Our energy delivery business, with its stable earnings and cash flow, combined with our risk management, trading, and marketing business, which is backed by a national network of generating assets, remains the right combination for continued growth in the future. We believe that this integrated, proven strategy is the right one for Allegheny Energy and its shareholders." Earnings for the twelve months ended March 31, 2002, were $3.62 per share ($447.7 million), compared to $2.99 per share ($330.1 million) for the twelve months ended March 31, 2001, excluding the 2001 cumulative effect of an accounting change and an extraordinary charge for utility restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). . This 21 percent increase in the twelve months ended comparative earnings per share is mainly due to growth in the Company's unregulated Adj. 1. unregulated - not regulated; not subject to rule or discipline; "unregulated off-shore fishing" regulated - controlled or governed according to rule or principle or law; "well regulated industries"; "houses with regulated temperature" 2. energy marketing, trading, and generation business, including acquisitions of generating assets and an energy trading business over the past 24 months. Net income for the twelve months ended March 31, 2001, was $2.65 per share ($292.4 million).
Per share earnings for comparable 2002 and 2001 periods were:
12 Months
First Quarter Ended March
2002 2001 2002 2001
Income before cumulative effect of
accounting change, extraordinary
charge, and other transaction $.71 $.93 $3.52 $2.99
Canaan Valley land sale .10 .10
Cumulative effect of accounting
change: adoption of SFAS 133 (.28) (.28)
Extraordinary charges for electric
utility restructuring orders (.06)
Basic consolidated
earnings per share $.81 $.65 $3.62 $2.65
Allegheny Energy continues to pursue a number of opportunities aimed at providing increased shareholder value. The following are some of the year's highlights to date: -- Allegheny Power, the Company's energy delivery business, and PJM, the electric grid operator for the mid-Atlantic region, joined forces to create a new Regional Transmission Organization called PJM West that began operations on April 1. PJM West, which is independent from market participants, will have operational authority for all transmission assets within the region. The organization will be responsible for assuring the short-term reliability of the region's transmission system, administering and designing tariffs, managing congestion, coordinating interregional transactions, and planning for expansion. -- Allegheny Energy Supply, Allegheny Energy's generating and trading subsidiary, received the necessary approvals to begin construction of a 630-megawatt (MW) natural gas-fired, combined-cycle generating facility in St. Joseph County, Ind. Construction began this spring. The output from the electric generating facility will support Allegheny Energy Supply's growth strategy of owning or controlling more than 14,500 MW of generating capacity by 2005. -- Allegheny Energy Supply Company also received approval from the Arizona Public Service Commission for construction of the Company's first power plant in the western United States. The $540-million, 1,080-MW merchant facility will be located in La Paz County and is scheduled for completion by 2005. -- Allegheny Energy Supply completed the sale of $650 million of 8.25 percent senior unsecured Notes due 2012. Proceeds of the Notes were used to pay down existing short-term debt and for general corporate purposes. -- Allegheny Energy's subsidiary, West Penn Power Company, recently completed an $80 million 10-year debt offering at a coupon of 6.625 percent. The proceeds from this offering will be used to fund the redemption of all outstanding shares of its 8 percent Quarterly Income Debt Securities (QUIDS(sm)) Junior Subordinated Deferrable Interest Debentures, Series A (NYSE: WQP), due June 30, 2025, with a value of $70 million. -- Furthering its position among the nation's elite companies, Allegheny Energy has again been named to the Fortune 500, the Forbes "Super 500," and the Forbes "Platinum 400" lists of America's largest corporations. In addition, the Company has been ranked among the leading companies in the nation, according to BusinessWeek, and is a member of the Barron's 500 and the Standard & Poor's 500 Index. With headquarters in Hagerstown, Md., Allegheny Energy is an integrated Fortune 500 energy company with a balanced portfolio of businesses, including Allegheny Energy Supply, a national energy merchant which owns and operates electric generating facilities and supplies energy and energy-related commodities in selected domestic retail and wholesale markets; Allegheny Allegheny (ăl`əgā'nē, ăl`əgä'nē), river, 325 mi (523 km) long, rising in N central Pa., and flowing NW into N.Y., then SW through Pa. Power, which delivers low-cost, reliable electric and natural gas service to about three million people in Maryland Maryland (mâr`ələnd), one of the Middle Atlantic states of the United States. It is bounded by Delaware and the Atlantic Ocean (E), the District of Columbia (S), Virginia and West Virginia (S, W), and Pennsylvania (N). , Ohio, Pennsylvania Pennsylvania (pĕnsəlvā`nyə), one of the Middle Atlantic states of the United States. It is bordered by New Jersey, across the Delaware River (E), Delaware (SE), Maryland (S), West Virginia (SW), Ohio (W), and Lake Erie and New York , Virginia Virginia, state, United States Virginia, state of the south-central United States. It is bordered by the Atlantic Ocean (E), North Carolina and Tennessee (S), Kentucky and West Virginia (W), and Maryland and the District of Columbia (N and NE). , and West Virginia; and a business segment offering fiber-optic See fiber optics. and data services, energy procurement The fancy word for "purchasing." The procurement department within an organization manages all the major purchases. and management, and energy services. More information about the Company is available at www.alleghenyenergy.com. Allegheny plans to hold its analyst conference call to discuss earnings results at 11:00 a.m. (Eastern Standard Time) on May 3, 2002. Investors, the news media, and others may listen to a live internet broadcast of the call at www.alleghenyenergy.com or www.streetevents.com by clicking on an available audio link. The call will also be archived for replay purposes for 10 business days after the live broadcast on both of these web sites. Supporting financial data will also be available on the Company's web site for review. Certain statements contained herein constitute forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. with respect to Allegheny Energy, Inc. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, or achievements of Allegheny Energy to be materially different from any future results, performance, or achievements expressed or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. by such forward-looking statements. Such factors may affect Allegheny Energy's operations, markets, products, services, prices, capital expenditures, development activities, and future plans. Such factors include, among others, the following: changes in general, economic, and business conditions; changes in the price of electricity and natural gas; changes in industry capacity; changes in technology; changes in financial and capital market conditions; changes in political and social conditions, deregulation Deregulation The reduction or elimination of government power in a particular industry, usually enacted to create more competition within the industry. Notes: Traditional areas that have been deregulated are the telephone and airline industries. activities and the movement toward competition in the states served by our operations; the effect of regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. and legislative decisions; regulatory approvals and conditions; the loss of any significant customers; litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. ; and changes in business strategy or business plans.
ALLEGHENY ENERGY EARNINGS
First Quarter 2002
March 31
Three months ended 2002 2001
------------------ ----------- -----------
Sales to regulated electric
customers, gigawatt-hours (Note 1) 11,694 12,006
Revenues ($000) (Note 2)
Regulated Electric $ 627,066 $ 640,270
Regulated Other 20,882 27,724
Regulated Gas 92,426 109,344
Unregulated Generation 1,376,606 908,518
Other Unregulated 151,197 7,520
----------- -----------
Total ($000) $ 2,268,177 $ 1,693,376
=========== ===========
Consolidated income before
cumulative effect of accounting
change and other transaction ($000) $ 89,720 $ 102,824
Cumulative effect of
accounting change (Note 3) - (31,147)
Canaan Valley land sale (Note 5) 11,917 -
----------- -----------
Consolidated net income ($000) $ 101,637 $ 71,677
=========== ===========
Basic earnings per average share
Income before cumulative effect of
accounting change and other transaction $ 0.71 $ 0.93
Cumulative effect of
accounting change (Note 3) - (0.28)
Canaan Valley land sale (Note 5) 0.10 -
----------- -----------
Basic consolidated earnings per share $ 0.81 $ 0.65
=========== ===========
Diluted consolidated earnings per share $ 0.81 $ 0.65
=========== ===========
Average common shares outstanding (000) 125,249 110,436
March 31
Twelve months ended 2002 2001
------------------ ----------- -----------
Sales to regulated electric
customers, gigawatt-hours (Note 1) 45,067 45,480
Revenues ($000) (Note 2)
Regulated Electric $ 2,381,826 $ 2,347,483
Regulated Other 116,676 111,441
Regulated Gas 218,152 203,137
Unregulated Generation 7,954,295 2,149,743
Other Unregulated 282,782 26,634
----------- -----------
Total ($000) $10,953,731 $ 4,838,438
=========== ===========
Income before cumulative effect of
accounting change, extraordinary
charges and other transaction ($000) $ 435,818 $ 330,081
Cumulative effect of
accounting change (Note 3) - (31,147)
Ohio and Virginia extraordinary
charges (Note 4) - (6,518)
Canaan Valley land sale (Note 5) 11,917 -
----------- -----------
Consolidated net income ($000) $ 447,735 $ 292,416
=========== ===========
Basic earnings per average share
Income before cumulative effect of
accounting change, extraordinary
charges and other transaction $ 3.52 $ 2.99
Cumulative effect of
accounting change (Note 3) - (0.28)
Ohio and Virginia
extraordinary charges (Note 4) - (0.06)
Canaan Valley land sale (Note 5) 0.10 -
----------- -----------
Basic consolidated earnings per share $ 3.62 $ 2.65
=========== ===========
Diluted consolidated earnings per share $ 3.60 $ 2.65
=========== ===========
Average common shares outstanding (000) 123,757 110,436
Note 1: Excludes bulk power transaction sales.
Note 2: Excludes intercompany sales between regulated and unregulated.
Note 3: Adoption of SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities."
Note 4: Cost after taxes determined to be unrecoverable as a result of
deregulation proceedings in Ohio and Virginia.
Note 5: Net income related to the sale of land at Canaan Valley to the
U.S. Fish and Wildlife Service.
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