April 17, 2001 April 17, 2001
Washington 91-1969407 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.)
ITEM 5. Other Events
On April 17, 2001 the Company issued the following press release.
Bellevue, Wash. (Apr. 17, 2001) - Puget Energy (NYSE: PSD) today reported 2001 first-quarter income for common stock of $70.1 million, or 81 cents per diluted share compared to income for common stock for the first quarter of 2000 of $75.9 million, or 89 cents per diluted share. First-quarter and twelve-month results for 2001 are net of a charge to earnings of 17 cents per diluted share associated with the adoption of Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities” (“SFAS 133”).
Income for common stock for the twelve months ended March 31, 2001 was $179 million, or $2.08 per diluted share, compared to income of $184 million, or $2.17 per diluted share for the same period one year ago.
“Results for the quarter put us on target to meet our operational and financial objectives for 2001,” said William S. Weaver, President and CEO of Puget Energy and Puget Sound Energy. “The constructive settlement with our major industrial customers allowing them access to the markets while preserving the benefit of our energy resources for our core customers was a positive development in the first quarter.”
“Our additional initiatives to manage the demand side of our business and augment our energy supplies - undertaken to deal with the challenging Northwest energy situation - coupled with continued efficient operations of our electric and gas distribution systems are bringing us closer to our objective of being the best distribution company in the country.”
“On the non-regulated front, the acquisition by our utility construction and maintenance subsidiary, InfrastruX, of its third company, InterCon Construction Inc., a Midwest firm with annual revenues of $47 million that provides construction and maintenance services to electric and gas utilities, pipelines and telecommunications companies, continues our progress in building meaningful growth opportunities into Puget Energy,” added Weaver.
Operating revenues for the three-month period were $1.1 billion, up from $647 million for the same period in 2000. Increased revenues reflect increased wholesale and other market-priced electric sales prices and increased natural gas revenues. Increased costs of purchased electricity, fuel for electric generation and purchased natural gas contributed to higher total operating expenses of $989 million, up from $531 million a year ago.
Utility operations and maintenance expenses of $61.2 million, compared to $54.9 million in 2000, increased primarily due to costs related to the Personal Energy Management energy-efficiency program, charges to restore electric service following a February snow storm and costs to repair the Fredonia combustion turbine generating plant, net of estimated insurance recoveries. PSE’s Fredonia turbine went out of service on February 21, 2001 due to mechanical failure. The turbine, which provides 104 megawatts of power to the company, is expected to be back in service on April 21, 2001.
During the first quarter of 2001, the company received partial payments for sales made in the fourth quarter 2000 into the California market, principally to the California Independent System Operator (ISO). At March 31, 2001, the net amount reflected in the financial statements as a receivable from those sales was approximately $26.6 million, down from $41.8 million reported at the end of 2000.
Operating revenues for the 12-month period were $3.9 billion, up from $2.1 billion for the same period in 2000.
Twelve-month revenues and costs for 2001 were affected by the same factors as the quarter, as well as increased volumes of wholesale electric sales.
Utility operations and maintenance expenses for the 12-month period increased over the prior year principally because of increased maintenance costs associated with the utility’s generating resources and the quarterly factors discussed above.
Under SFAS No. 133, which became effective January 1, 2001, Puget Energy is required to mark to market certain of its electric and natural gas sales and purchase contracts (those contracts which have been determined to be derivative financial instruments because of their terms). Derivative contracts that have been classified as cash-flow hedges are marked to market through other comprehensive income (in terms of value, a substantial portion of the company’s contracts affected by SFAS No. 133 meets those criteria). Derivative contracts that do not qualify as cash-flow hedges are required to be marked to market though the income statement.
The first quarter of 2001 financial statements reflect the charge (and related reserve) for adoption of SFAS No. 133 as of January 1, 2001, and for changes since January 1, 2001 in the market value of derivatives outstanding at March 31, 2001. The underlying contracts giving rise to the income statement charges will be fulfilled in 2001 and the reserves established under SFAS No. 133 reversed.
A conference call for analysts to discuss the first quarter results with management is scheduled at 7:00 a.m. PDT, (10 a.m. EDT) Tuesday, April 17, 2001. The call will be broadcast live through a webcast at: www.pse.com.
(In thousands, except per-share amounts)
3 months ended 3/311 12 months ended 3/31
-------------------------------- ----------------------------
2001 20002 2001 20002
------------ ------------- ------------ ------------
Operating revenues
Electric $ 765,007 $ 438,356 $ 3,098,346 $ 1,595,555
Gas 304,270 205,469 711,111 520,114
Other 50,587 3,398 104,856 21,582
------------ ------------- ------------ ------------
Total operating revenues 1,119,864 647,223 3,914,313 2,137,251
------------ ------------- ------------ ------------
Operating expenses
Purchased electricity 390,216 196,203 1,960,638 791,209
Purchased gas 216,609 108,205 441,332 249,958
Electric generation fuel 102,384 20,749 264,613 70,311
Residential exchange (16,741) (12,199) (45,542) (39,515)
Utility operations & maintenance 61,179 54,878 246,424 234,694
Other operations & maintenance 30,140 3,775 86,978 18,474
Depreciation & amortization 53,128 45,885 203,756 178,974
Conservation amortization 1,601 2,619 5,812 8,739
FAS-133 unrealized (gain)/loss 26,466 --- 26,466 ---
Other taxes 70,081 58,485 214,796 188,009
Federal income taxes 54,260 52,738 130,513 111,066
------------ ------------- ------------ ------------
Total operating expenses 989,323 531,338 3,535,786 1,811,919
------------ ------------- ------------ ------------
Operating income 130,541 115,885 378,527 325,332
Other income 1,941 4,390 2,612 25,217
------------ ------------- ------------ ------------
Income before interest charges 132,482 120,275 381,139 350,549
Interest charges 45,435 42,083 178,453 156,545
------------ ------------- ------------ ------------
Net income before cumulative effect of 87,047 78,192 202,686 194,004
accounting change
FAS-133 transition adjustment loss (net of tax) 14,749 --- 14,749 ---
------------ ------------- ------------ ------------
Net Income 72,298 78,192 187,937 194,004
Less preferred stock dividend accruals 2,157 2,303 8,849 10,492
------------ ------------- ------------ ------------
Income for common stock $ 70,141 $ 75,889 $ 179,088 $ 183,512
Common shares outstanding 86,036 85,074 85,654 84,743
------------ ------------- ------------ ------------
Basic earnings per common share before
cumulative effect of accounting change $ 0.99 $ 0.89 $ 2.26 $ 2.17
Cumulative effect of accounting change (0.17) --- (0.17) ---
------------ ------------- ------------ ------------
Basic earnings per common share $ 0.82 $ 0.89 $ 2.09 $ 2.17
Diluted earnings per common share before
cumulative effect of accounting change $ 0.98 $ 0.89 $ 2.25 $ 2.17
Cumulative effect of accounting change (0.17) --- (0.17) ---
------------ ------------- ------------ ------------
Diluted earnings per common share3 $ 0.81 $ $ 2.08 $ 2.17
0.89
1 Partial-year results may not accurately predict full-year performance, as earnings are significantly affected by weather.
2 Certain amounts previously reported have been reclassified to conform with current year presentations with no effect on net income.
3 Diluted earnings per common share include the dilutive effect of securities related to employee compensation plans.
3 months ended 3/31 12 months ended 3/31
------------------------------ -----------------------------------
2001 2000 2001 2000
------------------------------ -----------------------------------
Electricity
Residential $ 202,527 $ 206,417 $ 600,992 $ 610,470
Commercial 151,326 138,004 502,918 480,839
Industrial 147,541 46,532 398,670 177,138
(73,553) (14,781) 71,491 (4,636)
-------------- ------------- --------------- --------------
Subtotal, retail sales 427,841 376,172 1,574,071 1,263,811
Sales to other utilities 337,166 62,184 1,524,277 331,744
-------------- --------------- --------------- ----------------
Total electricity sales 765,007 438,356 3,098,348 1,595,555
Gas
Residential 188,420 129,299 432,021 316,050
Commercial 95,717 59,110 216,810 149,855
Industrial 14,630 10,931 39,859 30,323
Transportation 2,824 3,298 11,663 12,700
Other 2,679 2,831 10,758 11,186
-------------- --------------- --------------- ----------------
Total gas sales 304,270 205,469 711,111 520,114
-------------- --------------- --------------- ----------------
Total energy sales revenues $ 1,069,277 $ 643,825 $ 3,809,459 $ 2,115,669
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Electricity (in mWh)
Residential 3,149,155 3,231,451 9,728,097 9,828,847
Commercial 2,146,684 2,062,967 7,760,749 7,568,275
Industrial 739,208 983,339 3,782,213 3,976,033
Other2 (376,502) (129,833) 91,673 200,939
-------------- ------------- --------------- --------------
Subtotal, retail sales 5,658,545 6,147,924 21,362,732 21,574,094
Sales to other utilities 1,829,605 2,366,158 14,557,178 11,420,223
-------------- ------------- --------------- --------------
-------------- ------------- --------------- ----------------
Total mWh 7,488,150 8,514,082 35,919,910 32,994,317
Gas (in 000's of therms)
Residential 194,463 206,318 505,705 512,052
Commercial 109,000 114,752 299,689 310,426
Industrial 16,956 22,852 61,629 70,273
Transportation 48,969 58,589 194,415 226,208
-------------- ------------- --------------- ----------------
Total gas volumes 369,388 402,511 1,061,438 1,118,959
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Electricity
Residential 820,564 806,413 814,981 800,795
Commercial 99,776 97,981 99,207 97,354
Industrial 4,039 4,167 4,079 4,202
Other 1,657 1,515 1,583 1,507
--------------- --------------
-------------- -------------
Total electricity 926,036 910,076 919,850 903,858
customers
Gas
Residential 544,128 526,328 536,783 515,583
Commercial 46,485 45,304 45,819 44,633
Industrial 2,865 3,034 2,948 3,018
Transportation 112 94 103 99
-------------- ------------- --------------- --------------
Total gas customers 593,590 574,760 585,653 563,333
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Actual heating degree days 1,979 1,999 4,950 4,991
Normal heating degree days 1,975 1,995 4,908 4,928
1 Puget Sound Energy is the electric and natural gas utility subsidiary of Puget Energy.
2 Includes change in unbilled revenues, Conservation Trust collection, Encogen non-energy sales, sales of non-core gas supply to generators and the customer's refunded portion of Centralia gain.
3 Quarterly data represents average served January through March; 12-month data represents average for the year.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
PUGET ENERGY, INC.
Richard L. Hawley
__________________________________Richard L. Hawley
Vice President and Chief Financial Officer
Date: April 17, 2001