As filed with the Securities and Exchange Commission on August 2, 1999
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8 - K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
DATE OF REPORT - AUGUST 2, 1999
Commission Registrant, State of Incorporation I.R.S. Employer
File Number Address and Telephone Number Identification No.
- ----------- ------------------------------------- ------------------
0-25595 NIAGARA MOHAWK HOLDINGS, INC 16-1549726
(a New York corporation)
300 Erie Boulevard West
Syracuse, New York 13202
Telephone (315) 474-1511
1-2987 NIAGARA MOHAWK POWER CORPORATION. 15-0265555
(a New York corporation)
300 Erie Boulevard West
Syracuse, New York 13202
Telephone (315) 474-1511
<PAGE>
Item 5. Other Events
- ---------------------
(a) On July 29, 1999, Niagara Mohawk Holdings, Inc. issued a press release
relating to its second quarter earnings for 1999. See attached Exhibit
No. 99-1.
(b) On July 29, 1999, Niagara Mohawk Holdings, Inc. issued a press release
relating to program to repurchase common stock and redeem $520 million
debt. See attached Exhibit No. 99-2.
(c) On August 2, 1999, Niagara Mohawk Power Corporation issued a press
release relating to the closing of the sale of its hydro generating assets
. See attached Exhibit No. 99-3.
Item 7. Financial Statements and Exhibits
- ------------------------------------------
(c) Exhibits - Following is the list of Exhibits furnished in accordance
with the provisions of Item 601 of Regulation S-K, filed as part of this
current report on Form 8-K.
Exhibit No. 99-1 - Press release of Niagara Mohawk Holdings, Inc. issued
on July 29, 1999 relating to its second quarter earnings for 1999.
Exhibit No. 99-2 - Press release of Niagara Mohawk Holdings, Inc. issued
on July 29, 1999 relating to program to repurchase common stock and
redeem $520 million debt.
Exhibit No. 99-3 - Press release of Niagara Mohawk Power Corporation
issued on August 2, 1999 relating to the closing of the sale of its
hydro generating assets.
<PAGE>
NIAGARA MOHAWK HOLDINGS, INC. AND SUBSIDIARY COMPANIES
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrants have duly caused this report to be signed on their behalf by the
undersigned thereunto duly authorized.
NIAGARA MOHAWK HOLDINGS, INC.
-----------------------------
(Registrant)
Date: August 2, 1999 By /s/Steven W. Tasker
----------------------------
Steven W. Tasker
Vice President-Controller and
Principal Accounting Officer,
in his respective capacities
as such
NIAGARA MOHAWK POWER CORPORATION
--------------------------------
(Registrant)
Date: August 2, 1999 By /s/Steven W. Tasker
---------------------------
Steven W. Tasker
Vice President-Controller and
Principal Accounting Officer,
in his respective capacities
as such
<PAGE>
EXHIBIT INDEX
-------------
Following is the index of Exhibits furnished in accordance with the provisions
of Item 601 of Regulation S-K, filed as part of this current report on Form
8-K.
Exhibit No. 99-1 - Press release of Niagara Mohawk Holdings, Inc. issued on
July 29, 1999 relating to its second quarter earnings for 1999.
Exhibit No. 99-2 - Press release of Niagara Mohawk Holdings, Inc. issued on
July 29, 1999 relating to program to repurchase common stock and redeem $520
million debt.
Exhibit No. 99-3 - Press release of Niagara Mohawk Power Corporation issued
on August 2, 1999 relating to the closing of the sale of its hydro generating
assets.
EXHIBIT NO. 99-1
NIAGARA MOHAWK HOLDINGS REPORTS STRONGER CASH FLOW
IN SECOND QUARTER
COMPANY PLANS TO RETIRE $1 BILLION IN DEBT THIS YEAR
SYRACUSE, July 29 -- Niagara Mohawk Holdings, Inc. (NYSE: NMK) today
reported that cash flow during the second quarter of 1999 continued to improve
as a result of last year's Master Restructuring Agreement (MRA) with a group of
Independent Power Producers (IPPs), and the POWERCHOICE agreement. 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.
Earnings before interest, income taxes, depreciation and amortization
(EBITDA) for the 12 months ended June 30, 1999, were $1,297 million, an increase
of approximately $500 million compared to the 12 months ended June 30, 1998.
The significant improvement in EBITDA is due primarily to a reduction in
payments to the IPPs.
As expected, the company reported a loss in the second quarter of 1999.
The reported loss was $36.0 million, or 19 cents per share, as compared to a
loss of $150.6 million, or $1.04 per share, for the second quarter in 1998.
Niagara Mohawk's lower aggregate fuel and purchased power costs, partly offset
by increased interest charges, improved earnings by $38.3 million, or 20 cents
per share, during the second quarter. However, the non-cash amortization of the
MRA regulatory asset reduced earnings in the second quarter by $62.8 million, or
34 cents per share. Results in the second quarter of 1999 also reflect the cost
of reacquiring approximately $151.7 million of first mortgage bond debt, which
reduced earnings in the second quarter by $10.8 million, or 6 cents per share,
and is reflected as an extraordinary item. The loss for the second quarter of
1998 reflects the impact of the one-time, non-cash POWERCHOICE charge of $171.1
million after-tax, or $1.18 per share.
The company reported a loss of $3.2 million, or a loss of 2 cents per
share, for the 12 months ended June 30, 1999, as compared to a loss of $118.5
million, or a loss of 82 cents per share, for the same period in 1998. The loss
for the 12-month period ended June 30, 1999, reflects the ongoing impacts of the
MRA and POWERCHOICE, while the loss for the 12-month period ended June 30, 1998,
includes the impact of the one-time, non-cash POWERCHOICE charge.
The increased cash flow from operations, together with the proceeds from
the sale of its coal-fired electric generating stations, the expected proceeds
from the sale of its remaining non-nuclear generating assets, and a 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 second quarter of 1999 were $747.9 million, down
4.5 percent from the second quarter of 1998, primarily due to POWERCHOICE rate
reductions and lower wholesale sales. For the 12 months ended June 30, 1999,
electric revenues were $3,212.3 million, down 1.9 percent compared to the same
period in 1998.
Natural gas revenues in the second quarter of 1999 were $122.6 million,
down 4.0 percent from the second quarter of 1998, primarily as a result of
decreased sales due to warmer weather during the second quarter of 1999. For
the 12 months ended June 30, 1999, natural gas revenues were $571.2 million,
down 3.5 percent compared to the same period in 1998.
The Consolidated Statements of Income will be filed with the Securities
and Exchange Commission on Form 8-K.
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.
<PAGE>
NIAGARA MOHAWK HOLDINGS, INC.
-----------------------------
(Unaudited)
EARNINGS REPORT
---------------
(IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED TWELVE MONTHS ENDED
JUNE 30, JUNE 30, JUNE 30,
1999 1998 1999 1998 1999 1998
---------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Operating Revenues. . . . . . . . . . $ 914,321 $ 944,684 $2,033,455 $2,108,581 $3,917,324 $4,062,806
Operating Income (Loss) . . . . . . . 81,153 (193,538) 333,001 (61,969) 556,007 127,217
Income (Loss) Before
Extraordinary Item. . . . . . . . . (25,297) (150,579) 25,535 (139,439) 7,594 (118,464)
Extraordinary Item for Loss from
Extinguishment of Debt (Net) (10,750) -- (10,750) -- (10,750) --
Net Income (Loss) . . . . . . . . . . ($36,047) ($150,579) $ 14,785 ($139,439) ($3,156) ($118,464)
Average Number of Shares of
Common Stock Outstanding
(in thousands). . . . . . . . . . . 187,365 144,891 187,365 144,657 187,365 144,537
Basic and Diluted Earnings (Loss)
per Average Share of Common Stock . ($0.19) ($1.04) $ 0.08 ($0.96) ($0.02) ($0.82)
EBITDA. . . . . . . . . . . . . . . . $ 226,656 -- $ 715,253 -- $1,296,646 --
Net Cash Interest . . . . . . . . . . $ 102,356 -- $ 212,006 -- $ 442,795 --
Ratio of EBITDA to Net Cash Interest 2.2 -- 3.4 -- 2.9 --
</TABLE>
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.
<PAGE>
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
<TABLE>
<CAPTION>
In thousands of dollars
Three Months Ended Six Months Ended Twelve Months Ended
NIAGARA MOHAWK HOLDINGS, INC. June 30, June 30, June 30,
1999 1998* 1999 1998* 1999* 1998*
---------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
OPERATING REVENUES:
Electric. . . . . . . . . . . . . . . . . . . . . . $ 747,886 $ 783,282 $1,597,632 $1,646,451 $3,212,325 $3,273,986
Gas . . . . . . . . . . . . . . . . . . . . . . . . 122,575 127,624 368,850 362,859 571,220 592,198
Non-utility . . . . . . . . . . . . . . . . . . . . 43,860 33,778 66,973 99,271 133,779 196,622
- --------------------------------------------------- ---------- ----------- ----------- ----------- ----------- -----------
914,321 944,684 2,033,455 2,108,581 3,917,324 4,062,806
---------- ----------- ----------- ----------- ----------- -----------
OPERATING EXPENSES:
Fuel for electric generation. . . . . . . . . . . . 47,010 51,190 104,104 98,388 245,698 205,186
Electricity purchased . . . . . . . . . . . . . . . 219,787 338,001 395,079 712,920 808,344 1,380,210
Gas purchased . . . . . . . . . . . . . . . . . . . 56,526 69,403 171,784 200,076 279,549 355,511
Other operation and maintenance expenses. . . . . . 219,947 214,128 426,290 478,447 896,757 913,017
POWERCHOICE charge. . . . . . . . . . . . . . . . . - 263,227 - 263,227 - 263,227
Amortization of MRA regulatory asset. . . . . . . . 96,624 - 193,249 - 322,082 -
Depreciation and amortization . . . . . . . . . . . 94,109 87,951 188,925 176,010 368,834 347,004
Other taxes . . . . . . . . . . . . . . . . . . . . 99,165 114,322 221,023 241,482 440,053 471,434
- --------------------------------------------------- ---------- ----------- ----------- ----------- ----------- -----------
833,168 1,138,222 1,700,454 2,170,550 3,361,317 3,935,589
---------- ----------- ----------- ----------- ----------- -----------
OPERATING INCOME (LOSS) . . . . . . . . . . . . . . 81,153 (193,538) 333,001 (61,969) 556,007 127,217
Other income (deductions) . . . . . . . . . . . . . (2,011) 11,085 (3,414) 18,038 27,136 36,678
- --------------------------------------------------- ---------- ----------- ----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE INTEREST CHARGES . . . . . . . 79,142 (182,453) 329,587 (43,931) 583,143 163,895
Interest charges. . . . . . . . . . . . . . . . . . 129,960 65,861 260,235 131,451 525,962 268,477
Preferred dividend requirement of subsidiary. . . . 9,024 9,171 18,048 18,394 36,209 36,983
- --------------------------------------------------- ---------- ----------- ----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE FEDERAL. . . . . . . . . . . . (59,842) (257,485) 51,304 (193,776) 20,972 (141,565)
& FOREIGN INCOME TAXES
Federal & foreign income taxes. . . . . . . . . . . (34,545) (106,906) 25,769 (54,337) 13,378 (23,101)
- --------------------------------------------------- ---------- ----------- ----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE EXTRAORINDARY ITEM . . . . . . (25,297) (150,579) 25,535 (139,439) 7,594 (118,464)
EXTRAORDINARY ITEM FOR THE LOSS FROM
EXTINGUISHMENT OF DEBT, NET OF INCOME
TAXES OF $5,789. . . . . . . . . . . . . . . . . (10,750) - (10,750) - (10,750) -
- --------------------------------------------------- ---------- ----------- ----------- ----------- ----------- -----------
NET INCOME (LOSS) . . . . . . . . . . . . . . . . . ($36,047) ($150,579) $ 14,785 ($139,439) ($3,156) ($118,464)
- --------------------------------------------------- ========== =========== =========== =========== =========== ===========
AVERAGE NUMBER OF SHARES OF COMMON
STOCK OUTSTANDING (IN THOUSANDS) . . . . . . . . 187,365 144,891 187,365 144,657 187,365 144,537
BASIC AND DILUTED EARNINGS (LOSS)
PER AVERAGE SHARE OF COMMON STOCK
BEFORE EXTRAORDINARY ITEM . . . . . . . . . . . ($0.13) ($1.04) $ 0.14 ($0.96) $ 0.04 ($0.82)
EXTRAORDINARY ITEM. . . . . . . . . . . . . . . . . (0.06) - (0.06) - (0.06) -
- --------------------------------------------------- ---------- ----------- ----------- ----------- ----------- -----------
BASIC AND DILUTED EARNINGS (LOSS) PER
AVERAGE SHARE OF COMMON STOCK. . . . . . . . . . ($0.19) ($1.04) $ 0.08 ($0.96) ($0.02) ($0.82)
- --------------------------------------------------- ========== =========== =========== ============ =========== ===========
Other Operating Data:
Earnings before interest charges, interest income,
income taxes, depreciation and amortization,
and other regulatory adjustments (EBITDA) . . . . . $ 226,656 - $ 715,253 - $1,296,646 -
Net cash interest . . . . . . . . . . . . . . . . . $ 102,356 - $ 212,006 - $ 442,795 -
Ratio of EBITDA to net cash interest. . . . . . . . 2.2 - 3.4 - 2.9 -
</TABLE>
NOTES:
* Prior period consolidated financial statements have been prepared from Niagara
Mohawk Power Corporation'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.
EXHIBIT NO. 99-2
NIAGARA MOHAWK ANNOUNCES COMMON STOCK BUYBACK,
CALLS NOTES FOR EARLY REDEMPTION
SYRACUSE, July 29 -- Niagara Mohawk Holdings, Inc. (NYSE: NMK), today
announced that its Board of Directors has approved a program to repurchase 20
million shares of its common stock by December 31, 2001. Initiation of the
stock buyback program is contingent on New York Public Service Commission
approval.
The company also announced that its regulated subsidiary, Niagara Mohawk
Power Corp., will redeem $500 million aggregate principal amount of the Series
B through F Senior Notes on a pro rata basis (by series). Niagara Mohawk Power
Corp. will also redeem all outstanding Medium Term Notes, totaling $20 million.
The Senior Notes and Medium Term Notes are being redeemed at a redemption
price of 100 percent, plus accrued interest to September 8. On and after that
date, interest on the notes will cease to accrue. A Notice of Redemption will
be mailed on behalf of the company by IBJ Whitehall Bank & Trust Company, as
trustee, to holders of these notes.
"With today's announcement that we will retire an additional $520 million
in debt, we have achieved our goal to retire more than $1 billion of debt in
1999," said William E. Davis, Chairman and CEO of Niagara Mohawk Holdings. "The
announcement of a stock buyback program is another major step in our efforts to
strengthen our capital structure and to rebuild shareholder value," said Davis.
EXHIBIT NO. 99-3
NIAGARA MOHAWK COMPLETES SALE OF HYDROELECTRIC PLANTS
SYRACUSE, Aug. 2 -- Niagara Mohawk Power Corp., a wholly owned subsidiary
of Niagara Mohawk Holdings, Inc. (NYSE: NMK), today announced the closing of
the sale of its 71 hydroelectric generating plants. Orion Power Holdings, Inc.
has acquired the plants for $425 million. Orion is jointly owned by affiliates
of Goldman, Sachs & Co. and Constellation Energy Group (NYSE: CEG). The sale
of the hydroelectric plants, with a combined capacity of 661 megawatts, was
announced last December.
"This sale represents further progress toward the full divestiture of our
generating assets," said William E. Davis, chairman and CEO of Niagara Mohawk
Holdings. "We will use the proceeds from the sale to retire debt as we seek
to optimize our capital structure and to rebuild shareholder value."
Last month, Niagara Mohawk completed the sale of its two coal-fired
electric generating stations. The company has agreements in place to sell its
Oswego Steam Station, its Nine Mile Point Nuclear Unit One station, and its 41
percent ownership of Nine Mile Point Nuclear Unit Two. The company also plans
to sell its Albany Steam generating station and its share of the Roseton
Station, an oil/gas facility located in Newburgh.
The divestiture of Niagara Mohawk's generating assets is one of the key
elements of the company's POWERCHOICE plan to reduce electricity prices and
promote competition.
