Allegheny Energy, Inc. Reports First Quarter Earnings.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)--April 26, 2000 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 2000 earnings of $86.4 million ($.78 per share), excluding an extraordinary charge of $70.5 million ($.64 per share). First quarter earnings for 1999 were $97.8 million ($.80 per share). The extraordinary charge reflects a write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of costs determined to be unrecoverable as a result 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. legislation requiring 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. of electric generation. As a result of the write-off, net earnings for the first quarter were $15.9 million ($.14 per share). 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. Michael Michael, archangel Michael (mī`kəl) [Heb.,=who is like God?], archangel prominent in Christian, Jewish, and Muslim traditions. In the Bible and early Jewish literature, Michael is one of the angels of God's presence. P. Morrell Morrell is a surname, and may refer to:
"With the deregulation of West Virginia, Allegheny Energy will have 92 percent of its low-cost generation freed from rate regulation. This is very positive news, because the benefits from our increased sales of energy into deregulated markets will flow directly to our shareholders," according to Morrell. "We also have put the uncertainty of deregulation behind us and are positioned as a key competitor in new growth markets." Morrell added, "The quarter also marked notable revenue growth for the Company of 26 percent or $177 million. This growth was primarily a result of greater non-regulated revenues which increased by 150 percent over the first quarter of 1999. Allegheny Energy continues to add to shareholder value through our 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. businesses." First quarter earnings per share, excluding the extraordinary charge, were affected by unplanned generating plant outages, which caused the Company to make purchases of higher-priced power on the open energy market, and substantially warmer than normal weather. The adverse effect on revenues due to weather was partially offset by revenues and earnings from the Company's newly acquired subsidiary, West Virginia Power The West Virginia Power are a minor league baseball team of the South Atlantic League and are the Single-A affiliate of the Milwaukee Brewers. They are located in Charleston, West Virginia and are named for a short lived electric utility in the southeastern part of the state, now , and lower depreciation expense. Excluding the extraordinary charge and other charges as shown on the following chart, earnings for the twelve months ended March 31, 2000, were $295.8 million ($2.61 per share), compared to $306.3 million ($2.50 per share) for the twelve months ended March 31, 1999. The increase in earnings per share was due to the Company's 1999 stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. program and lower depreciation expense.
Per share earnings for the comparable 2000 and 1999 periods are:
First Quarter 12 Months Ended March
------------- ---------------------
2000 1999 2000 1999
---- ---- ---- ----
Earnings before
extraordinary
and other charges $ .78 $ .80 $ 2.61 $ 2.50
Extraordinary charges for
West Virginia, Maryland,
and Pennsylvania
restructuring (.64) (.77) (2.25)
Extraordinary charge for
retired debt (.09)
DQE merger-related costs (.10)
Cancelled pumped-storage
project (.09)
Pennsylvania settlement costs ----- ----- ------ (.19)
Reported earnings $ .14 $ .80 $ 1.56 $ .06
===== ===== ====== ======
The 2000 extraordinary charge of $70.5 million ($.64 per share) reflects write-offs by the Company's West Virginia subsidiaries as a result of the West Virginia legislation. The extraordinary charges for the twelve months ended March 31, 1999, and the 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 settlement costs reflect 1998 write-offs by the Company's Pennsylvania subsidiary of costs determined to be unrecoverable due to deregulation proceedings in that state. The first quarter 2000 write-off is shown below:
Millions of Dollars
-------------------
Gross Net-of-Tax
----- ----------
Unrecoverable regulatory assets $ 60.0 $ 36.2
Rate stabilization obligation 56.7 34.3
------- -------
2000 extraordinary charges $ 116.7 $ 70.5
======= =======
Allegheny Energy was very active during the first quarter of 2000 on a variety of fronts aimed at increasing revenue and enhancing shareholder value. The following are some of our milestones: -- Expanding Our Generation Fleet In February February: see month. , Allegheny Energy Supply Company, our unregulated energy supply business, announced plans to further increase our generating capacity with the installation of five gas combustion combustion, rapid chemical reaction of two or more substances with a characteristic liberation of heat and light; it is commonly called burning. The burning of a fuel (e.g., wood, coal, oil, or natural gas) in air is a familiar example of combustion. turbines with a combined capacity of 220 megawatts (MW) at various sites throughout Pennsylvania. We are also moving forward with plans to add a 540-MW combined cycle A combined cycle is characteristic of a power producing engine or plant that employs more than one thermodynamic cycle. Heat engines are only able to use a portion of the energy their fuel generates (usually less than 50%). The remaining heat from combustion is generally wasted. generating plant at Springdale Springdale, city (1990 pop. 29,941), Benton and Washington counties, NW Ark.; inc. 1878. It is a poultry-processing center, and there is vegetable canning, printing, and the manufacture of air conditioning ducts, metal and paper products, machinery, transportation , Pa. -- Growing Through Non-Regulated Ventures Several new initiatives announced by Allegheny Communications Connect (ACC See adaptive cruise control. ), our telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. subsidiary, will enable us to leverage our growing, low-cost fiber optic network and offer value-added services A value-added service (VAS) is a telecommunications industry term for non-core services or, in short, all services beyond standard voice calls and fax transmissions. to consumers. ACC's recent activities include: - partnering with BroadbandNOW, Inc. to offer high-speed internet access and multimedia content to retail customers in small- and mid-sized markets; - joining with five other energy and telecommunications companies to create America's Fiber Network, a super-regional, high-speed fiber optics company that will market its fiber capacity to wholesale providers; and - participating in a consortium that has been selected to build an advanced information technology infrastructure and provide state-of-the-art telecommunications services for the Commonwealth of Pennsylvania. -- Ranked Among the Nation's Top Companies Allegheny Energy has been ranked among the nation's top companies in several national reports. Allegheny Power, our energy delivery business, has received national recognition for outstanding customer service in a major independent survey of business customer satisfaction. Allegheny Power was ranked second in the Eastern Region and ninth in the U.S. for customer satisfaction among mid-sized businesses. In addition, Allegheny Energy was named to this year's Fortune 1000, placing 529th overall and 40th in the gas and electric utilities group, and was ranked 485th on the Forbes 500 list. -- Allegheny Energy Employees Help Preserve the Environment In April, more than 800 Allegheny Energy employees, family members, and friends participated in our Earth Day 2000 Tire Collection Project. Volunteers collected nearly 27,000 tires for recycling recycling, the process of recovering and reusing waste products—from household use, manufacturing, agriculture, and business—and thereby reducing their burden on the environment. that had been improperly im·prop·er adj. 1. Not suited to circumstances or needs; unsuitable: improper shoes for a hike; improper medical treatment. 2. discarded dis·card v. dis·card·ed, dis·card·ing, dis·cards v.tr. 1. To throw away; reject. 2. a. To throw out (a playing card) from one's hand. b. in streams and along roadsides in communities throughout our service area. -- Growing Through Customer Choice West Virginia became the final state in our franchised service area to adopt legislation that will give customers the option of choosing their electricity provider. The new law also enables us to transfer our West Virginia generating assets to Allegheny Energy Supply Company, increasing our ability to compete on a larger scale and grow earnings. Allegheny Energy, Inc. is a diversified diversified (di·verˑ·s energy company headquartered in Hagerstown, Md. The Allegheny Energy family includes Allegheny Power, which delivers electric energy and natural gas to about three million people in parts of 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, 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; Allegheny Energy Supply Company, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , which operates and markets competitive retail and wholesale electric generation and operates regulated electric generation for its affiliates; and Allegheny Ventures, which actively invests in and develops telecommunications and energy-related projects. For more information, visit our web site at www.alleghenyenergy.com.
ALLEGHENY ENERGY EARNINGS
First QUARTER 2000
Three months ended March 31 2000 1999
----------------------------------------------------------------------
Sales to regular utility customers,
gigawatt-hours (Note 1) 11,384 11,044
Revenues ($000) (Note 2)
Regular Utility Customers $606,044 $575,181
Other Utility Revenues 16,506 17,411
Nonutility Revenues 244,240 97,395
-------- --------
Total ($000) $866,790 $689,987
======== ========
================= =================
Consolidated income before
extraordinary charge ($000) $86,395 $97,775
West Virginia extraordinary
charge (Note 4) (70,505) --
-------- --------
Consolidated net income ($000) $15,890 $97,775
======== ========
Basic and diluted earnings per average
share (Note 3) $0.78 $0.80
West Virginia extraordinary
charge (Note 4) ($0.64) --
-------- --------
----------------- -----------------
Consolidated earnings per share $0.14 $0.80
======== ========
================= =================
Average common shares outstanding (000) 110,436 122,396
Twelve months ended March 31 2000 1999
----------------------------------------------------------------------
Sales to regular utility customers,
gigawatt-hours (Note 1) 42,957 42,801
Revenues ($000) (Note 2)
Regular Utility Customers $2,223,751 $2,214,942
Other Utility Revenues 79,934 110,724
Nonutility Revenues 681,559 295,287
-------- --------
Total ($000) $2,985,244 $2,620,953
======== ========
Consolidated income before extraordinary
and other charges ($000) $295,808 $306,293
West Virginia, Maryland, and
Pennsylvania extraordinary
charges (Note 4) (87,455) (275,426)
Reacquired debt extraordinary charge (10,018) --
Merger-related costs (11,801) --
Davis pumped-storage generation
project costs (9,998) --
Pennsylvania settlement costs -- (23,748)
-------- --------
Consolidated net income ($000) $176,536 $7,119
======== ========
Basic and diluted earnings per average
share (Note 3)
Before extraordinary and other charges $2.61 $2.50
West Virginia, Maryland, and
Pennsylvania extraordinary
charges (Note 4) (0.77) (2.25)
Reacquired debt extraordinary charge (0.09) --
Merger-related costs (0.10) --
Davis pumped-storage generation
project costs (0.09) --
Pennsylvania settlement costs -- (0.19)
-------- --------
Consolidated earnings per share $1.56 $0.06
-------- --------
Average common shares outstanding (000) 113,274 122,426
======== ========
Note 1: Excludes bulk power transaction sales.
Note 2: Excludes intercompany sales between nonutility and utility.
Note 3: Basic and diluted earnings per share are the same.
Note 4: Costs after taxes determined to be unrecoverable as a result
of deregulation proceedings in West Virginia, Maryland, and
Pennsylvania.
|
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion