Power Notes

July 25, 2002

AGL Resources reports net income up 32 percent in second quarter

AGL Resources Inc. reported a 32 percent increase in second quarter net income compared to the same period in 2001.

Net income in the quarter was $12.3 million, or $0.22 per basic and diluted share, compared with $9.3 million, or $0.17 per basic and diluted share, reported in the second quarter of last year. These results exceeded FirstCall consensus estimates for the quarter of $0.20 per share.

The key drivers of earnings for the quarter were lower operation and maintenance costs and depreciation expense in the distribution operations segment, improved contributions in the energy investments segment from SouthStar Energy Services, and lower corporate interest expense.

For more information, visit www.aglresources.com.


Cinergy reports operating earnings of $0.51 per share before one-time charges


Cinergy Corp. announced operating earnings for the second quarter 2002 of $0.51 per share on a diluted basis, excluding one-time charges totaling $0.25 per share for costs associated with a voluntary early retirement program, a separate employee severance program and charges related to certain investments.

This compares with second quarter earnings of $0.51 per share on a diluted basis in 2001. Reported earnings for the second quarter 2002 including the one-time charges were $0.26 per share on a diluted basis.

The voluntary early retirement and severance programs and related costs resulted in a charge of $0.18 per share with approximately 300 employees accepting the various offerings. A charge of $0.07 per share included a write-off of certain investments in technology and equipment.

Operating earnings before one-time charges from the Regulated Business segment were $0.30 per share, $0.05 per share below last year. Lower gross margins and higher property taxes and depreciation accounted for the decrease.

The Energy Merchant segment’s operating earnings for the quarter excluding the one-time charges were $0.25 per share compared with $0.18 per share for the second quarter last year. Increased gross margins from regulated retail power purchase agreements and wholesale origination, marketing and trading accounted for the majority of the increase.

Results from the Power Technology and Infrastructure Services segment prior to one-time charges were down $0.02 per share from the prior year.


TXU reports strong second quarter results

TXU announced that earnings for the second quarter ended June 30, 2002 were $0.73 per share of common stock versus $0.78 per share for the second quarter of 2001.

Year-to-date earnings were $1.67 per share of common stock compared to $1.55 per share for year-to-date 2001, an increase of eight percent. Before an extraordinary item related to debt extinguishment in the first quarter, earnings for year-to-date 2002 were $1.73 per share, an increase of seven percent over the prior year period earnings of $1.61 per share, excluding unusual restructuring costs in the first quarter of 2001.

The Public Utility Commission of Texas approved the sweeping settlement plan for TXU and two of its wholly owned subsidiaries, TXU Energy and Oncor, resolving all major pending issues related to the company’s transition to competition.

Also, TXU completed the sale of 2,334 megawatts of gas fired electric generating plants in Texas.

Visit http://www.txu.com for more information about TXU.

AEP reports second-quarter ongoing EPS of $0.56

American Electric Power reported 2002 second-quarter ongoing earnings of $181.6 million, or $0.56 per share, in a quarter made difficult largely by declining system sales.

A loss from generation in the United Kingdom – particularly in the latter period of the quarter – and a spillover of natural gas trading losses from the first quarter also contributed to lower-than-forecasted results.

AEP revised its 2002 ongoing earnings guidance to a range of $3.20 to $3.35 per share, in line with the company’s announcement last week that it expected to reduce its previous 2002 ongoing guidance of $3.60 to $3.75 per share in the range of 10 percent. The revision was primarily the result of a major shift in the forward price curve for power and the potential impact on system sales – the sale of wholesale power from AEP plants.

Previously announced charges associated with the divestiture of two foreign retail electricity and gas supply and electricity distribution companies – SEEBOARD in the UK and CitiPower in Australia – account for the difference between ongoing and as-reported earnings in the second quarter and year-to-date results.


Reliant Energy reports lower second quarter 2002 earnings

Reliant Energy Inc. reported net income for the second quarter of 2002 of $0.79 per diluted share compared to net income of $1.08 per diluted share for the second quarter of 2001.

Reliant Energy’s earnings reflect its approximately 83 percent interest in Reliant Resources.

The decrease in net income for the second quarter of 2002 was largely driven by an earnings decline in the company’s wholesale energy segment due to less favorable market conditions, somewhat offset by increases in earnings in the company’s retail energy, European energy and natural gas distribution segments.

Results for the second quarter of 2002 also reflected increased interest expense and a negative impact related to the ZENS securities.

For the six months ended June 30, 2002, Reliant Energy reported income before the cumulative effect of accounting change of $461 million, or $1.55 per diluted share, compared to $517 million, or $1.78 per diluted share, for the same period of 2001. The decrease for this period was largely driven by the factors discussed above.

More information on Reliant Energy can be found on its web site at www.reliantenergy.com .


Reliant Resources reports decline in second-quarter earnings

Reliant Resources Inc. reported earnings of $178 million, or $0.61 per diluted share, for the second quarter of 2002. This compares to reported earnings of $229 million, or $0.82 per diluted share, for second quarter of 2001.

For the six months ended June 30, 2002, the company reported earnings before cumulative effect of accounting charge of $275 million, or $0.95 per diluted share, compared to $307 million, or $1.19 per share, for the first six months of 2001.

The decrease in net income for the quarter-to-quarter comparison was primarily due to weak wholesale market conditions, an increase in a reserve related to potential refunds regarding the company’s California operations, and additional expenses related to plant cancellations and a plant closure.

Partially offsetting the wholesale decline was strong performance in the company’s retail electric operations in Texas, as the market opened for competition in January 2002, and a gain in its European segment related to the amendment of two power contracts.

For the six-month comparison, the decline was primarily due to weaker wholesale market conditions, partially offset by a non-recurring $100 million charge in the first quarter of 2001 relating to the redesign of benefit plans in anticipation of the company’s separation from Reliant Energy, strong performance in the company’s retail energy segment and a gain in its European segment related to the amendment of two power contracts.

For more information, visit our web site at http://www.reliantresources.com.


Conectiv reports second quarter 2002 earnings of $0.45 per common share

Conectiv reported consolidated earnings per Common Share for the three months ended June 30, 2002 from continuing operations of $0.45.

The current period financial results reflect a charge for the impairment of subsidiary leverage lease portfolios and merger related expenses, which reduced earnings per Common Share by $0.12 and $0.01, respectively.

Earnings per Common Share for the second quarter of 2001 were $3.09, which included one-time gains for sales of base load power plants and the redemption of a partnership interest in a cogeneration facility amounting to $2.62 and merger related costs of $0.01 per Common Share.

Excluding these items, earnings were $0.58 per Common Share for the second quarter of 2002, compared with earnings of $0.48 per Common Share for the second quarter of 2001.


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Power Notes

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Dec. 8, 2000—California Independent System Operator officials say they expect to avoid calling a Stage 3 power emergency Friday, after narrowly averting rolling blackouts Thursday.