Allegheny Energy, Inc. Reports Record First Quarter 2001 Earnings of $.91 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)--April 23, 2001 Continuing to build on its positive earnings growth story from 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 record first quarter 2001 earnings of $.91 per share ($100.5 million), before the cumulative effect of an accounting change. This represents an increase in earnings per share of 17 percent, compared to first quarter 2000 earnings per share of $.78 ($86.4 million), before an extraordinary charge. Drivers of the increased earnings were higher sales and greater net revenues from 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 that are expanding into the national energy marketplace. "The 17 percent increase is only part of our positive story. 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. Energy's unregulated earnings grew by 80 percent, compared to the first quarter of 2000, reflecting our diligence in executing a high-level growth strategy that continues to provide positive results for shareholders," said Alan A`lan´ n. 1. A wolfhound. J. Noia, Chairman of the Board, President, and Chief Executive Officer. "We continue to capture market opportunities that have translated into very satisfying overall results. The addition in this quarter of Allegheny Energy Global Markets -- our new energy marketing and trading arm -- to our portfolio of high-performing businesses has provided us with another dimension of earnings power that we expect will create even greater value in the future." First quarter 2001 net income included a charge of $.28 per share ($31.1 million, net of taxes) from the cumulative effect of an accounting change due to the adoption of the Statement of Financial Accounting Standards (SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System ) No. 133, "Accounting for Derivative Instruments Derivative instruments Contracts such as options and futures whose price is derived from the price of an underlying financial asset. and Hedging Activities." First quarter 2000 net income included an extraordinary charge of $.64 per share ($70.5 million, net of taxes) as a result of electric 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). in 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. . Excluding the accounting change, extraordinary, and other charges as shown on the following chart, earnings for the twelve months ended March 31, 2001, were $327.8 million ($2.97 per share), compared to $295.8 million ($2.61 per share) for the twelve months ended March 31, 2000. This increase in earnings per share of 14 percent was also due to higher net revenues. "Our results are right on track with projected earnings," added Noia. "This keeps us on a clear path toward meeting our 2001 earnings guidance of $3.80-$4.10 a share. We continue to advance our strategy to grow as a national energy merchant, and our portfolio of strong energy businesses are focused intently on providing shareholder value today and into the future." Per share earnings for comparable 2001 and 2000 periods were:
First Quarter 12 Months Ended
March
------------- ---------------
2001 2000 2001 2000
---- ---- ---- ----
Income before accounting change,
extraordinary, and other charges $.91 $.78 $2.97 $2.61
Accounting change: adoption SFAS 133 (.28) (.28)
Extraordinary charges for electric
utility restructuring orders (.64) (.06) (.77)
Extraordinary charge for reacquired debt (.09)
Merger-related costs (.10)
Cancelled pumped-storage project costs (.09)
---- ---- ----- -----
-- -----
Reported earnings per share $.63 $.14 $2.63 $1.56
==== ==== ===== =====
During the first quarter of 2001, Allegheny Energy actively pursued a number of opportunities aimed at increasing revenue and improving shareholder value. The following are some of the quarter's milestones: Generating assets, marketing, and trading -- Allegheny Energy Supply Company completed its acquisition of an energy commodity marketing and trading unit from Merrill Lynch, solidifying Allegheny Energy's position as a national energy merchant. The new Allegheny Energy Supply subsidiary, Allegheny Energy Global Markets, operates out of New York City and is actively marketing and trading electricity, natural gas, and other energy commodities. -- Allegheny Energy Supply signed a long-term, fixed-price power sales agreement with the California Department of Water Resources, the electricity buyer for the state of California. Under terms of the $4.5-billion, 10-year contract, Allegheny Energy Supply has committed to sell up to 1,000 megawatts (MW) of competitively priced electricity (enough to supply 1 million homes) from supply contracts it has secured from generating plants in the Western Systems Coordinating Council Region through Allegheny Energy Global Markets. -- Allegheny Energy Supply expects to close on its acquisition of 1,710 MW of generating capacity in the Midwest in early May. To help finance this acquisition, Allegheny Energy, Inc. plans to issue approximately 10 million shares of common stock next month. -- Allegheny Energy Supply announced plans to construct a 630-MW natural gas-fired merchant generating facility in St. Joseph County, Ind. The $400-million facility, combined with other acquisitions and projects, will give Allegheny Energy nearly 14,000 MW of total owned or controlled generating capacity by 2005. In addition, the Company closed on the purchase of 83 MW of coal-fired generating capacity in the Conemaugh Generating Station near Johnstown, Pa. Regulated operations -- Allegheny Power, the energy delivery business of Allegheny Energy, and PJM PJM Pacific Journal of Mathematics PJM Project Manager PJM Puerto Jimenez, Costa Rica (Airport code) PJM Pennsylvania New Jersey Maryland Interconnection LLC (Mid-Atlantic region power pool) Interconnection in·ter·con·nect v. in·ter·con·nect·ed, in·ter·con·nect·ing, in·ter·con·nects v.intr. To be connected with each other: The two buildings interconnect. v.tr. , LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , filed documents with the Federal Energy Regulatory Commission The Federal Energy Regulatory Commission (FERC) is the United States federal agency with jurisdiction over electricity sales, wholesale electric rates, hydroelectric licensing, natural gas pricing, and oil pipeline rates. to expand PJM through the creation PJM West. The filing represents collaboration Working together on a project. See collaborative software. between Allegheny Power, PJM, and numerous stakeholders Stakeholders All parties that have an interest, financial or otherwise, in a firm-stockholders, creditors, bondholders, employees, customers, management, the community, and the government. . PJM West will develop a new electric transmission system affiliation that will expand the Mid-Atlantic Adj. 1. mid-Atlantic - of a region of the United States generally including Delaware; Maryland; Virginia; and usually New York; Pennsylvania; New Jersey; "mid-Atlantic states" middle Atlantic energy market. Unregulated businesses -- Subsidiary Allegheny Energy Solutions opened new offices in the New York metropolitan area New York–Northern New Jersey–Long Island is the most populous metropolitan area in the United States and the third most populous in the world, after Tokyo and Mexico City. , advancing its strategy of becoming a national energy solutions provider and meeting customer demands in the growing distributed generation Distributed generation generates electricity from many small energy sources. It has also been called also called on-site generation, dispersed generation, embedded generation, decentralized generation, decentralized energy or market. -- Allegheny Ventures, Allegheny Energy's business development arm, acquired a 10 percent equity interest in Utility Associates, an emerging software development company that specializes in creating integrated mobile computing Using a computing device while in transit. Mobile computing implies wireless transmission, but wireless transmission does not necessarily imply mobile computing. Fixed wireless applications use satellites, radio systems and lasers to transmit between permanent objects such as buildings solutions for the utility industry. This investment was another step in Allegheny Energy's strategy to add value for shareholders by seizing investment opportunities in emerging growth companies. Other highlights -- Alan J. Noia, Chairman of the Board, President, and Chief Executive Officer, was elected to serve on the Electric Power Research Institute's Board of Directors for a four-year term. -- Allegheny Energy announced the appointment of Bruce Bruce, Scottish royal family descended from an 11th-century Norman duke, Robert de Brus. He aided William I in his conquest of England (1066) and was given lands in England. E. Walenczyk as Senior Vice President and Chief Financial Officer. Walenczyk will lead Allegheny Energy's financial and treasury functions, as well as take a leadership role in developing and executing the Company's ongoing financial growth strategy to drive shareholder value and meet the challenges of the changing energy industry. Walenczyk replaces former Chief Financial Officer 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:
appointed President and Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. of Allegheny Energy Supply Company earlier this year. -- Record-breaking Adj. 1. record-breaking - surpassing any previously established record; "a record-breaking high jump"; "record-breaking crowds" best - (superlative of `good') having the most positive qualities; "the best film of the year"; "the best solution"; "the best time for financial performance for 2000 landed Allegheny Energy a place on the Fortune 500 list of America's largest corporations, the Forbes "Platinum 400" list, and the Standard & Poor's (S&P) 500 index. Allegheny Energy ranked 417th overall on the Fortune 500 list, which features the largest U.S. companies based on revenue. In addition, the Company was ranked 28th among the gas and electric utilities group. The "Platinum 400" list features companies that are industry leaders in long- and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. return on capital, have annual sales of at least $1 billion, and show growth in both sales and earnings over the past five years. The S&P 500 index is widely regarded as the standard for measuring large-capitalization U.S. stock performance and consists of 500 stocks chosen for market size, liquidity, and industry group representation. Allegheny Energy, Inc. is a diversified diversified (di·verˑ·s energy company headquartered in Hagerstown, Md. We have been named to the Fortune 500 list, the Standard and Poor's Noun 1. Standard and Poor's - a broadly based stock market index Standard and Poor's Index 500 index, and the Forbes "Platinum 400" list. 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 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; Allegheny Energy Supply Company, LLC, 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 Communicating information, including data, text, pictures, voice and video over long distance. See communications. and energy-related projects. For more information, visit our web site at www.alleghenyenergy.com. Allegheny plans to hold its analyst conference call to discuss earnings results at 11:00 a.m. (Eastern Time) on April 24, 2001. 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 within 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. ("AYE" or the "Company"). Such forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, or achievements of AYE to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Such factors may affect AYE's operations, markets, products, services, and prices. Such factors include, among others, the following: weather and natural phenomena; general and economic and business conditions; industry capacity; changes in technology; changes in political, social, and economic conditions; changes in the price of electricity and gas; changes in environmental and other laws; regulatory matters; 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. involving AYE; regulatory conditions applicable to AYE; the loss of any significant customers; and changes in business strategy or development plans.
ALLEGHENY ENERGY EARNINGS
FIRST QUARTER 2001
Three months ended March 31, 2001 2001 2000
---------------------------------------------------------------------
Sales to regulated electric customers,
gigawatt-hours (Note 1) 12,006 11,384
Revenues ($000) (Note 2)
Regulated Electric Revenues $ 640,270 $ 596,278
Regulated Other Revenues 27,724 16,485
Regulated Gas Revenues 109,344 9,787
Unregulated Generation and Energy Marketing 1,029,483 241,066
Allegheny Ventures 7,520 3,174
---------- ---------
Total ($000) $1,814,341 $ 866,790
========== =========
Consolidated income before extraordinary and
other transactions ($000) $ 100,514 $ 86,395
West Virginia extraordinary charges (Note 4) - (70,505)
Cumulative effect of accounting change
(Note 5) (31,147) -
---------- ---------
Consolidated net income ($000) $ 69,367 $ 15,890
========== =========
Basic and diluted earnings per average
share (Note 3)
Before extraordinary and other transactions $ 0.91 $ 0.78
West Virginia extraordinary charges (Note 4) - (0.64)
Cumulative effect of accounting change
(Note 5) (0.28) -
---------- ---------
Consolidated earnings per share $ 0.63 $ 0.14
========== =========
Average common shares outstanding (000) 110,436 110,436
Twelve months ended March 31, 2001 2001 2000
---------------------------------------------------------------------
Sales to regulated electric customers,
gigawatt-hours (Note 1) 45,480 42,682
Revenues ($000) (Note 2)
Regulated Electric Revenues $2,347,483 $ 2,213,981
Regulated Other Revenues 111,441 79,916
Regulated Gas Revenues 203,137 9,787
Unregulated Generation and Energy Marketing 2,270,708 672,868
Allegheny Ventures 26,634 8,692
---------- ---------
Total ($000) $4,959,403 $ 2,985,244
========== =========
Consolidated income before extraordinary and
other transactions ($000) $ 327,771 $ 295,808
Reacquired debt extraordinary charge - (10,018)
Merger-related costs - (11,801)
Davis pumped-storage generation project costs - (9,998)
Maryland, Ohio, Virginia, and West Virginia
extraordinary charges (Note 4) (6,518) (87,455)
Cumulative effect of accounting change
(Note 5) (31,147) -
---------- ---------
Consolidated net income ($000) $ 290,106 $ 176,536
========== =========
Basic and diluted earnings per average share
(Note 3)
Before extraordinary and other transactions $ 2.97 $ 2.61
Reacquired debt extraordinary charge - (0.09)
Merger-related costs - (0.10)
Davis pumped-storage generation project costs - (0.09)
Maryland, Ohio, Virginia, and West Virginia
extraordinary charges (Note 4) (0.06) (0.77)
Cumulative effect of accounting change (Note 5) (0.28) -
---------- ---------
Consolidated earnings per share $ 2.63 $ 1.56
========== =========
Average common shares outstanding (000) 110,436 113,274
Note 1: Excludes bulk power transaction sales.
Note 2: Excludes intercompany sales between regulated and unregulated.
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 Maryland, Ohio, Virginia, and West
Virginia.
Note 5: Adoption of SFAS 133, Accounting for Derivative Instruments
and Hedging Activities.
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