|
Exact
name of registrant as specified
|
I.R.S.
|
|
in
its charter, state of incorporation,
|
Employer
|
Commission
|
address
of principal executive offices,
|
Identification
|
File
Number
|
Telephone
|
Number
|
1-16305
|
PUGET
ENERGY, INC.
|
91-1969407
|
|
A
Washington Corporation
|
|
|
10885
- N.E. 4th Street, Suite 1200
|
|
|
Bellevue,
Washington 98004-5591
|
|
|
(425)
454-6363
|
|
1-4393
|
PUGET
SOUND ENERGY, INC.
|
91-0374630
|
|
A
Washington Corporation
|
|
|
10885
- N.E. 4th Street, Suite 1200
|
|
|
Bellevue,
Washington 98004-5591
|
|
|
(425)
454-6363
|
|
o
|
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
|
o
|
Soliciting
material pursuant to Rule 14a−12 under the Exchange Act (17 CFR
240.14a−12)
|
o
|
Pre−commencement
communications pursuant to Rule 14d−2(b) under the Exchange Act
(17 CFR 240.14d−2(b))
|
o
|
Pre−commencement
communications pursuant to Rule 13e−4(c) under the Exchange Act
(17 CFR 240.13e−4(c))
|
· | Reports income of 46 cents per diluted share including 28 cents from InfrastruX Group (InfrastruX) discontinued operations |
· | Reports income of 26 cents per diluted share from Puget Sound Energy (PSE), Puget Energy’s core utility business |
· | Reaffirms full-year 2006 earnings guidance of $1.40 to $1.55 per share from PSE |
Table
1: Puget Energy reported earnings
|
|||||||
Second
Quarter
|
|||||||
Net
Income (Loss) in millions of dollars
|
2006
|
2005
|
|||||
Continuing
Operations - PSE
|
$
|
30.1
|
$
|
12.2
|
|||
Continuing
Operations - Charitable Foundation Funding
|
(9.8
|
)
|
--
|
||||
Continuing
Operations - Other
|
0.2
|
(0.2
|
)
|
||||
Continuing
Operations
|
20.5
|
12.0
|
|||||
Discontinued
Operations (InfrastruX)
|
33.0
|
1.9
|
|||||
Puget
Energy
|
$
|
53.5
|
$
|
13.9
|
|||
Earnings
per Fully Diluted Share
|
|||||||
Continuing
Operations - PSE
|
$
|
0.26
|
$
|
0.12
|
|||
Continuing
Operations - Charitable Foundation Funding
|
(0.08
|
)
|
--
|
||||
Continuing
Operations
|
0.18
|
0.12
|
|||||
Discontinued
Operations (InfrastruX)
|
0.28
|
0.02
|
|||||
Puget
Energy
|
$
|
0.46
|
$
|
0.14
|
|||
Fully
diluted common shares outstanding (millions)
|
116.4
|
100.7
|
Table
2: Second quarter 2006 vs. second quarter 2005
EPS
reconciliation for Continuing Operations
|
Cents
per
diluted
share
|
|||
Puget
Energy’s 2005 earnings from PSE
|
$
|
0.12
|
||
Increase
in electric margin
|
0.14
|
|||
Increase
in gas margin
|
0.04
|
|||
Increase
in depreciation and amortization expense
|
(0.03
|
)
|
||
Increase
in other items, net
|
0.03
|
|||
Impact
of dilution from higher common shares outstanding
|
(0.04
|
)
|
||
Puget
Energy 2006 earnings from PSE
|
$
|
0.26
|
||
Charitable
foundation establishment and funding
|
(0.08
|
)
|
||
Puget
Energy's 2006 earnings from continuing operations
|
$
|
0.18
|
· |
PSE’s
second quarter 2006 net income increased by $17.9 million to $30.1
million
from $12.2 million in the second quarter 2005.
|
· |
As
of June 30, 2006, PSE provided service to 1,023,800 electric customers
and
702,500 natural gas customers in Washington, representing a 1.3 percent
and 3.0 percent increase, respectively, in the last 12
months.
|
· |
PSE's
retail sales volumes of electricity and natural gas increased in
the
second quarter as compared to the same period a year ago by 3.4 percent
and 5.1 percent, respectively.
|
· |
PSE’s
electric margin increased by $25.8 million in the second quarter
of 2006,
primarily due to favorable hydroelectric conditions and an increase
in
retail sales volumes. PSE’s electric margin represents electric sales, net
of revenue based taxes, to retail and transportation customers less
the
cost of generating, purchasing and wheeling electricity.
|
· |
PSE’s
natural gas margin increased by $7.2 million in the second quarter
of
2006. PSE's second quarter 2005 gas margin was adversely impacted
by a
one-time true-up of previously reported gas costs resulting in a
$5
million decrease in gas margin and a $3.3 million after-tax charge
to net
income. Gas margin represents natural gas sales to retail and
transportation customers, net of revenue based taxes, less the cost
of
purchasing and transporting natural gas.
|
· |
PSE’s
depreciation and amortization expense increased by $4.9 million in
the
second quarter of 2006 due to additional utility plants placed in
service
during the last twelve months, including $2.2 million related to
the
150-megawatt Hopkins Ridge wind-powered electric generating facility
in
Columbia County, Wash. that became operational in November 2005.
|
· |
The
average number of Puget Energy fully diluted common shares outstanding
in
the second quarter 2006 increased to 116.4 million compared to 100.7
million during the same period in 2005. The increase was primarily
the
result of a secondary offering of 15 million shares completed in
November
2005. The impact of dilution as a result of the higher shares outstanding
resulted in an earnings per share reduction of 4 cents per share
in the
second quarter 2006.
|
PUGET
ENERGY -- SUMMARY INCOME STATEMENT
|
|||||||||||||
(In
thousands,
except per-share amounts)
|
|||||||||||||
Unaudited
|
Unaudited
|
||||||||||||
Three
months ended 6/301
|
Six
months ended 6/301
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
Operating
revenues
|
|||||||||||||
Electric
|
$
|
380,980
|
$
|
345,420
|
$
|
848,403
|
$
|
765,511
|
|||||
Gas
|
192,457
|
162,567
|
599,044
|
483,695
|
|||||||||
Other
|
787
|
2,127
|
4,510
|
2,561
|
|||||||||
Total
operating revenues
|
574,224
|
510,114
|
1,451,957
|
1,251,767
|
|||||||||
Operating
expenses
|
|||||||||||||
Purchased
electricity
|
187,945
|
178,943
|
440,070
|
387,122
|
|||||||||
Electric
generation fuel
|
14,292
|
12,894
|
35,876
|
33,342
|
|||||||||
Residential
exchange
|
(38,670
|
)
|
(37,105
|
)
|
(95,303
|
)
|
(92,151
|
)
|
|||||
Purchased
gas
|
118,362
|
98,142
|
385,041
|
299,887
|
|||||||||
Unrealized
net
(gain) on derivative instruments
|
(150
|
)
|
(591
|
)
|
825
|
(82
|
)
|
||||||
Utility
operations & maintenance
|
83,598
|
83,132
|
170,961
|
158,654
|
|||||||||
Other
operations & maintenance
|
689
|
558
|
1,544
|
1,299
|
|||||||||
Depreciation
& amortization
|
64,545
|
59,657
|
128,429
|
117,734
|
|||||||||
Conservation
amortization
|
7,462
|
5,951
|
15,510
|
11,113
|
|||||||||
Taxes
other
than income taxes
|
54,178
|
50,521
|
133,910
|
120,221
|
|||||||||
Income
taxes
|
15,433
|
6,093
|
55,778
|
52,175
|
|||||||||
Total
operating expenses
|
507,684
|
458,195
|
1,272,641
|
1,089,314
|
|||||||||
Operating
income
|
66,540
|
51,919
|
179,316
|
162,453
|
|||||||||
Other
income (deductions):
|
|||||||||||||
Charitable foundation funding | (15,000 | ) | -- | (15,000 | ) | -- | |||||||
Other
income
|
5,916
|
|
1,890
|
8,240
|
|
3,721
|
|||||||
Income taxes | 4,532 | (292 | ) | 4,547 | (959 | ) | |||||||
Interest
Charges:
|
|||||||||||||
AFUDC
|
3,027
|
2,041
|
5,049
|
3,503
|
|||||||||
Interest
expense
|
(44,417
|
)
|
(43,568
|
)
|
(87,959
|
)
|
(84,611
|
)
|
|||||
Mandatorily
redeemable securities interest expense
|
(23
|
)
|
(23
|
)
|
(45
|
)
|
(45
|
)
|
|||||
Net
income from continuing operations3
|
20,575
|
11,967
|
94,148
|
84,062
|
|||||||||
Income
from
discontinued operations, net of tax
|
32,954
|
1,928
|
51,901
|
909
|
|||||||||
Net
income before cumulative effect of
|
|||||||||||||
accounting
change
|
53,529
|
13,895
|
146,049
|
84,971
|
|||||||||
Cumulative
effect of accounting change
|
--
|
--
|
(89
|
)
|
--
|
||||||||
Net
Income
|
$
|
53,529
|
$
|
13,895
|
$
|
146,138
|
$
|
84,971
|
|||||
Common
shares outstanding
|
115,907
|
100,157
|
115,817
|
100,058
|
|||||||||
Diluted
shares outstanding
|
116,405
|
100,690
|
116,266
|
100,590
|
|||||||||
Basic
earnings
per common share before cumulative effect
|
|||||||||||||
of
accounting
change from continuing operations
|
$
|
0.18
|
$
|
0.12
|
$
|
0.81
|
$
|
0.84
|
|||||
Basic
earnings
from discontinued operations
|
0.28
|
0.02
|
0.45
|
0.01
|
|||||||||
Cumulative
effect from accounting change
|
--
|
--
|
--
|
--
|
|||||||||
Basic
earnings per common share
|
$
|
0.46
|
$
|
0.14
|
$
|
1.26
|
$
|
0.85
|
|||||
Diluted
earnings per common share before cumulative effect
|
|||||||||||||
of
accounting
change from continuing operations3
|
$
|
0.18
|
$
|
0.12
|
$
|
0.81
|
$
|
0.83
|
|||||
Diluted
earnings from discontinued operations
|
0.28
|
0.02
|
0.45
|
0.01
|
|||||||||
Cumulative
effect from accounting change
|
--
|
--
|
--
|
--
|
|||||||||
Diluted
earnings per common
share2
|
$
|
0.46
|
$
|
0.14
|
$
|
1.26
|
$
|
0.84
|
|||||
1 | Partial-year results may not accurately predict full-year performance, as earnings are significantly affected by weather. |
2 | Diluted earnings per common share include the dilutive effect of securities related to employee compensation plans. |
3 | Net Income from Continuing Operations was $30,325, or $.26 per diluted earnings per common share, in the second quarter of 2006 excluding the impact of Puget Energy charitable foundation funding of $15 million ($9.75 million net of taxes). |
PUGET
SOUND ENERGY -- UTILITY OPERATING DATA
|
|||||||||||||
Three
months ended 6/30
|
Six
months ended 6/30
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
||||||||||
Energy
sales revenues ($ in thousands;
unaudited)
|
|||||||||||||
Electricity
|
|||||||||||||
Residential
|
$
|
167,174
|
$
|
152,959
|
$
|
409,108
|
$
|
364,799
|
|||||
Commercial
|
159,489
|
150,043
|
342,252
|
307,935
|
|||||||||
Industrial
|
24,189
|
23,156
|
50,466
|
45,235
|
|||||||||
Other
retail
sales, including change in unbilled
|
(5,639
|
)
|
(9,627
|
)
|
(21,404
|
)
|
(14,394
|
)
|
|||||
Subtotal,
retail sales
|
345,213
|
316,531
|
780,422
|
703,575
|
|||||||||
Transportation,
including change in unbilled
|
2,664
|
2,419
|
5,375
|
5,087
|
|||||||||
Sales
to other
utilities & marketers
|
16,751
|
16,870
|
32,554
|
33,191
|
|||||||||
Other1
|
16,352
|
9,600
|
30,052
|
23,658
|
|||||||||
Total
electricity sales
|
380,980
|
345,420
|
848,403
|
765,511
|
|||||||||
Gas
|
|||||||||||||
Residential
|
110,016
|
94,744
|
375,108
|
303,400
|
|||||||||
Commercial
|
62,416
|
50,378
|
179,224
|
141,626
|
|||||||||
Industrial
|
12,589
|
10,033
|
29,403
|
23,026
|
|||||||||
Subtotal,
retail sales
|
185,021
|
155,155
|
583,735
|
468,052
|
|||||||||
Transportation
|
3,100
|
3,215
|
6,714
|
6,612
|
|||||||||
Other
|
4,336
|
4,197
|
8,595
|
9,031
|
|||||||||
Total
gas
sales
|
192,457
|
162,567
|
599,044
|
483,695
|
|||||||||
Total
energy sales revenues
|
$
|
573,437
|
$
|
507,987
|
$
|
1,447,447
|
$
|
1,249,206
|
|||||
Energy
sales volumes (unaudited)
|
|||||||||||||
Electricity
(in mWh)
|
|||||||||||||
Residential
|
2,374,816
|
2,277,739
|
5,802,784
|
5,558,632
|
|||||||||
Commercial
|
2,121,333
|
2,082,005
|
4,460,808
|
4,263,613
|
|||||||||
Industrial
|
338,371
|
337,971
|
684,194
|
662,140
|
|||||||||
Other,
including change in unbilled
|
(105,919
|
)
|
(124,652
|
)
|
(342,223
|
)
|
(280,994
|
)
|
|||||
Subtotal,
retail sales
|
4,728,601
|
4,573,063
|
10,605,563
|
10,203,391
|
|||||||||
Transportation,
including change in unbilled
|
525,991
|
477,906
|
1,052,411
|
999,931
|
|||||||||
Sales
to other
utilities & marketers
|
786,058
|
447,150
|
1,105,965
|
792,934
|
|||||||||
Total
mWh
|
6,040,650
|
5,498,119
|
12,763,939
|
11,996,256
|
|||||||||
Gas
(in
000's of therms)
|
|||||||||||||
Residential
|
82,812
|
79,991
|
298,489
|
279,042
|
|||||||||
Commercial
|
54,968
|
51,220
|
160,717
|
146,461
|
|||||||||
Industrial
|
11,938
|
10,934
|
27,567
|
24,845
|
|||||||||
Transportation
|
50,630
|
48,438
|
105,458
|
101,563
|
|||||||||
Total
gas
volumes
|
200,348
|
190,583
|
592,231
|
551,911
|
|||||||||
Margins2
($ in thousands; unaudited)
|
|||||||||||||
Electric
|
$
|
177,041
|
$
|
151,269
|
$
|
382,942
|
$
|
352,788
|
|||||
Gas
|
52,789
|
45,561
|
153,096
|
133,178
|
|||||||||
Weather
(unaudited)
|
|||||||||||||
Actual
heating
degree days
|
779
|
788
|
2,546
|
2,599
|
|||||||||
Normal
heating
degree days3
|
888
|
888
|
2,830
|
2,830
|
|||||||||
Customers
served at June 304
(unaudited)
|
|||||||||||||
Electricity
|
|||||||||||||
Residential
|
908,629
|
892,719
|
|||||||||||
Commercial
|
109,048
|
111,937
|
|||||||||||
Industrial
|
3,586
|
3,910
|
|||||||||||
Other
|
2,549
|
2,436
|
|||||||||||
Transportation
|
17
|
17
|
|||||||||||
Total
electricity customers
|
1,023,829
|
1,011,019
|
|||||||||||
Gas
|
|||||||||||||
Residential
|
648,542
|
628,782
|
|||||||||||
Commercial
|
51,233
|
50,644
|
|||||||||||
Industrial
|
2,629
|
2,687
|
|||||||||||
Transportation
|
121
|
130
|
|||||||||||
Total
gas
customers
|
702,525
|
682,243
|
1 | Includes sales of non-core gas supplies. |
2 | Electric margin is electric sales to retail and transportation customers less the cost of generating and purchasing electric energy sold to customers, including transmission costs, to bring elecric energy to PSE's service territory. Gas margin is gas sales to retail and transportation customers less the cost of gas purchased, including gas transportation costs, to bring gas to PSE's service territory. |
3 | Seattle-Tacoma Airport statistics reported by NOAA which are based on a 30-year average, 1971-2000. Heating degree days measure how far the daily average temperature falls below 65 degrees. |
4 | Customers represents average served at month end. |
|
PUGET
ENERGY, INC.
|
|
|
|
|
PUGET
SOUND ENERGY, INC.
|
|
|
|
|
|
|
By:
/s/ Bertrand A. Valdman
|
|
Dated:
August 3, 2006
|
Bertrand
A. Valdman
Senior
Vice President Finance and
Chief
Financial Officer
|
|