Puget Energy Reports First-Quarter 2004 Earnings; Winter Temperatures Support Improved Results.Business Editors BELLEVUE Bellevue (bĕl`vy  ).1 City (1990 pop. 30,982), Sarpy co., E Nebr., a suburb of Omaha, on the Missouri River; inc. 1855. , Wash.--(BUSINESS WIRE)--April 27, 2004 Puget For the explorer of Puget Sound, see Peter Puget. Puget is a commune of the Vaucluse département in southern France. Coordinates: Energy (NYSE NYSE See: New York Stock Exchange :PSD (tool) PSD - Portable Scheme Debugger. ): Puget Energy 1st Q 2004 highlights -- Income for common stock of $66.4 million or 67 cents per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share -- Reaffirm re·af·firm tr.v. re·af·firmed, re·af·firm·ing, re·af·firms To affirm or assert again. re full-year 2004 guidance of $1.50 to $1.60 per share
First Quarter ended
March 31,
-----------------------
(in millions except per share data) 2004 2003 Change
---------- ---------------------
Revenues $ 743.5 $ 640.6 16%
Operating Income 109.7 91.4 20%
Net Income for common stock 66.4 42.7 55%
Earnings per share (diluted) $ 0.67 $ 0.45 49%
Puget Energy's (NYSE:PSD) 2004 first-quarter income for common stock of $66.4 million, or 67 cents per diluted share, compared with $42.7 million, or 45 cents per diluted share, in the first quarter of 2003. These results were largely driven by near-normal winter temperatures that increased sales of natural gas and electricity for Puget Sound Energy Puget Sound Energy (PSE) is an energy company providing electrical power and natural gas in the Puget Sound region of the northwest United States. It serves electrical power to over 1 million customers in Island, Jefferson, King, Kitsap, Kittitas, Pierce, Skagit, Thurston, and (PSE PSE 1. pale soft exudative pork. 2. portosystemic encephalopathy. ), the company's utility subsidiary. Earnings for the same period in 2003 were lower primarily due to reduced energy sales caused by winter temperatures that were warmer than normal and higher power Higher power is a term used in a 12-step program, such as Alcoholics Anonymous, to describe "a power greater than yourself." Although many participants equate their higher power with God, a belief in God or in formal religion is not mandatory; the higher power is intended as a costs incurred through the utility's power cost adjustment mechanism. "We are pleased with our improved first-quarter performance, and our earnings are on target for the year," said Stephen Stephen, 1097?–1154, king of England (1135–54). The son of Stephen, count of Blois and Chartres, and Adela, daughter of William I of England, he was brought up by his uncle, Henry I of England, who presented him with estates in England and France and P. Reynolds, Puget Energy President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "Our efforts to rebuild the company's financial strength continue on schedule," he added. Reynolds noted that Puget Sound Puget Sound (py `jĕt), arm of the Pacific Ocean, NW Wash., connected with the Pacific by Juan de Fuca Strait, entered through the Admiralty Inlet and extending in two arms c. Energy's customer base
continues to grow above the national average. "We are fortunate to
serve a vibrant, growing region A growing region is an area suited by climate and soil conditions to the cultivation of a certain type of crop. Most crops are cultivated not in one place only, but in several distinct regions in diverse parts of the world. ," said Reynolds. "We are
working with our regulators and others to obtain the financial
capability needed to extend the pipes and wires to customers and secure
least-cost energy resources to serve them. I remain fully committed (Law) committed to prison for trial, in distinction from being detained for examination.See also: Fully to meeting our goals for sustained, long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. growth," added Reynolds. Included in Puget Sound Energy's strategy to secure additional power generation is the purchase of a 49.85 percent share (137 megawatts) of the Federickson Power LP plant near Tacoma Tacoma (təkō`mə), city (1990 pop. 176,664), seat of Pierce co., W Wash., on Commencement Bay and Puget Sound at the mouth of the Puyallup River; inc. 1884. , Washington Washington, town, England Washington, town (1991 pop. 48,856), Sunderland metropolitan district, NE England. Washington was designated one of the new towns in 1964 to alleviate overpopulation in the Tyneside-Wearside area. . The company this week obtained final 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. approval to proceed with the purchase. Quarterly Highlights First-quarter 2004 highlights for Puget Sound Energy -- First-quarter 2004 earnings of $66.9 million, or 67 cents per share, compared with $46.2 million, or 49 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , for the same period in 2003. -- PSE's energy margins for the first quarter of 2004 increased by $26.9 million, primarily due to a 7 percent increase in gas therm therm (therm) a unit of heat. The word has been used as equivalent to (a) large calorie; (b) small calorie; (c) 1000 large calories; (d) 100,000 British thermal units. sales and a 5 percent increase in electric kilowatt-hour kil·o·watt-hour n. Abbr. kWh or kW-hr A unit of electric energy equal to the work done by one kilowatt acting for one hour. sales to PSE's customers compared with the first quarter of 2003. Electric sales and revenues totaled 6.4 million megawatt-hours and $392.5 million, respectively. Gas sales and revenues totaled 374.5 million therms and $275.7 million, respectively. PSE's first quarter 2003 energy sales and margins were adversely impacted by warmer than normal temperatures which reduced PSE's first quarter 2003 financial results by approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 10 cents per share. Electric margin is electric sales to retail and transportation customers less the cost of generating and purchasing electric energy sold to customers, including transmission costs, to bring electric energy to PSE's service territory. Gas margin is gas sales to retail and transportation customers less the cost of gas purchased, including gas transportation costs, to bring gas to PSE's service territory. -- The number of heating degree-days in the first quarter of 2004 was 96 percent of normal (4 percent warmer) compared with 91 percent of normal (9 percent warmer) in the first quarter of 2003.
Heating Degree Heating Degree
Days % Change Days % Change
---------------- ------------- -------------- ----------
Month Ending 2004 vs. 2004 vs.
2004 Normal(1) Normal 2004 2003 2003
January 757 747 1% Colder 757 590 28% Colder
February 589 634 7% Warmer 589 648 9% Warmer
March 530 582 9% Warmer 530 556 5% Warmer
First Quarter 1,876 1,963 4% Warmer 1,876 1,794 5% Colder
(1) Heating degree days in 2004 are adjusted for leap year by
adding the heating degree day for February 28th. In the first quarter
of 2003 there were 1,942 heating degree days.
-- During the first three months of 2004, the average number of natural gas customers in PSE's service territory grew by 3.5 percent to approximately 650,700, and electric customers increased by 2.1 percent to approximately 983,600 customers over the same period in 2003. -- In the first quarter of 2004, PSE recovered the majority of net variable electric power supply costs through the Power Cost Adjustment Mechanism (PCA (tool, programming) PCA - A dynamic analyser from DEC giving information on run-time performance and code use. ) compared to an under-recovery of approximately $11.6 million, or 8 cents per share, in the first quarter of 2003. Net power costs of $13.9 million are being deferred for later recovery in PSE's electric rates for the first quarter of 2004 under the PCA. The PCA allows the Company to recover variable power costs on a shared basis with its customers if PSE's costs vary from a baseline The horizontal line to which the bottoms of lowercase characters (without descenders) are aligned. See typeface. baseline - released version level established in electric rates. Under the PCA, PSE's cumulative maximum pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta earnings exposure due to power-supply cost variations over the four-year period ending June June: see month. 30, 2006 is limited to $40 million plus 1 percent of the excess. At year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. 2003, the cumulative $40 million power cap was reached. In 2004, PSE's earnings should therefore be minimally impacted by increases in variable power-supply costs, whether stemming from adverse hydrological hy·drol·o·gy n. The scientific study of the properties, distribution, and effects of water on the earth's surface, in the soil and underlying rocks, and in the atmosphere. conditions, changes in market prices, higher fuel costs, forced outages or other causes. Current estimates of hydrological conditions suggest that PSE's share of excess power costs will remain at the $40 million cumulative cap level at year-end 2004. -- Utility operations and maintenance expenses for the first quarter of 2004 totaled $73.9 million, an increase of approximately $3.8 million, compared to the same period a year ago. First quarter 2004 operations and maintenance expenses include approximately $6.2 million, or 4 cents per share, of electric storm damage restoration costs. In 2003, PSE incurred approximately $1.8 million, or 1 cent per share, in electric-service restoration costs related to storm damage. -- PSE's income-tax expense increased by $4.7 million, or 13.6 percent, to $39.2 million in the first quarter of 2004 compared to $34.5 million for the first quarter of 2003. The increase was primarily due to higher income realized in the first quarter of 2004 compared to the first quarter in 2003. -- As a result of initiatives in 2003 to reduce debt and refinance Refinance 1. When a business or person revises their payment schedule for repaying debt. 2. Replacing an older loan with a new loan offering better terms. Notes: When a business refinances they typically extend the maturity date. higher cost securities, PSE's financial results benefited from a combined decrease in interest expense and preferred dividends preferred dividend n. a payment of a corporation's profits to holders of preferred shares of stock. (See: preferred stock) of $4.4 million after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. , in the first quarter of 2004 as compared with the same period in 2003. During the fourth quarter 2003, Puget Energy sold approximately $100 million of common stock. The sale was non-dilutive to 2003 and 2004 expected earnings per share because the proceeds were invested in PSE and were used to redeem redeem v. to buy back, as when an owner who had mortgaged his/her real property pays off the debt. The term also refers to paying the amount due and all charges after a foreclosure (due to failure to make payments when due) has begun. approximately $94 million of high-cost preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. . -- PSE's common equity ratio was 40.9 percent at March 31, 2004 compared to 37.0 percent at March 31, 2003. First-quarter 2004 highlights for InfrastruX Group (InfrastruX) -- InfrastruX, the 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. utility construction services subsidiary of Puget Energy, reported a loss of $0.4 million (less than 1 cent per share), as compared with a loss of $3.4 million (4 cents per share) for the first of quarter 2003, net of minority interests. In 2003, InfrastruX's first quarter financial results were adversely impacted by severe winter weather in the Northeast “Northeastern” redirects here. For the Boston college, see Northeastern University, Boston. Northeast or north east is the ordinal direction halfway between north and east. It is the opposite of southwest. See boxing the compass. and Midwest Midwest or Middle West, region of the United States centered on the western Great Lakes and the upper-middle Mississippi valley. It is a somewhat imprecise term that has been applied to the northern section of the land between the Appalachians and extremely wet winter conditions in the South, resulting in a significant slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. in utility construction work in the areas where InfrastruX primarily conducts business. The construction services business is seasonal, with highest revenues in the second and third quarters of the year when weather conditions are more supportive supportive adjective Pertaining to a Pt management philosophy in which only the Sx of a particular condition are treated; supportive measures are often taken when no specific and/or effective therapy is available or accessible–eg, viral meningitis, or .
First Quarter 2004 vs. First Quarter 2003 Reconciliation
Cents Per Share
Puget Energy Q1 2003 Reported Earnings (fully diluted) $ 0.45
Change in margin related to customer usage 0.10
Change in margin related to PCA mechanism 0.08
Change in InfrastruX results 0.04
Increase in Operations and Maintenance Expense -0.03
All other variances, net 0.03
------------------------------------------------------ -------
Puget Energy Q1 2004 Reported Earnings (fully diluted) $ 0.67
------------------------------------------------------ -------
PSE Regulatory Initiatives -- In April 2004, the Washington Utilities and Transportation Commission (WUTC WUTC Washington Utilities and Transportation Commission ) and 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. (FERC FERC Federal Energy Regulatory Commission FERC FEMA Emergency Response Capability ) both approved PSE's request to purchase a 49.85 percent interest or approximately 137 megawatts in the Frederickson 1 generating facility located in Tacoma, Washington for $80 million. PSE expects to finalize fi·nal·ize tr.v. fi·nal·ized, fi·nal·iz·ing, fi·nal·iz·es To put into final form; complete or conclude: "They have jointly agreed ... the acquisition by the end of April 2004. -- The WUTC is expected to issue a separate order by the end of April 2004 to resolve the remaining issues in PSE's power cost only rate case including certain potential future fuel cost disallowances relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the Tenaska and Encogen generating facilities proposed by the WUTC staff. PSE believes that the fuel cost disallowances relating to Tenaska and Encogen proposed by the WUTC staff are legally and factually fac·tu·al adj. 1. Of the nature of fact; real. 2. Of or containing facts. fac deficient de·fi·cient adj. 1. Lacking an essential quality or element. 2. Inadequate in amount or degree; insufficient. deficient a state of being in deficit. and PSE filed its rebuttal rebuttal n. evidence introduced to counter, disprove or contradict the opposition's evidence or a presumption, or responsive legal argument. case on February February: see month. 13, 2004. These costs are currently recovered in rates and PSE believes it is probable PROBABLE. That which has the appearance of truth; that which appears to be founded in reason. that recovery will occur in the future. If, however, the Commission were to adopt the WUTC staff's recommendations, the proposed fuel cost disallowances would adversely affect the Company's future financial performance. -- On April 5, 2004, PSE filed an electric and natural-gas rate-increase proposal with the WUTC designed to financially strengthen the utility as well as to enhance customer service and stabilize stabilize See peg. energy costs. 2004 Outlook -- Puget Energy anticipates its 2004 financial results to be within the range of $1.50 to $1.60 per share, which is unchanged from earnings guidance given when the company released its calendar year 2003 financial results in its news release on February 10, 2004. -- In a normal water year, Puget Sound Energy obtains approximately 38 percent of its energy supply from low cost hydroelectric facilities, primarily from dams below Grand Coulee cou·lee n. 1. Western U.S. A deep gulch or ravine with sloping sides, often dry in summer. 2. Louisiana & Southern Mississippi a. A streambed, often dry according to the season. b. on the Columbia River Columbia River River, southwestern Canada and northwestern U.S. Rising in the Canadian Rockies, it flows through Washington state, entering the Pacific Ocean at Astoria, Ore.; it has a total length of 1,240 mi (2,000 km). . The Northwest For names and places containing the slightly longer word 'northwestern' (or variants), see . Northwest or north west is the ordinal direction halfway between north and west on a compass. It is the opposite of southeast. Rivers Forecast Center on April 19, 2004 predicted that stream-flows in that basin would be only 84 percent of normal. If the forecasted stream-flow reductions occur, the Company will need to replace low cost hydropower hy·dro·pow·er n. Hydroelectric power. with more expensive thermally generated and purchased power. Under the PCA mechanism, PSE's 2004 earnings should be minimally impacted by these power costs if incurred. -- PSE is continuing to implement its multi-stage plan to acquire approximately 400 megawatts (MWs) of electric energy in the near-term near-term adj. Of, for, or involving a short period of time in the near future. to meet its core customers needs. PSE has issued requests for proposals (RFP (Request For Proposal) A document that invites a vendor to submit a bid for hardware, software and/or services. It may provide a general or very detailed specification of the system. 1. (business) RFP - Request for Proposal. 2. ) for up to 355 average megawatts (aMW) from any power supply resource, including 50 aMW of wind power and additional electricity savings through 20 megawatts of conservation on an incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. basis each year through 2013. FIRST-QUARTER 2004 EARNINGS ANALYST TELECONFERENCE A conference call for analysts to discuss with management the first-quarter results and the outlook for future performance is scheduled at 10 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT (7 a.m. PDT PDT abbr. Pacific Daylight Time PDT Pacific Daylight Time PDT n abbr (US) (= Pacific Daylight Time) → hora de verano del Pacífico PDT ) Wednesday Wednesday: see week. , April 28, 2004. The conference call will be broadcast live through a Web cast at www.pse.com by accessing the Investors section of the Web site. The Web cast will be archived and available for replay following the live conference call. A recorded replay of the conference call also will be available two hours after completion on April 28 through midnight (EDT) Wednesday, May 12, 2004. To access the recording, dial 888-286-8010, and enter the conference I.D. number 26471713. Puget Energy is an energy services holding company that conducts all of its operations through its subsidiaries, PSE and InfrastruX Group. PSE is a regulated 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. utility company that generates, purchases and sells electricity; and purchases, transports and sells natural gas. The service territory of PSE covers approximately 6,000 square miles A square mil is a unit of area, equal to the area of a square with sides of length one mil. A mil is one thousandth of an international inch. This unit of area is usually used in specifying the area of the cross section of a wire or cable. , principally in the Puget Sound region of Washington state. InfrastruX specializes in contracting services to other gas and electric utilities primarily in the Midwest, Texas, and the south-central Adj. 1. south-central - situated in the southern part of a centrally located area in some geographical region; "south-central London" south - situated in or facing or moving toward or coming from the south; "the south entrance" 2. and the eastern United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. regions. Certain statements contained in this news release are "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. " within the meaning of the federal securities laws. Although Puget Energy and Puget Sound Energy believe that the expectations reflected in such statements are reasonable, there can be no assurance that the expected results will be achieved. For additional information concerning certain assumptions, risks, and uncertainties involved in the forward-looking statements contained herein, please refer to Puget Energy's reports on file with the SEC.
PUGET ENERGY -- SUMMARY INCOME STATEMENT
----------------------------------------
(In thousands, except per-share amounts)
Unaudited
Three months ended
3/31(1)
-------------------
2004 2003
--------- --------
Operating revenues
Electric(2) $392,495 $381,673
Gas 275,692 187,788
Non-utility construction services 74,756 70,677
Other 527 499
-------- --------
Total operating revenues 743,470 640,637
-------- --------
Operating expenses
Purchased electricity(2) 196,367 205,112
Residential exchange (54,423) (52,679)
Purchased gas 162,407 86,954
Electric generation fuel 13,988 15,074
Unrealized (gain) loss on derivative
instruments (87) (477)
Utility operations & maintenance 73,855 70,055
Other operations & maintenance 67,002 70,521
Depreciation & amortization 60,288 57,944
Conservation amortization 8,190 7,722
Taxes other than income taxes 67,492 57,660
Income taxes 38,711 31,366
-------- --------
Total operating expenses 633,790 549,252
-------- --------
Operating income 109,680 91,385
Other income (net of tax) 64 704
-------- --------
Income before interest charges & minority interest 109,744 92,089
Interest charges
AFUDC (1,078) (616)
Interest expense 44,477 48,281
Mandatorily redeemable securities interest
expense(3) 23 ---
-------- --------
Total interest charges 43,422 47,665
-------- --------
Minority interest (43) (332)
-------- --------
Net income before cumulative effect of
accounting change 66,365 44,756
FAS-143 transition adjustment loss (net of tax) --- 169
-------- --------
Net Income 66,365 44,587
Less preferred stock dividend accruals(3) --- 1,867
-------- --------
Income for common stock $ 66,365 $ 42,720
======== ========
Common shares outstanding 99,169 93,740
Diluted shares outstanding 99,637 94,172
-------- --------
Basic earnings per common share before
cumulative effect of accounting change $ 0.67 $ 0.46
Cumulative effect of accounting change --- ---
-------- --------
Basic earnings per common share $ 0.67 $ 0.46
======== ========
Diluted earnings per common share before
cumulative effect of accounting change $ 0.67 $ 0.45
Cumulative effect of accounting change --- ---
-------- --------
Diluted earnings per common share(4) $ 0.67 $ 0.45
======== ========
(1) Partial-year results may not accurately predict full-year
performance, as earnings are significantly affected by weather.
(2) Effective January 1, 2004, non-trading derivative instruments
meeting Emerging Issues Task Force Issue No. 03-11 must be shown net
in the income statement. Previous year amounts have been reclassified
to conform to the current presentation.
(3) Effective July 1, 2003, SFAS 150, "Accounting for Certain
Financial Instruments with Characteristics of Both Liabilities and
Equity," requires companies with equity that has characteristics of
debt to classify their dividends as interest expense instead of as
preferred stock dividends.
(4) Diluted earnings per common share include the dilutive effect
of securities related to employee compensation plans.
PUGET SOUND ENERGY -- UTILITY OPERATING DATA
-----------------------------------------------------------
Three months ended 3/31
-----------------------
2004 2003
----------- ----------
Energy sales revenues ($ in thousands; unaudited)
Electricity
Residential $ 204,398 $ 190,671
Commercial 153,607 147,548
Industrial 22,374 23,135
Other retail sales, including change in
unbilled (12,881) (13,618)
---------- ----------
Subtotal, retail sales 367,498 347,736
Transportation, including change in
unbilled 2,253 3,174
Sales to other utilities & marketers(1) 11,487 21,895
Other(2) 11,257 8,868
---------- ----------
Total electricity sales 392,495 381,673
Gas
Residential 180,761 124,492
Commercial 77,463 49,631
Industrial 11,126 7,223
---------- ----------
Subtotal, retail sales 269,350 181,346
Transportation 3,432 3,511
Other 2,910 2,931
---------- ----------
Total gas sales 275,692 187,788
---------- ----------
Total energy sales revenues $ 668,187 $ 569,461
----------- ----------
Energy sales volumes (Unaudited)
Electricity (in mWh)
Residential 3,289,191 3,101,106
Commercial 2,196,287 2,113,957
Industrial 327,028 344,520
Other, including change in unbilled (210,510) (219,923)
---------- ----------
Subtotal, retail sales 5,601,996 5,339,660
Transportation, including change in
unbilled 483,702 491,578
Sales to other utilities & marketers 269,610 487,634
---------- ----------
Total mWh 6,355,308 6,318,872
Gas (in 000's of therms)
Residential 203,749 187,568
Commercial 99,740 91,696
Industrial 14,849 13,863
Transportation 56,182 57,281
---------- ----------
Total gas volumes 374,520 350,408
----------- ----------
Margins(3)($ in thousands; unaudited)
Electric $ 194,135 $ 172,772
Gas 87,124 81,629
----------- ----------
Customers served(4)(Unaudited)
Electricity
Residential 866,872 850,389
Commercial 110,594 107,309
Industrial 3,976 3,937
Other 2,150 2,027
Transportation 16 16
---------- ----------
Total electricity customers 983,608 963,678
Gas
Residential 599,222 578,636
Commercial 48,582 47,088
Industrial 2,738 2,728
Transportation 129 137
---------- ----------
Total gas customers 650,671 628,589
----------- ----------
Weather (Unaudited)
Actual heating degree days 1,876 1,794
Normal heating degree days(5) 1,963 1,942
(1) Effective January 1, 2004, non-trading derivative instruments
meeting Emerging Issues Task Force Issue No. 03-11 must be shown net
in the income statement. Previous year amounts have been reclassified
to conform to the current presentation.
(2) Includes Conservation Trust collection and sales of non-core
gas supplies. As of the third quarter 2003 the Conservation Trust
payments to bondholders are no longer shown as a reduction in revenue
but as an expense due to the consolidation of the Conservation Trust
onto PSE's books beginning July 1, 2003. There is no impact on net
income.
(3) Electric margin is electric sales to retail and transportation
customers less the cost of generating and purchasing electric energy
sold to customers, including transmission costs, to bring electric
energy to PSE's service territory. Gas margin is gas sales to retail
and transportation customers less the cost of gas purchased, including
gas transportation costs, to bring gas to PSE's service territory.
(4) Quarterly data represents average served during March.
(5) Seattle-Tacoma Airport statistics reported by NOAA which are
based on a 30-year average, 1971-2000. Heating degree days measure how
far the daily average temperature falls below 65 degrees. Heating
degree days in 2004 are adjusted for leap year by adding the heating
degree day for February 28th.
PUGET ENERGY -- SEGMENT RESULTS
-------------------------------
(In thousands)
Three months ended Regulated Puget
3/31/04 Utility Energy
(Unaudited) Operations InfrastruX Other(1) Total
---------------------------------------------------------------------
Revenues $ 668,187 $ 74,756 $ 527 $ 743,470
Depreciation and
amortization 55,807 4,418 63 60,288
Income taxes 39,220 (386) (123) 38,711
Operating income 108,801 937 (58) 109,680
Interest charges 42,015 1,356 51 43,422
Net income 66,854 (380) (109) 66,365
-------------------------- ---------- -------- ---------- ----------
Goodwill, net at 3/31/04 $ - $133,069 $ - $ 133,069
Total assets at 3/31/04 5,308,778 338,711 72,502 5,719,991
-------------------------- ---------- -------- ---------- ----------
Three months ended
3/31/03 (Unaudited)
--------------------------------------------------------------------
Revenues $ 569,461 $ 70,677 $ 499 $ 640,637
Depreciation and
amortization 54,532 3,359 53 57,944
Income taxes 34,497 (3,096) (35) 31,366
Operating income 93,815 (2,479) 49 91,385
Interest charges 46,356 1,309 - 47,665
Net income 47,981 (3,443) 49 44,587
-------------------------- ---------- -------- ---------- ----------
Goodwill,
net at 12/31/03 $ - $133,302 $ - $ 133,302
Total assets at
12/31/03 5,257,157 342,332 75,196 5,674,685
-------------------------- ---------- -------- ---------- ----------
PUGET SOUND ENERGY - CAPITALIZATION
-----------------------------------
(Unaudited)
At At
March 31, December 31,
(In thousands) 2004 2003
-------------------------- -------------------- ---------------------
Amount % Amount %
------------------------------------- -------- ---------- ----------
Short-term debt(2) $ - 0.0% $ - 0.0%
Junior subordinated
debentures of the
corporation
payable to a subsidiary
trust holding
mandatorily
redeemable preferred
securities 280,250 7.1% 280,250 7.2%
Mandatorily redeemable
preferred stock and
long-term debt, including
current maturities 2,034,753 52.0% 2,054,894 52.8%
Preferred stock - 0.0% - 0.0%
Common equity 1,601,023 40.9% 1,555,469 40.0%
-------------------------- ---------- -------- ---------- ----------
Total capitalization
including short-term
debt $3,916,026 100.0% $3,890,613 100.0%
-------------------------- ---------- -------- ----------- ----------
(1) Includes the non-regulated subsidiaries of Puget Sound Energy
and miscellaneous holding company expenses. The principal
non-regulated subsidiary of PSE is a real estate development company.
(2) At March 31, 2004 and December 31, 2003, Rainier Receivables, a
wholly owned subsidiary of PSE, had sold $37 million and $111 million,
respectively, in accounts receivable under the accounts receivable
securization program.
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