As filed with the Securities and Exchange Commission on October 27, 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 - October 27, 2000
Commission File Registrant, State of Incorporation I.R.S. Employer
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
Item 5. Other Events
---------------------
(a) On October 27, 2000, Niagara Mohawk Holdings, Inc. issued a press release relating to its third quarter
earnings for 2000. 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 October 27, 2000 relating to
its third quarter earnings for 2000.
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: October 27, 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: October 27, 2000 By /s/Steven W. Tasker
-----------------------------
Steven W. Tasker
Vice President-Controller and
Principal Accounting Officer,
in his respective capacities
as such
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 October 27, 2000 relating to its third
quarter earnings for 2000.
EXHIBIT NO. 99
NIAGARA MOHAWK HOLDINGS REPORTS THIRD QUARTER RESULTS
SYRACUSE, October 27 - Niagara Mohawk Holdings, Inc. (NYSE: NMK), parent company of Niagara Mohawk Power Corp.
(Niagara Mohawk), a regulated energy delivery company, today reported financial results for the third quarter,
2000.
Earnings before interest, taxes, depreciation and amortization (EBITDA) for the 12 months ended September 30,
2000 were approximately $1.18 billion, compared with approximately $1.16 billion for 12 months ended June 30,
2000, and approximately $1.29 billion for the 12 months ended September 30, 1999. The continued strong cash flow
has allowed the company to make significant progress in retiring capital. In 1999, the company retired over $1.1
billion in debt and so far this year has retired over $500 million of debt. Additionally, the company has
repurchased 27 million shares of its common stock.
For the third quarter, 2000, Niagara Mohawk Holdings reported earnings of $2.7 million, or 2 cents per share, as
contrasted with a loss of $31.7 million, or a negative 17 cents per share, for the third quarter last year. The
prior year's third-quarter loss included an extraordinary item reflecting the early retirement of debt amounting
to $13.1 million, or 7 cents per share.
Third-quarter 2000 earnings include approximately $19.4 million, or 12 cents per share, of insurance proceeds
and disaster relief associated with the 1998 ice storm restoration effort. The quarter's earnings also include
$9.5 million, or 6 cents per share, because of higher gas gross margin, and $6.2 million, or 4 cents per share,
due to lower interest costs resulting from continuing debt retirement.
Conversely, third-quarter 2000 results were reduced by approximately $19.5 million, or 12 cents per share, as a
result of Niagara Mohawk's exposure to higher natural gas prices, and by $3.4 million, or 2 cents per share, due
to the second and third phases of electricity price reductions implemented as part of Niagara Mohawk's regulatory
restructuring agreement.
Significantly higher natural gas prices impacted Niagara Mohawk's fuel and purchased power costs during the third
quarter, principally because restructured contracts with Independent Power Producers began indexing to natural
gas prices in July. Fuel and purchased power costs were also higher in the quarter because of an indexed
contract with the new owner of the Albany generating station and because of Niagara Mohawk's continued 25 percent
ownership in the Roseton generating station. The Albany and Roseton stations are both fueled by oil or natural
gas. With respect to its exposure to the restructured contracts with the IPPs and the Albany contract, Niagara
Mohawk has taken steps to hedge against further volatility in natural gas prices, largely by purchasing NYMEX gas
futures contracts at an incremental cost of $6 million to $8 million per month through August 2001, which marks
the end of the fixed price period in Niagara Mohawk's multi-year regulatory agreement. Niagara Mohawk remains
exposed to natural gas price changes at the Roseton station until the sale of the plant, projected by year-end,
is completed. Niagara Mohawk estimates its incremental exposure at Roseton for the remainder of the year to be
approximately $3 million.
Commenting on the quarter, William E. Davis, chairman and chief executive officer of Niagara Mohawk Holdings
said, "The value creation inherent in our aggressive capital retirement strategy was recognized by the National
Grid Group in our recently announced merger agreement."
The company reported a loss of $2.5 million, or a negative 1 cent per share, for the nine months ended September
30, 2000, as compared with a loss of $16.9 million, or a negative 9 cents per share, for the nine-month period a
year ago. Earnings for the nine-months ended September 30, 1999 included an extraordinary charge related to the
early retirement of debt of $23.8 million, or 13 cents per share.
Earnings for the nine-month period ended September 30, 2000, compared to the same period in 1999, were increased
by $33.7 million, or 20 cents per share, due to lower interest costs, and by $19.4 million, or 12 cents per
share, related to the recovery of January 1998 ice storm costs.
The increases, however, were offset by a number of factors. Earnings were reduced by $19.5 million, or 12 cents
per share, as a result of Niagara Mohawk's exposure to higher natural gas prices; by $18.9 million, or 11 cents
per share, for costs associated with the operation of the New York Independent System Operator; by $12.2 million,
or 7 cents per share, for higher production from hydroelectric IPPs; and by $11.0 million, or 6 cents per share,
as a consequence of electric price reductions.
Niagara Mohawk's electric revenues in the third quarter of 2000 were $829.8 million, down 2.8 percent from the
third quarter, 1999. Electric revenues for the nine months ended September 30, 2000 were $2.4 billion, down 0.9
percent compared with the same period in 1999. Revenues from retail customers decreased 13.0 and 9.8 percent,
respectively, for the three-month and nine-month periods ended September 30, 2000, while revenues from
transmission, distribution and wholesale sales increased 167.2 and 120.4 percent, respectively, compared with the
three-month and nine-month periods in 1999. Retail revenues in both periods decreased primarily due to milder
weather and the fact that under retail choice, more customers chose to buy electricity from energy service
providers.
Niagara Mohawk's total sales of electricity, which include deliveries to customers who chose to buy electricity
from energy service providers, decreased 1.8 percent for the three-month period ended September 30, 2000, and
decreased 2.6 percent for the nine-month period ended September 30, 2000, as compared with the same periods in
1999. Total sales of electricity declined primarily due to milder weather.
Niagara Mohawk's natural gas revenues for the third quarter, 2000 were $79.8 million, up 8.2 percent from the
third quarter of 1999. For the nine months ended September 30, 2000, natural gas revenues were $462.6 million,
up 4.5 percent, from the same period a year ago. Revenues in both periods reflect the recovery of higher natural
gas costs.
Niagara Mohawk's total deliveries of natural gas, including the transportation of customer-owned gas, were down
9.6 percent for the three months ended September 30, 2000, and up 0.8 percent for the nine months ended September
30, 2000, as compared with the same periods a year ago. Total deliveries in both periods were impacted by mild
weather.
Consolidated Statements of Income will be filed with the Securities and Exchange Commission on Form 8-K.
The company will host a quarterly earnings conference call today at 10:00 a.m. Eastern Daylight Time to discuss
third-quarter results. In order to join the conference call, please dial 800-370-0906 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 888-459-5782.
In addition, the conference call will be simultaneously webcast live and archived at http://www.NiagaraMohawk.com
and http://www.vcall.com. Listeners should go to either web site at least fifteen minutes before the event to
download and install any necessary audio software. A replay will be available beginning approximately two hours
after the event. There is no charge to access this event.
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.
NIAGARA MOHAWK HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
In thousands of dollars
Three Months Ended Nine Months Ended Twelve Months Ended
September 30, September 30, September 30,
2000 1999 2000 1999 2000 1999
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OPERATING REVENUES:
Electric $1,004,847 $946,556 $2,827,261 $2,597,743 $3,694,419 $3,363,714
Gas 90,953 83,009 507,130 465,220 653,136 603,036
Other 3,804 4,662 5,292 4,719 8,632 4,998
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1,099,604 1,034,227 3,339,683 3,067,682 4,356,187 3,971,748
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OPERATING EXPENSES:
Electricity purchased 482,441 319,417 1,265,078 714,496 1,563,393 860,881
Fuel for electric generation 19,103 53,079 48,077 157,183 80,551 218,732
Gas purchased 45,650 48,803 282,630 220,587 359,684 282,483
Other operation and maintenance expenses 189,229 236,337 636,598 674,615 895,979 925,654
Amortization/accretion of MRA/IPP buyout costs 93,903 90,553 281,539 271,814 373,099 361,029
Depreciation and amortization 77,492 79,752 233,804 268,677 310,600 359,719
Other taxes 70,672 106,048 209,446 327,070 294,834 430,051
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978,490 933,989 2,957,172 2,634,442 3,878,140 3,438,549
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OPERATING INCOME 121,114 100,238 382,511 433,240 478,047 533,199
Other income (deductions) (4,173) 7,527 (6,538) 4,113 (6,713) 2,759
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INCOME BEFORE INTEREST CHARGES 116,941 107,765 375,973 437,353 471,334 535,958
Interest charges 108,249 117,661 329,146 377,896 436,490 509,965
Preferred dividend requirement of subsidiary 7,871 8,991 23,679 27,039 33,448 36,063
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INCOME (LOSS) BEFORE INCOME TAXES 821 (18,887) 23,148 32,418 1,396 (10,070)
Income taxes (1,903) (234) 24,759 25,536 21,173 9,505
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INCOME (LOSS) BEFORE EXTRAORDINARY ITEM 2,724 (18,653) (1,611) 6,882 (19,777) (19,575)
Extraordinary item - Loss from the
extinguishment of debt, net of income taxes - (13,054) (909) (23,804) (909) (23,804)
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NET INCOME (LOSS) $2,724 ($31,707) ($2,520) ($16,922) ($20,686) ($43,379)
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Average number of shares of common stock
outstanding (in thousands) 161,001 187,365 169,782 187,365 173,528 187,365
Basic and diluted earnings (loss) per average
share of common stock before extraordinary item $0.02 ($0.10) ($0.01) $0.04 ($0.11) ($0.10)
Extraordinary item per average share of
common stock - (0.07) - (0.13) (0.01) (0.13)
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Basic and diluted earnings (loss) per average
share of common stock $0.02 ($0.17) ($0.01) ($0.09) ($0.12) ($0.23)
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OTHER OPERATING DATA:
Earnings before interst charges, interest income, income taxes, depreciation and amortization,
amortization of nuclear fuel, allowance for funds used during construction, amortization/
accretion of MRA/IPP buyout cots, deferral of MRA intereset rate savings, and
extraordinary items (EBITDA). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,180,787 $1,289,167*
Net cash interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 351,620 $ 423,371
Ratio of EBITDA to net cash interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.4 3.0
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 fiancial information set forth above, you are requested
to refer to such filings for more detailed information.
* EBITDA for the 12 months ended September 30, 1999, which had been reported as
$1,278,000, has been restated reflecting a change in the company's EBITDA calculation
methodology.
NIAGARA MOHAWK POWER CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
In thousands of dollars
Three Months Ended Nine Months Ended Twelve Months Ended
September 30, September 30, September 30,
2000 1999 2000 1999 2000 1999
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OPERATING REVENUES:
Electric $829,785 $853,588 $2,428,057 $2,451,220 $3,224,594 $3,206,316
Gas 79,752 73,708 462,577 442,558 599,602 573,894
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909,537 927,296 2,890,634 2,893,778 3,824,196 3,780,210
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OPERATING EXPENSES:
Electricity purchased:
Independent power producers 67,362 61,938 238,538 262,159 315,126 333,830
Hydro/Fossil power purchase agreements 27,610 61,738 85,154 67,966 142,516 67,966
NYISO 142,619 - 382,501 - 415,120 -
Swap payments 25,560 26,961 53,097 70,282 80,991 102,450
New York Power Authority 38,925 54,782 105,263 83,509 21,754 107,077
New York Power Pool - 17,363 - 47,996 - 50,987
Other 1,710 8,680 5,315 43,874 125,613 48,790
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303,786 231,462 869,868 575,786 1,101,120 711,100
Fuel for electric generation 19,103 53,079 48,077 157,183 80,551 218,732
Gas purchased 34,009 39,672 237,974 198,432 306,265 254,201
Other operation and maintenance expenses 182,071 228,082 619,583 659,984 871,824 907,429
Amortization/accretion of MRA/IPP buyout costs 93,903 90,553 281,539 271,814 373,099 361,029
Depreciation and amortization 77,360 79,584 233,404 268,255 310,079 359,132
Other taxes 70,533 105,859 208,785 326,570 294,057 429,277
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780,765 828,291 2,499,230 2,458,024 3,336,995 3,240,900
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OPERATING INCOME 128,772 99,005 391,404 435,754 487,201 539,310
Other income (deductions) (7,170) 4,968 (14,562) (2,939) (17,165) (7,890)
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INCOME BEFORE INTEREST CHARGES 121,602 103,973 376,842 432,815 470,036 531,420
Interest charges 108,249 117,661 329,146 377,896 436,490 509,965
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INCOME (LOSS) BEFORE INCOME TAXES 13,353 (13,688) 47,696 54,919 33,546 21,455
Income taxes 106 (3,299) 25,393 22,365 22,054 6,334
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INCOME (LOSS) BEFORE EXTRAORDINARY ITEM 13,247 (10,389) 22,303 32,554 11,492 15,121
Extraordinary item - Loss from the extinguishment
of debt, net of income taxes
- (13,054) (909) (23,804) (909) (23,804)
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NET INCOME (LOSS) 13,247 (23,443) 21,394 8,750 10,583 (8,683)
Dividends on preferred stock
7,871 8,991 23,679 27,039 33,448 36,063
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BALANCE AVAILABLE FOR COMMON STOCK $5,376 ($32,434) ($2,285) ($18,289) ($22,865) ($44,746)
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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 more more detailed information.
NIAGARA MOHAWK HOLDINGS, INC.
-----------------------------
(Unaudited)
EARNINGS REPORT
---------------
(In thousands of dollars)
Three Months Ended Nine Months Ended Twelve Months Ended
September 30, September 30, September 30,
----------------------- ----------------------- ------------------------
2000 1999 2000 1999 2000 1999
----------------------- ----------------------- ------------------------
Operating Revenues $1,099,604 $1,034,227 $3,339,683 $3,067,682 $4,356,187 $3,971,748
Operating Income 121,114 100,238 382,511 433,240 478,047 533,199
Income (Loss) Before
Extraordinary Item 2,724 (18,653) (1,611) 6,882 (19,777) (19,575)
Extraordinary Item for Loss from
Extinguishment of Debt (Net) -- (13,054) (909) (23,804) (909) (23,804)
Net Income (Loss) $ 2,724 $ (31,707) $ (2,520) $ (16,922) $ (20,686) $ (43,379)
Average Number of Shares of
Common Stock Outstanding
(in thousands) 161,001 187,365 169,782 187,365 173,528 187,365
Basic and Diluted Earnings (Loss)
per Average Share of Common Stock $ 0.02 $ (0.10) $ (0.01) $ 0.04 $ (0.11) $ (0.10)
Extraordinary Item per Average Share
of Common Stock -- (0.07) -- (0.13) (0.01) (0.13)
Basic and Diluted Earnings (Loss) per
Average Share of Common Stock $ 0.02 $ (0.17) $ (0.01) $ (0.09) $ (0.12) $ (0.23)
EBITDA -- -- -- -- $1,180,787 $1,289,167*
Net Cash Interest -- -- -- -- $351,620 $423,371
Ratio of EBITDA to Net Cash Interest -- -- -- -- 3.4 3.0
----------------------- ----------------------- ------------------------
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.
*EBITDA for the 12 months ended September 30, 1999, which had been reported as $1,278,000 has been restated,
reflecting a change in the company's EBITDA calculation methodology.
