News Release EXHIBIT NO. 99
NIAGARA MOHAWK HOLDINGS REPORTS SECOND QUARTER RESULTS
SYRACUSE, July 28 - Niagara Mohawk Holdings, Inc. (NYSE: NMK) today
reported financial results for the second quarter 2000. Niagara Mohawk
Holdings, Inc. (the company) is the parent company of Niagara Mohawk Power
Corp. (Niagara Mohawk), a regulated energy delivery company.
Earnings before interest, taxes, depreciation and amortization (EBITDA)
for the 12 months ended June 30, 2000 were approximately $1.16 billion, compared
to approximately $1.29 billion in the same period in 1999.
The company reported a loss for the second quarter of 2000 of $19.7
million, or a loss of 12 cents per share, slightly improved over the second
quarter in 1999, when the company reported a loss of $36.0 million, or a loss of
19 cents per share. Losses in both periods include an extraordinary item to
reflect the cost of the early retirement of debt, which amounted to $0.9
million, or 1 cent per share, in the second quarter of 2000, and $10.8 million,
or 6 cents per share, in the second quarter of 1999.
As a result of lower interest costs due to the retirement of over $1
billion in debt since the beginning of 1999, earnings in the second quarter
2000, as compared to the second quarter 1999, were improved by $13.3 million,
or 8 cents per share. Earnings in the second quarter 2000 were also improved
by approximately $8.0 million, or 4 cents per share, due to lower operating
expenses, primarily related to Niagara Mohawk's customer service system, Y2K
program costs, and nuclear outage costs.
Earnings in the second quarter 2000, compared to the second quarter 1999,
were reduced by approximately $18.7 million, or 7 cents per share, for the cost
of higher production at hydroelectric generating stations owned by Independent
Power Producers and by approximately $3.0 million, or 2 cents per share, as a
result of the second phase of electricity price reductions implemented as part
of Niagara Mohawk's current electric regulatory agreement.
New York Independent System Operator (NYISO) charges further reduced second
quarter 2000 earnings by approximately $4.6 million, or 3 cents per share. The
NYISO, which began formal operations on December 1, 1999, replaced the New York
Power Pool and now manages the bulk transmission system in New York.
"As expected, the company's earnings remain depressed while we continue to
amortize the costs of the Master Restructuring Agreement," said William E.
Davis, chairman and chief executive officer of Niagara Mohawk Holdings.
"Nevertheless, we remain committed to our strategy to retire debt and buy back
common stock. Since the start of 1999, we have retired over $1 billion in debt
and repurchased over 26 million shares of common stock."
The company reported a loss of $5.2 million, or a loss of 3 cents per
share, for the six months ended June 30, 2000, as compared to earnings of $14.8
million, or 8 cents per share, for the six-month period a year ago. Earnings
for both six-month periods include extraordinary charges related to the early
retirement of debt: $0.9 million, or 1 cent per share, for the period ended June
30, 2000, and $10.8 million, or 6 cents per share, for the period ended June 30,
1999. In addition, earnings for the six months ended June 30, 2000, compared to
the same period in 1999, were lower as a result of lower gas gross margin, costs
associated with the operation of the NYISO, higher hydroelectric IPP production
costs, and electric price reductions. These reductions were partially offset by
decreased interest costs.
Niagara Mohawk's electric revenues in the second quarter of 2000 were
$778.6 million, up 4.1 percent from the second quarter of 1999. Electric
revenues for the six months ended June 30, 2000 were $1,602.2 million, up 0.3
percent compared to the same period in 1999. Revenues from retail customers
decreased 4.4 and 8.1 percent, respectively, for the three-month and six-month
periods ended June 30, 2000, while revenues from transportation, distribution
and sales to other utilities increased 144.6 and 98.3 percent, respectively,
compared to the three-month and six-month periods in 1999.
Retail sales of electricity decreased 11.3 percent for the three-month
period ended June 30, 2000, and decreased 9.3 percent for the six-month period
ended June 30, 2000, as compared to the same periods in 1999. Retail revenues
and sales declined in part due to milder weather and lower prices, and due to
the fact that under retail choice more customers chose to buy electricity from
energy service providers.
Niagara Mohawk's natural gas revenues for the second quarter 2000 were
$138.9 million, up 13.4 percent from the second quarter of 1999. For the six
months ended June 30, 2000, natural gas revenues were $384.1 million, up 4.1
percent, compared to the same period a year ago.
Retail sales of natural gas for the three months ended June 30, 2000
increased 15.1 percent, compared to the same period in 1999, due largely to the
cooler-than-normal weather. Retail sales of natural gas for the six months
ended June 30, 2000 decreased 1.4 percent, compared to the same period in 1999.
Total deliveries of natural gas, which include the transportation of
customer-owned gas, were up 19.7 percent for the three months ended June 30,
2000, and up 4.1 percent for the six months ended June 30, 2000, respectively,
as compared to the same periods a year ago. Transportation of customer-owned
gas increased in both periods as more customers are participating in Niagara
Mohawk's retail access program.
Consolidated Statements of Income will be filed with the Securities and
Exchange Commission on Form 8-K.
The company will host a conference call for analysts today at 10:00 a.m.
EDT to discuss second-quarter results. Analysts who wish to join the conference
call should dial 800-275-3210 after 9:50 a.m. For those unable to join the call
at that time, a replay will be available for one week by calling 888-845-7412.
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.
