As filed with the Securities and Exchange Commission on February 4, 2000
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 - FEBRUARY 4, 2000
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 February 4, 2000, Niagara Mohawk Holdings, Inc. issued a press
release relating to its annual and fourth quarter earnings for 1999.
See attached Exhibit No. 99.
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 - Press release of Niagara Mohawk Holdings, Inc. issued on
February 4, 2000, relating to its annual and fourth quarter earnings for 1999.
<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: February 4, 2000 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: February 4, 2000 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 - Press release of Niagara Mohawk Holdings, Inc. issued on
February 4, 2000 relating to its annual and fourth quarter earnings for 1999.
EXHIBIT NO. 99
NIAGARA MOHAWK HOLDINGS REPORTS 1999 RESULTS
SYRACUSE, Feb. 4 - Niagara Mohawk Holdings Inc. (NYSE: NMK) today reported
financial results for 1999, concluding a year in which the company continued to
improve its financial stability. It was also a year that saw Niagara Mohawk
Power Corp. make great progress toward its goal of becoming an energy delivery
company, by completing the sale of its hydroelectric generating plants and the
sale of most of its fossil-fueled generating stations. Niagara Mohawk Holdings
Inc. (the company) is the parent company of Niagara Mohawk Power Corp. (Niagara
Mohawk), a regulated energy delivery company.
Last year marked the first full year of the Master Restructuring Agreement
with a group of Independent Power Producers, and the PowerChoice regulatory
agreement. Although earnings were depressed as a result of the non-cash
charges related to the MRA, the company's cash flow improved significantly in
1999. Earnings before interest, taxes, depreciation and amortization (EBITDA)
for the year ended December 31, 1999, were $1.26 billion, an increase of
approximately $270 million compared to the year ended December 31, 1998. The
improvement in EBITDA is due primarily to a reduction in payments to IPPs.
Cash flow before debt service increased to $488 million in 1999 from $311
million in 1998. Cash flow is defined as EBITDA, less capital expenditures,
cash interest and cash taxes.
During 1999, Niagara Mohawk received approximately $860 million from the
sale of its hydroelectric and fossil-fueled generating assets. These proceeds,
together with the increased cash flow and Federal income tax refunds of $135
million, enabled the company to retire over $1.1 billion in debt and repurchase
10 million shares of its common stock in 1999. "We remain committed to our
strategy of retiring capital and rebuilding shareholder value," said William E.
Davis, chairman and chief executive officer of Niagara Mohawk Holdings.
The company reported a 1999 loss of $35.1 million, or a loss of 19 cents
per share, which includes a 13 cent per share extraordinary charge related to
the early retirement of debt, compared to a 1998 loss of $157.4 million, or a
loss of 95 cents per share. Niagara Mohawk's lower purchased power costs,
partially offset by increased interest charges, improved earnings by $108.0
million, or 58 cents per share, for the year ended December 31, 1999. This
improvement was offset by the incremental non-cash amortization of the MRA
regulatory asset of $167.5 million, or 90 cents per share. Additionally,
earnings in 1999 were reduced by $23.8 million, or 13 cents per share, because
of costs related to the implementation of a new customer service system, and by
$21.0 million, or 11 cents per share, because of higher bad debt expense. In
1998 the company recorded a one-time, non-cash charge to earnings of $171.1
million, or $1.03 per share related to the MRA and PowerChoice. Earnings in
1998 were also lower due to the incremental costs of a January ice storm and a
Labor Day windstorm, reducing earnings by approximately $40.4 million, or 24
cents per share, and $10.2 million, or 6 cents per share, respectively.
In connection with the sale of its generating assets in 1999, Niagara
Mohawk entered into agreements with the new owners to purchase power from these
facilities. The cost to purchase this power was largely offset by reductions
in fuel for electric generation, operating and maintenance expenses, property
taxes, and depreciation expense.
The company reported a fourth-quarter 1999 loss of $18.2 million, or a loss
of 10 cents per share, compared to a fourth-quarter 1998 loss of $26.5 million,
or a loss of 14 cents per share. Results for the fourth quarter of 1999 were
improved over last year's fourth quarter primarily due to lower interest charges
resulting from the company's debt reduction efforts. The non-cash amortization
of the MRA regulatory asset reduced earnings in both the fourth quarter of 1999
and the fourth quarter of 1998, by $62.8 million, or 34 cents per share.
Niagara Mohawk's electric revenues for 1999 were $3.2 billion, down
slightly from 1998. Electric revenues for the fourth quarter of 1999 were up
5.5 percent compared to the same period last year. Retail sales of electricity
increased 2.7 percent and 2.2 percent for the year and for the fourth quarter
of 1999, respectively, as compared to the same periods in 1998.
Niagara Mohawk's natural gas revenues for 1999 were $579.6 million, up 2.5
percent from 1998. Fourth-quarter 1999 natural gas revenues were up 4.3
percent, compared to the same period last year. Retail sales of natural gas for
the year and for the fourth quarter of 1999 increased 5.5 percent and 0.2
percent, respectively, compared to the same periods in 1998. Total gas
deliveries, which includes the transportation of customer-owned gas, were up 5.2
percent for 1999, and up 23.7 percent in the fourth quarter of 1999.
Consolidated Statements of Income and Selected Operating Information will
be filed today with the Securities and Exchange Commission on Form 8-K.
NIAGARA MOHAWK HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
<TABLE>
<CAPTION>
In thousands of dollars
Three Months Ended Year Ended
December 31, December 31,
1999 1998 1999 1998
-------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATING REVENUES:
Electric . . . . . . . . . . . . . . . . . . . . . . . . . $ 867,158 $ 765,971 $3,464,901 $3,390,501
Gas. . . . . . . . . . . . . . . . . . . . . . . . . . . . 146,006 137,816 611,226 601,276
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . 3,340 279 8,059 643
- ---------------------------------------------------------- ------------- -------------- ----------- -----------
1,016,504 904,066 4,084,186 3,992,420
------------- -------------- ----------- -----------
OPERATING EXPENSES:
Electricity purchased. . . . . . . . . . . . . . . . . . . 298,315 146,385 1,012,811 1,138,453
Fuel for electric generation . . . . . . . . . . . . . . . 32,474 61,549 189,657 239,982
Gas purchased. . . . . . . . . . . . . . . . . . . . . . . 77,054 61,896 297,641 307,841
Other operation and maintenance expenses . . . . . . . . . 254,316 243,605 910,871 948,297
PowerChoice charge . . . . . . . . . . . . . . . . . . . . - - - 263,227
Amortization of MRA regulatory asset . . . . . . . . . . . 96,625 96,649 386,499 128,833
Depreciation and amortization. . . . . . . . . . . . . . . 76,796 91,042 345,473 355,919
Other taxes. . . . . . . . . . . . . . . . . . . . . . . . 86,094 103,274 415,082 460,940
------------- -------------- ----------- -----------
921,674 804,400 3,558,034 3,843,492
------------- -------------- ----------- -----------
OPERATING INCOME . . . . . . . . . . . . . . . . . . . . . 94,830 99,666 526,152 148,928
Other income (deductions). . . . . . . . . . . . . . . . . (1,389) (3,758) (1,571) 52,071
Allowance for other funds used during construction . . . . 1,116 2,337 5,366 8,626
- ---------------------------------------------------------- ------------- -------------- ----------- -----------
INCOME BEFORE INTEREST CHARGES . . . . . . . . . . . . . . 94,557 98,245 529,947 209,625
Interest charges . . . . . . . . . . . . . . . . . . . . . 108,953 134,911 492,492 407,406
Allowance for borrowed funds used during construction. . . (1,609) (2,842) (7,252) (10,228)
Preferred dividend requirement of subsidiary . . . . . . . 9,769 9,024 36,808 36,555
- ---------------------------------------------------------- ------------- -------------- ----------- -----------
INCOME (LOSS) BEFORE FEDERAL
& FOREIGN INCOME TAXES. . . . . . . . . . . . . . . . . . (22,556) (42,848) 7,899 (224,108)
Federal & foreign income taxes . . . . . . . . . . . . . . (4,390) (16,391) 19,180 (66,728)
- ---------------------------------------------------------- ------------- -------------- ----------- -----------
LOSS BEFORE EXTRAORDINARY ITEM . . . . . . . . . . . . . . (18,166) (26,457) (11,281) (157,380)
Extraordinary item - loss from the
extinguishment of debt,
net of income taxes of $12,819. . . . . . . . . . . . - - (23,807) -
- ---------------------------------------------------------- ------------- -------------- ----------- -----------
NET LOSS . . . . . . . . . . . . . . . . . . . . . . . . . $ (18,166) $ (26,457) $ (35,088) $ (157,380)
============= ============== =========== ===========
AVERAGE NUMBER OF SHARES OF COMMON
STOCK OUTSTANDING (IN THOUSANDS) . . . . . . . . . . . . 184,684 187,365 186,689 166,186
BASIC AND DILUTED LOSS PER AVERAGE
SHARE OF COMMON STOCK BEFORE EXTRAORDINARY ITEM . . . . . $ (0.10) $ (0.14) $ (0.06) $ (0.95)
Extraordinary item per average share
of common stock. . . . . . . . . . . . . . . . . . . . . - - (0.13) -
- ---------------------------------------------------------- ------------- -------------- ----------- -----------
BASIC AND DILUTED LOSS PER AVERAGE
SHARE OF COMMON STOCK. . . . . . . . . . . . . . . . $ (0.10) $ (0.14) $ (0.19) $ (0.95)
- ---------------------------------------------------------- ============= ============== =========== ===========
OTHER OPERATING DATA:
Earnings before interest charges, interest income,
income taxes, depreciation and amortization, and . . . . . $1,259,500 $ 990,500
other regulatory requirements (EBITDA)
Net cash interest. . . . . . . . . . . . . . . . . . . . . $ 397,100 $ 345,500
Ratio of EBITDA to net cash interest . . . . . . . . . . . 3.2 2.9
Cash flow before debt service (EBITDA less
capital expenditures, less cash interest, less cash taxes) $ 488,000 $ 311,000
</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.
NIAGARA MOHAWK POWER CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
<TABLE>
<CAPTION>
In thousands of dollars
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1999 1998 1999 1998
-------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATING REVENUES:
Electric . . . . . . . . . . . . . . . . . . . . . . . $ 796,537 $ 755,096 $3,247,757 $3,261,144
Gas. . . . . . . . . . . . . . . . . . . . . . . . . . 137,025 131,336 579,583 565,229
- ------------------------------------------------------ ------------ -------------- ----------- -----------
933,562 886,432 3,827,340 3,826,373
------------ -------------- ----------- -----------
OPERATING EXPENSES:
Electricity purchased:
Independent power producers . . . . . . . . . . . 96,435 105,082 431,623 880,016
Hydro/Fossil power purchase agreements. . . . . . 55,362 - 125,328 -
Other . . . . . . . . . . . . . . . . . . . . . . 79,455 30,232 250,087 121,975
------------ -------------- ----------- -----------
231,252 135,314 807,038 1,001,991
Fuel for electric generation . . . . . . . . . . . . . 32,474 61,549 189,657 239,982
Gas purchased. . . . . . . . . . . . . . . . . . . . . 68,291 55,769 266,723 272,141
Other operation and maintenance expenses . . . . . . . 247,176 240,011 889,100 937,798
PowerChoice charge . . . . . . . . . . . . . . . . . . - - - 263,227
Amortization of MRA regulatory asset . . . . . . . . . 96,625 96,649 386,499 128,833
Depreciation and amortization. . . . . . . . . . . . . 76,675 90,877 344,930 355,417
Other taxes. . . . . . . . . . . . . . . . . . . . . . 85,272 103,000 411,842 459,961
- ------------------------------------------------------ ------------ -------------- ----------- -----------
837,765 783,169 3,295,789 3,659,350
------------ -------------- ----------- -----------
OPERATING INCOME . . . . . . . . . . . . . . . . . . . 95,797 103,263 531,551 167,023
Allowance for other funds used during construction . . 1,116 2,337 5,366 8,626
Other income (deductions). . . . . . . . . . . . . . . (3,834) (7,355) (11,048) 33,976
- ------------------------------------------------------ ------------ -------------- ----------- -----------
INCOME BEFORE INTEREST CHARGES . . . . . . . . . . . . 93,079 98,245 525,869 209,625
Allowance for borrowed funds used during construction. (1,609) (2,842) (7,252) (10,228)
Interest charges . . . . . . . . . . . . . . . . . . . 108,953 134,911 492,492 407,406
- ------------------------------------------------------ ------------ -------------- ----------- -----------
INCOME (LOSS) BEFORE FEDERAL & FOREIGN
INCOME TAXES. . . . . . . . . . . . . . . . . . . (14,265) (33,824) 40,629 (187,553)
Federal & foreign income taxes . . . . . . . . . . . . (3,454) (16,391) 18,883 (66,728)
- ------------------------------------------------------ ------------ -------------- ----------- -----------
INCOME (LOSS) BEFORE EXTRAORDINARY ITEM. . . . . . . . (10,811) (17,433) 21,746 (120,825)
Extraordinary item - loss from the extinguishment
of debt, net of income taxes of $12,819 . . . . . - - (23,807) -
- ------------------------------------------------------ ------------ -------------- ----------- -----------
NET LOSS . . . . . . . . . . . . . . . . . . . . . . . (10,811) (17,433) (2,061) (120,825)
Dividends on preferred stock . . . . . . . . . . . . . 9,769 9,024 36,808 36,555
- ------------------------------------------------------ ------------ -------------- ----------- -----------
BALANCE AVAILABLE FOR COMMON STOCK . . . . . . . . . . $ (20,580) $ (26,457) $ (38,869) $ (157,380)
- ------------------------------------------------------ ============ ============== =========== ===========
</TABLE>
NOTES:
- - 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.
NIAGARA MOHAWK HOLDINGS, INC.
-----------------------------
(Unaudited)
EARNINGS REPORT
---------------
(IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1999 1998 1999 1998
----------- --------- ----------- -----------
<S> <C> <C> <C> <C>
Operating Revenues . . . . . . . . . . . . . . $1,016,504 $904,066 $4,084,186 $3,992,420
Operating Income . . . . . . . . . . . . . . . 94,830 99,666 526,152 148,928
Loss Before Extraordinary Item . . . . . . . . (18,166) (26,457) (11,281) (157,380)
Extraordinary Item for Loss from
Extinguishment of Debt (Net) . . . . . . . . . -- -- (23,807) --
Net Loss . . . . . . . . . . . . . . . . . . . $ (18,166) $(26,457) $ (35,088) $ (157,380)
Average Number of Shares of Common Stock
Outstanding (in thousands). . . . . . . . . . 184,684 187,365 186,689 166,186
Basic and Diluted Loss per Average Share
of Common Stock Before Extraordinary Item . . $ (0.10) $ (0.14) $ (0.06) $ (0.95)
Extraordinary Item Per Average Share of
Common Stock . . . . . . . . . . . . . . . . . -- -- (0.13) --
Basic and Diluted Loss
per Average Share of Common Stock. . . . . . $ (0.10) $ (0.14) $ (0.19) $ (0.95)
EBITDA . . . . . . . . . . . . . . . . . . . . -- -- $1,259,500 $ 990,500
Net Cash Interest. . . . . . . . . . . . . . . -- -- $ 397,100 $ 345,500
Ratio of EBITDA to Net Cash Interest . . . . . -- -- 3.2 2.9
Cash Flow Before Debt Service. . . . . . . . . -- -- $ 488,000 $ 311,000
</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.
