1 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 (Date of earliest event reported): JANUARY 26, 2001 ---------- RELIANT ENERGY, INCORPORATED (Exact name of registrant as specified in its charter) TEXAS 1-3187 74-0694415 (State or other jurisdiction (Commission File Number) (IRS Employer of incorporation) Identification No.) 1111 LOUISIANA HOUSTON, TEXAS 77002 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (713) 207-3000 ---------- RELIANT ENERGY RESOURCES CORP. (Exact name of registrant as specified in its charter) DELAWARE 1-13265 76-0511406 (State or other jurisdiction (Commission File Number) (IRS Employer of incorporation) Identification No.) 1111 LOUISIANA HOUSTON, TEXAS 77002 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (713) 207-3000 ----------
2 This combined current report on Form 8-K is separately filed by Reliant Energy, Incorporated (Reliant Energy) and Reliant Energy Resources Corp. (RERC). Information contained herein under "Natural Gas Distribution" and "Pipelines and Gathering" and relating to natural gas and wholesale power sales under "Wholesale Energy", which information relates to RERC, is filed by Reliant Energy and separately by RERC on its own behalf. RERC makes no representation as to information relating to Reliant Energy (except as it may relate to RERC) and its subsidiaries, or any other affiliate of Reliant Energy. References herein to the businesses and operations of Reliant Energy include the businesses and operations of Reliant Energy's subsidiaries, including RERC. ITEM 9. REGULATION FD DISCLOSURE. RELIANT ENERGY'S EARNINGS Reliant Energy reported adjusted earnings for the year 2000 of $838 million, or $2.94 per basic share. This compares to $508 million, or $1.78 per basic share, for 1999. Strong performance from the company's unregulated wholesale energy businesses, increased customer demand in its regulated electric service territory and decreased depreciation and amortization expense from electric operations were the primary reasons for the substantial rise in adjusted earnings. Adjusted earnings for the fourth quarter of 2000 were $73 million, or $0.25 per basic share, compared to $73 million, or $0.26 per basic share, for the same period of 1999. Strong performance from the company's unregulated domestic wholesale energy operations and its electric operations segment, due to increased customer growth and electricity usage as well as decreased depreciation expense were offset by increases in expenses related to the preparation for retail competition in Texas and in the company's communications and eBusiness operations. In addition, the company recorded reserves, which include a $39 million provision taken against receivable balances related to energy sales in California. As of December 1, 2000, Reliant Energy began reporting the results of the Reliant Energy Latin America segment as discontinued operations. All financial information related to this segment is reported as discontinued operations on a comparative basis. Reliant Energy has moved the financial results of its gathering operations (Reliant Energy Field Services, Inc.) from the wholesale energy segment to the pipelines and gathering segment. In addition, the financial results of its unregulated retail marketing of natural gas have been moved from the other operations segment to the natural gas distribution segment. These movements were made to more closely align financial results to the management of these businesses. The following table identifies the differences between reported earnings and adjusted earnings mentioned above.
3 2000 RESULTS* (MILLIONS OF DOLLARS, EXCEPT PER SHARE AMOUNTS) Quarter Ended Year Ended December 31, December 31, ----------------------- ----------------------- EARNINGS 2000 1999 2000 1999 ---------- ---------- ---------- ---------- Net (loss) income, as reported $ (299) $ (73) $ 447 $ 1,482 --------- --------- --------- --------- Loss (earnings) from discontinued operations 146 (37) 172 9 --------- --------- --------- --------- Loss on disposal of discontinued operations 159 -- 159 -- --------- --------- --------- --------- Net unrealized loss (gain) on indexed debt securities & Time Warner investment 67 -- 67 (1,166) --------- --------- --------- --------- Extraordinary loss (gain) -- 183 (7) 183 --------- --------- --------- --------- Adjusted Earnings $ 73 $ 73 $ 838 $ 508 --------- --------- --------- --------- EARNINGS PER BASIC SHARE --------- --------- --------- --------- (Loss) income per basic share, as reported $ (1.04) $ (.26) $ 1.57 $ 5.20 --------- --------- --------- --------- Loss (earnings) from discontinued operations .51 (.13) .61 .03 --------- --------- --------- --------- Loss on disposal of discontinued operations .55 -- .56 -- --------- --------- --------- --------- Net unrealized loss (gain) on indexed debt securities & Time Warner investment .23 -- .23 (4.09) --------- --------- --------- --------- Extraordinary loss (gain) -- .65 (.03) .64 --------- --------- --------- --------- Basic EPS, adjusted $ .25 $ .26 $ 2.94 $ 1.78 --------- --------- --------- --------- Weighted average basic shares (000)** 286,088 284,427 284,652 285,040 --------- --------- --------- --------- * Immaterial rounding differences exist in this summarized schedule. ** On December 31, 2000, Reliant Energy had 286,464,709 shares of common stock outstanding for financial reporting purposes. 2
4 OPERATING INCOME (LOSS) BY SEGMENT Three Months Ended Year Ended (In millions) December 31, December 31, 2000 1999 2000 1999 -------- -------- -------- -------- Electric Operations $ 203 $ 144 $ 1,230 $ 981 Wholesale Energy 16 (14) 482 27 Natural Gas Distribution 64 57 113 158 Pipelines and Gathering 38 35 137 131 European Energy 17 32 89 32 Other Operations (90) (16) (172) (71) ------- ------- ------- ------- Total Operating Income $ 248 $ 238 $ 1,879 $ 1,258 ======= ======= ======= ======= ELECTRIC OPERATIONS Operations Data Three Months Ended Year Ended GWh Sales December 31, December 31, ------------------ Percent ------------------ Percent 2000 1999 Change 2000 1999 Change ------ ------ ------- ------ ------ ------- Residential 4,760 4,250 12% 22,727 21,144 7% Commercial 4,069 3,826 6% 17,594 16,616 6% Industrial - Firm 6,574 6,436 2% 27,707 26,020 6% Industrial - Interruptible 1,309 1,040 26% 5,542 5,460 2% Other (1) 318 662 (52%) 1,724 2,884 (40%) ------ ------ ------ ------ Total 17,030 16,214 5% 75,294 72,124 4% ====== ====== ====== ====== (1) Includes municipals, public utilities, off-system and ancillary services sales. Reliant Energy HL&P's operating income increased 25% for the year ended December 31, 2000 compared to the same period in 1999. The increase of $249 million was primarily attributed to a decrease in depreciation and amortization expense ($160 million), strong non-fuel revenue growth ($132 million) and a favorable weather comparison ($45 million). These were partially offset by additional transmission cost of service ($31 million), increased operations and maintenance expenses ($22 million) and increased other taxes ($32 million). The increase in other taxes included an assessment for the System Benefit Fund (partially offset by a decrease in property taxes) and increased franchise taxes and fees. The System Benefit Fund was established by the Texas electric deregulation law (Senate Bill 7) to provide funding for (a) programs to assist low-income electric customers, (b) customer education, and (c) school funding loss mechanism. Reliant Energy HL&P amortized $329 million of the impairment of its electric plant during 2000. For the year, weather 3
5 margin was favorable compared to normal ($85 million). During 2000, Reliant Energy HL&P added over 44,000 new customers (2.6%). Reliant Energy HL&P's operating income for the fourth quarter of 2000 was $203 million compared to $144 million for the same period in 1999. The increase was due to continued strong non-fuel revenue growth ($30 million), a favorable weather comparison ($19 million) and a decrease in depreciation expense ($39 million). The operating income increase was partially offset by an increase in other taxes ($14 million), which included an assessment for the System Benefit Fund (partially offset by a decrease in property taxes), increased franchise fees, and increased operations and maintenance expenses ($5 million). Reliant Energy HL&P amortized $47 million of the impairment of its electric plant during the fourth quarter of 2000. Weather margin during the quarter was favorable compared to normal ($12 million). WHOLESALE ENERGY Operations Data Three Months Ended Year Ended December 31, December 31, ------------------ Percent ------------------- Percent 2000 1999 Change 2000 1999 Change ------ ------ ------- ------- ------- ------- Natural Gas Sales Volumes (Bcf) 740 503 47% 2,509 1,820 38% Wholesale Power Sales (GWh) 63,383 32,697 94% 181,088 104,916 73% Unregulated Power Generation: Capacity and Energy Sales (GWh) 6,401 2,576 148% 21,789 8,527 156% The wholesale energy segment includes domestic and Canadian trading and marketing of natural gas, electric power and other commodities to wholesale markets by Reliant Energy Services, Inc. and the domestic unregulated portion of power generation by Reliant Energy Power Generation, Inc. Please note that the gathering of natural gas from the wellhead by Reliant Energy Field Services, Inc. has been reclassified into the pipelines and gathering segment for all reported periods. Operating income was $482 million for the year ended December 31, 2000 compared to $27 million in 1999. The group also reported equity income, which is included in other income, of $43 million for 2000, compared to an equity loss of $1 million in 1999. Additional operations in the Mid-Atlantic, Mid-Continent and Southwest regions, as well as higher energy sales and prices contributed to the increase over 1999. These were partially offset by higher general and administrative expenses to support generation and commercial activities, increased development costs, and reserves which include a $39 million provision taken against receivable balances related to energy sales in California. 4
6 The company's wholesale energy group reported an increase of $30 million in fourth quarter operating income and $10 million in fourth quarter equity income from the same period in 1999, primarily due to the same factors described above. NATURAL GAS DISTRIBUTION Operation Data in Bcf Three Months Ended Year Ended December 31, December 31, ------------------ Percent ------------------ Percent 2000 1999 Change 2000 1999 Change ------ ------ ------- ------ ------ ------- Residential & Commercial Sales 118.3 86.3 37% 318.1 285.9 11% Industrial Sales 17.1 12.9 33% 54.9 52.8 4% Transportation 12.7 13.0 (2%) 50.3 46.9 7% Retail 101.0 100.0 1% 431.0 400.0 8% ------ ------ ------ ------ Total Throughput 249.1 212.2 17% 854.3 785.6 9% ====== ====== ====== ====== Three Months Ended Year Ended December 31, December 31, ------------------ Percent ------------------ Percent 2000 1999 Change 2000 1999 Change ------ ------ ------- ------- ------- ------- Heating Degree Days Actual 5,597 3,439 63% 11,879 10,360 15% Normal 4,680 4,710 (1%) 12,258 12,372 (1%) Percent Change to Normal 20% (27%) (3%) (16%) Please note that the natural gas distribution segment includes the company's unregulated retail marketing of natural gas for all reported periods. Operating income for the year ended December 31, 2000 declined to $113 million compared to $158 million in 1999. The decline is due to increases in operating expenses including additional provisions against receivable balances, benefit expenses and severance/relocation costs. In addition, costs associated with exiting certain retail gas markets were moved into this segment's results. The natural gas distribution segment reported operating income of $64 million for the fourth quarter of 2000. This compares to operating income of $57 million for the same period in 1999. The primary reason for the increase was increased weather margin ($25 million), offset by increased provisions against receivable balances on a comparative basis and increased benefit expenses and severance/relocation costs. 5
7 PIPELINES AND GATHERING Operations Data (Bcf) Three Months Ended Year Ended December 31, December 31, ------------------ Percent ------------------ Percent 2000 1999 Change 2000 1999 Change ------ ------ ------- ------- ------- ------- Pipelines 192.2 198.7 (3%) 846.6 836.5 1% Gathering 75.8 71.9 5% 288.7 269.5 7% ------ ------ ------- ------- Total Throughput 268.0 270.6 (1%) 1,135.3 1,106.0 3% ====== ====== ======= ======= Please note that the pipelines and gathering segment includes natural gas gathering from the wellhead activities of Reliant Energy Field Services, Inc. for all reported periods. Operating income from the pipelines and gathering segment was $137 million for the year ended December 31, 2000 compared to $131 million for the same period in 1999. Operating income for the fourth quarter of 2000 was $38 million compared to $35 million for the fourth quarter of 1999. EUROPEAN ENERGY The European Energy segment reported operating income of $89 million for the year ended December 31, 2000. The company established this segment in the fourth quarter of 1999. Included in the 2000 results are various one time expenses associated with the dissolution of SEP and the restructuring of the Dutch market, increased expenses associated with building the trading and marketing infrastructure in Europe and foreign exchange rate losses. SEP, the Electricity Governing Board, is owned by the four generation companies. Operating income for the fourth quarter of 2000 was $17 million compared to $32 million for the same period of 1999. The decline is primarily attributable to increased expenses associated with building the trading and marketing infrastructure in Europe and foreign exchange rate losses. The company's marketing activities in Europe have resulted in forward power sales totaling approximately 15.5 Twh which was greater than the planned level of 13.5 Twh for 2001. The previously announced sale of TenneT BV (the owner of the Dutch high voltage electricity grid) is expected to close in 2001. 6
8 RELIANT ENERGY LATIN AMERICA--DISCONTINUED OPERATIONS As of December 1, 2000, Reliant Energy began reporting the results of the Reliant Energy Latin America segment as discontinued operations. By the end of 2000 the company closed on the sale of its investments in El Salvador, Brazil, and Colombia. The net after-tax cash proceeds from these sales were approximately $790 million. Negotiations for the sale of the company's remaining Latin America interests are progressing, and these transactions are expected to be complete in 2001. The remaining interests include a cogeneration facility and a small distribution company, both in Argentina, and a coke calcining plant in India. The aggregate book value of these interests is approximately $160 million. OTHER OPERATIONS Reliant Energy's other operations segment includes its unregulated retail electric operations, its communications business, its eBusiness group and corporate costs. For the year ended December 31, 2000, operating losses for the other operations segment totaled $172 million compared to an operating loss of $71 million for 1999. This was primarily due to increased expenses incurred in preparing for retail competition in Texas beginning January 2002, eBusiness and communications expenses. In addition, the company made a contribution to a charitable foundation and incurred expenses associated with the acquisition of naming rights for Houston's new football stadium and the sports, entertainment and convention complex formerly known as the Astrodomain Complex. The other operations segment had an operating loss of $90 million for the fourth quarter of 2000 compared to an operating loss of $16 million for the same period last year. The factors affecting the decline are the same as those mentioned above for the year. This current report includes forward-looking statements, estimates and projections. Actual events and results may differ materially from those projected. Factors that could affect actual results include future regulatory and legislative decisions, weather, risks associated with international operations, the timetable for closing announced acquisitions, the success in integrating acquired operations, changes in Reliant Energy's business plans and other factors discussed in the company's other filings with the Securities and Exchange Commission. 7
9 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits. The following exhibits are filed herewith: 99.1 Press Release issued January 26, 2001 8
10 SIGNATURE 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. RELIANT ENERGY, INCORPORATED Date: January 26, 2001 By: /s/ MARY P. RICCIARDELLO ------------------------------ Mary P. Ricciardello Senior Vice President and Chief Accounting Officer
11 SIGNATURE 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. RELIANT ENERGY RESOURCES CORP. Date: January 26, 2001 By: /s/ MARY P. RICCIARDELLO ------------------------------ Mary P. Ricciardello Senior Vice President
12 EXHIBIT INDEX EXHIBIT NUMBER DESCRIPTION - ------ ----------- 99.1 Press Release issued January 26, 2001
1 EXHIBIT 99.1 FOR FURTHER INFORMATION: SANDY FRUHMAN MEDIA (713) 207-3123 RANDY BURKHALTER INVESTORS (713) 207-3115 FOR IMMEDIATE RELEASE: JANUARY 26, 2001 RELIANT ENERGY'S WHOLESALE ENERGY BUSINESSES AND ELECTRIC OPERATIONS DROVE EARNINGS UP 65 PERCENT FOR THE YEAR 2000 HOUSTON, TX - Reliant Energy today reported adjusted earnings for 2000 of $838 million, or $2.94 per basic share, compared to $508 million, or $1.78 per basic share, for 1999. Strong performance from the company's unregulated wholesale energy businesses and increased customer demand in its regulated electric service territory resulted in a substantial rise in earnings. Adjusted earnings for both years exclude the results of the company's investments in Latin America, which are classified as discontinued operations. Adjusted earnings for the fourth quarter of 2000 were $73 million, or $0.25 per basic share, compared to $73 million, or $0.26 per basic share, for the same period of 1999. "We are proud of what we have achieved over the past year," said Steve Letbetter, chairman, president and chief executive officer. "Reliant Energy has made substantial strides in executing its growth strategies in recent years. Our substantial earnings growth demonstrates our financial strength, market intelligence and disciplined approach to commercial asset management. "The company performed well across all of its business segments during the past year, with the competitive wholesale energy business showing significant growth. Our track record of
2 strong performance reflects our commitment to continually increase shareholder value," said Letbetter. SELECTED OPERATING INCOME DETAILED ELECTRIC OPERATIONS For the year 2000, Reliant Energy HL&P generated operating income of $1.23 billion, up from $981 million for 1999. Increased customer demand, favorable weather comparisons and lower depreciation and amortization expense were the primary reasons for the 25 percent rise in operating income. Reliant Energy HL&P's operating income for the fourth quarter of 2000 rose 41 percent to $203 million, compared to $144 million, for the same period last year. The increase was largely due to the same reasons described above. Kilowatt-hour sales for the fourth quarter increased approximately 5 percent over the same quarter of 1999, and 4 percent for the year 2000. In addition, Reliant Energy HL&P added over 44,000 customers in its service territory during 2000. WHOLESALE ENERGY Reliant Energy's wholesale energy group, which includes unregulated power generation and energy trading and marketing activities in North America, produced operating income of $482 million in 2000, compared to $27 million in 1999. The group also reported equity income, which is included in other income, of $43 million for 2000, compared to an equity loss of $1 million in 1999. Additional operations in the Mid-Atlantic, Mid-Continent and Southwest regions, as well as higher energy sales and prices contributed to the substantial increase over
3 1999. These were partially offset by higher general and administrative expenses to support generation and commercial activities, increased generation development costs, and reserves which include a $39 million provision taken against receivable balances related to energy sales in California. The company's wholesale energy group reported an increase of $30 million in fourth-quarter operating income and $10 million in fourth-quarter equity income from the same period in 1999, primarily due to the same factors described above. NATURAL GAS DISTRIBUTION Reliant Energy's natural gas distribution companies reported operating income of $113 million for 2000, compared to $158 million for 1999. Higher operating expenses during 2000, mainly related to costs associated with exiting certain retail gas markets, provisions against receivable balances and benefit expenses, contributed to the decline. For the fourth quarter of 2000, the gas distribution companies generated operating income of $64 million, up from $57 million for the same period of 1999. Improved gas margins, largely due to colder weather, contributed to the increase in the fourth quarter. PIPELINES AND GATHERING The company's pipelines and gathering segment contributed operating income of $137 million in 2000, up from $131 million the prior year, and $38 million for the fourth quarter of 2000, compared to $35 million for the same period of 1999. The increase for both reporting periods was primarily due to increased gas gathering and processing revenues.
4 EUROPEAN ENERGY The European energy segment contributed operating income of $89 million for the year. The company established its European presence in the fourth quarter of 1999, with the acquisition of UNA N.V., a Dutch power generation company. The European energy segment produced $17 million of operating income for the fourth quarter of 2000, compared to $32 million in the same period last year. The decline was largely due to foreign exchange rate differences and trading and marketing start-up costs. OTHER OPERATIONS Reliant Energy's other operations segment, which includes its unregulated retail electric operations, its communications business, its eBusiness group and corporate costs, reported an operating loss of $172 million for 2000, compared to a loss of $71 million for 1999. The decline resulted primarily from increased expenses incurred in preparing to enter the deregulated Texas electric retail market, increased communications start-up costs and information technology costs. For the fourth quarter of 2000, the company's other operations segment had an operating loss of $90 million. This compares to an operating loss of $16 million for the same period of 1999. The factors affecting the decline are the same as those mentioned above for the year. DISCONTINUED OPERATIONS By the end of 2000, the company's Latin American segment had sold its investments in El Salvador, Brazil and Colombia for approximately $790 million in after-tax proceeds. Its remaining investments include a wholly owned cogeneration facility and an electric distribution company in Argentina, as well as a coke calcining plant in India. Reliant Energy is engaged in
5 negotiations for the sale of these investments and anticipates the transactions to be concluded in 2001. As of December 1, 2000, Reliant Energy began reporting the results from its Latin American segment as discontinued operations. REPORTED EARNINGS Reliant Energy's earnings for the year and fourth quarter have been adjusted to eliminate the effects of certain items that are unusual or non-operational in nature. The adjustments, which are shown in the table below, include: losses from and the disposal of discontinued operations in Latin America; extraordinary items; and non-cash, net unrealized accounting gains and losses on indexed debt securities and Reliant Energy's investment in Time Warner common stock. 2000 RESULTS (MILLIONS OF DOLLARS, EXCEPT PER SHARE AMOUNTS) Quarter Ended Year Ended December 31, December 31, ----------------------- ----------------------- EARNINGS 2000 1999 2000 1999 ---------- ---------- ---------- ---------- Net (loss) income, as reported $ (299) $ (73) $ 447 $ 1,482 --------- --------- --------- --------- Loss (income) from discontinued operations 146 (37) 172 9 --------- --------- --------- --------- Loss on disposal of discontinued operations 159 -- 159 -- --------- --------- --------- --------- Net unrealized loss (gain) on indexed debt securities & Time Warner investment 67 -- 67 (1,166) --------- --------- --------- --------- Extraordinary loss (gain) -- 183 (7) 183 --------- --------- --------- --------- Adjusted Earnings 73 73 838 508 --------- --------- --------- --------- EARNINGS PER BASIC SHARE --------- --------- --------- --------- (Loss) income per basic share, as reported (1.04) (.26) 1.57 5.20 --------- --------- --------- --------- Loss (income) from discontinued operations .51 (.13) .61 .03 --------- --------- --------- --------- Loss on disposal of discontinued operations .55 -- .56 -- --------- --------- --------- --------- Net unrealized loss (gain) on indexed debt securities & Time Warner investment .23 -- .23 (4.09) --------- --------- --------- --------- Extraordinary loss (gain) -- .65 (.03) .64 --------- --------- --------- --------- Basic EPS, adjusted .25 .26 2.94 1.78 --------- --------- --------- --------- Weighted average basic shares (000) 286,088 284,427 284,652 285,040 --------- --------- --------- ---------
6 WEBCAST OF EARNINGS CONFERENCE CALL Reliant Energy has scheduled its fourth-quarter 2000 earnings conference call for Friday, January 26, 2001, at 10 a.m. CST. Interested parties may listen to a live audio broadcast of the conference call at www.reliantenergy.com/investors. Parties may also listen to an online replay that will follow within two hours after completion of the call. The webcast requires listeners to have a multimedia computer with speakers and RealPlayer installed. Please visit the website at least 15 minutes before the scheduled broadcast to register for the event and download and install any necessary audio software. FORM 8-K For further details related to the fourth-quarter 2000 earnings release, refer to the company's current report on form 8-K, which was filed today with the Securities and Exchange Commission. Reliant Energy (NYSE: REI) based in Houston, Texas, is an international energy services and energy delivery company with approximately $29 billion in annual revenue and assets totaling approximately $32 billion. The company has a wholesale energy trading and marketing business that is one of only six companies to rank among both the ten largest power marketers and the ten largest natural gas marketers in the U.S. It also has power generation and wholesale trading and marketing operations in Western Europe. The company has nearly 27,000 megawatts of power generation in operation in the U.S. and Western Europe and has announced
7 acquisitions and development projects that will add nearly 4,000 megawatts. Reliant Energy also has marketing and distribution operations serving nearly four million electricity and natural gas customers in the U.S. and a communications business serving the Houston area. * * * * This news release includes forward-looking statements. Actual events and results may differ materially from those projected. Factors that could affect actual results include the timing and impact of future regulatory and legislative decisions, changes in Reliant Energy's business plans, financial market conditions and other factors discussed in Reliant Energy's filings with the Securities and Exchange Commission. - # # # -
8 Reliant Energy, Incorporated and Subsidiaries Statements of Consolidated Operations (Thousands of Dollars) (Unaudited) Quarter Ended December 31, Year Ended December 31, ---------------------------- ---------------------------- 2000 1999 2000 1999 ------------ ------------ ------------ ------------ Revenues: Electric Operations $ 1,298,943 $ 969,983 $ 5,494,191 $ 4,483,127 Wholesale Energy 6,833,177 2,084,689 19,233,721 7,911,567 Natural Gas Distribution 1,757,422 851,871 4,412,219 2,788,288 Pipelines and Gathering 109,690 86,657 384,132 330,995 European Energy 164,424 152,865 579,730 152,865 Other Operations 3,306 10,332 55,255 34,810 Eliminations (297,540) (154,954) (819,864) (478,558) ------------ ------------ ------------ ------------ Total Revenues 9,869,422 4,001,443 29,339,384 15,223,094 ------------ ------------ ------------ ------------ Expenses: Fuel and cost of gas sold 5,949,260 2,018,740 15,071,801 6,699,792 Purchased power 2,602,483 907,591 8,627,853 4,137,414 Operation and maintenance 741,521 531,756 2,356,207 1,781,030 Taxes other than income taxes 128,129 102,540 498,061 441,242 Depreciation and amortization 200,170 203,286 906,328 905,305 ------------ ------------ ------------ ------------ Total 9,621,563 3,763,913 27,460,250 13,964,783 ------------ ------------ ------------ ------------ Operating Income 247,859 237,530 1,879,134 1,258,311 ------------ ------------ ------------ ------------ Other Income (Expense): Unrealized (loss) gain on Time Warner investment (447,897) 636,301 (204,969) 2,452,406 Unrealized gain (loss) on indexed debt securities 344,721 (636,301) 101,851 (629,523) Income (loss) of equity investment of unconsolidated subsidiaries 9,752 (224) 42,860 (793) Other - net 29,331 23,682 83,765 59,766 ------------ ------------ ------------ ------------ Total (64,093) 23,458 23,507 1,881,856 ------------ ------------ ------------ ------------ Interest and Other Charges: Interest 174,145 139,941 700,083 498,451 Distribution on trust preferred securities 13,900 12,787 54,358 51,220 ------------ ------------ ------------ ------------ Total 188,045 152,728 754,441 549,671 ------------ ------------ ------------ ------------ (Loss) Income from Continuing Operations Before Income Taxes, Extraordinary Items and Preferred Dividends (4,279) 108,260 1,148,200 2,590,496 Income Tax (Benefit) Expense (9,899) 34,819 377,064 915,973 ------------ ------------ ------------ ------------ Income from Continuing Operations Before Extraordinary Items and 5,620 73,441 771,136 1,674,523 Preferred Dividends Income (loss) from Discontinued Operations (net of income taxes of $47,736, $8,006, $45,721 and $16,856) (145,561) 37,133 (172,375) (8,792) Loss on Disposal of Discontinued Operations, including provision of $5,741 for operating loss during phase-out period (158,706) -- (158,706) -- (less applicable income taxes of $12,846) Extraordinary (Loss) Gain, net of tax of $98,679 and $0 -- (183,261) 7,445 (183,261) ------------ ------------ ------------ ------------ Income (Loss) Before Preferred Dividends (298,647) (72,687) 447,500 1,482,470 Preferred Dividends 97 97 389 389 ------------ ------------ ------------ ------------ Net (Loss) Income Attributable to Common Stockholders $ (298,744) $ (72,784) $ 447,111 $ 1,482,081 ============ ============ ============ ============ Reference is made to the Notes to the Consolidated Financial Statements contained in the Annual Report of Reliant Energy, Incorporated. The information furnished is given in response to your request for information concerning Reliant Energy, Incorporated and not in connection with any sale or offer for sale of, or solicitation of an offer to buy, any securities.
9 Reliant Energy, Incorporated Selected Data From Statements of Consolidated Income (Thousands of Dollars, Except Per Share Amounts) (Unaudited) Quarter Ended Year Ended December 31, December 31, --------------------------- --------------------------- 2000 1999 2000 1999 ------------ ------------ ------------ ------------ AS REPORTED: Basic Earnings Per Common Share Income from continuing operations before extraordinary items $ 0.02 $ 0.26 $ 2.71 $ 5.87 (Loss) income from discontinued operations, net of tax $ (0.51) $ 0.13 $ (0.61) $ (0.03) Loss on disposal of discontinued operations, net of tax $ (0.55) $ -- $ (0.56) $ -- Extraordinary (loss) gain, net of tax $ -- $ (0.65) $ 0.03 $ (0.64) Net (loss) income attributable to common stockholders $ (1.04) $ (0.26) $ 1.57 $ 5.20 Diluted Earnings Per Common Share Income from continuing operations before extraordinary items $ 0.02 $ 0.26 $ 2.68 $ 5.85 (Loss) income from discontinued operations, net of tax $ (0.51) $ 0.13 $ (0.60) $ (0.03) Loss on disposal of discontinued operations, net of tax $ (0.55) $ -- $ (0.55) $ -- Extraordinary (loss) gain, net of tax $ -- $ (0.65) $ 0.03 $ (0.64) Net (loss) income attributable to common stockholders $ (1.04) $ (0.26) $ 1.56 $ 5.18 Dividends per Common Share $ 0.375 $ 0.375 $ 1.500 $ 1.500 Weighted Average Common Shares Outstanding (000): - Basic 286,088 284,427 284,652 285,040 - Diluted 286,088 284,427 287,287 286,021 AS ADJUSTED FOR UNUSUAL AND OTHER CHARGES: Net (Loss) Income Attributable to Common Stockholders $ (298,744) $ (72,784) $ 447,111 $ 1,482,081 Unusual and other charges, after tax : (Income) loss from discontinued operations 145,561 (37,133) 172,375 8,792 Loss on disposal of discontinued operations 158,706 -- 158,706 -- Extraordinary loss (gain) -- 183,261 (7,445) 183,261 Net unrealized loss (gain) on indexed debt securities and Time Warner investment 67,064 -- 67,027 (1,165,740) ----------- ----------- ----------- ----------- Adjusted Earnings $ 72,587 $ 73,344 $ 837,774 $ 508,394 =========== =========== =========== =========== Adjusted Basic Earnings Per Common Share $ 0.25 $ 0.26 $ 2.94 $ 1.78 Adjusted Diluted Earnings Per Common Share $ 0.25 $ 0.26 $ 2.92 $ 1.78 OPERATING INCOME (LOSS) BY SEGMENT (IN MILLIONS) Electric Operations $ 203 $ 144 $ 1,230 $ 981 Wholesale Energy 16 (14) 482 27 Natural Gas Distribution 64 57 113 158 Pipelines and Gathering 38 35 137 131 European Energy 17 32 89 32 Other Operations (90) (16) (172) (71) ----------- ----------- ----------- ----------- Total $ 248 $ 238 $ 1,879 $ 1,258 =========== =========== =========== =========== FOR ADDITIONAL INFORMATION PLEASE CONTACT: Randy Burkhalter (713) 207-3115 Dennis Barber (713) 207-3042