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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): April 16, 2001
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RELIANT ENERGY, INCORPORATED
(Exact name of registrant as specified in its charter)
TEXAS 1-3187 74-0694415
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
1111 LOUISIANA
HOUSTON, TEXAS 77002
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 207-3000
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RELIANT ENERGY RESOURCES CORP.
(Exact name of registrant as specified in its charter)
DELAWARE 1-13265 76-0511406
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
1111 LOUISIANA
HOUSTON, TEXAS 77002
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 207-3000
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This combined current report on Form 8-K is separately filed by Reliant
Energy, Incorporated (Reliant Energy) and Reliant Energy Resources Corp. (RERC).
The information contained herein under "Natural Gas Distribution" and "Pipelines
and Gathering" relates to RERC and 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's adjusted earnings for the first quarter of 2001 were
$274 million, or $0.94 per diluted share, compared to adjusted earnings of $134
million, or $0.47 per share, for the same period of 2000. The increase was
primarily due to the strong performance from the company's wholesale energy
segment and improved results from its natural gas distribution and pipelines and
gathering segments.
The reported income for the first quarter of 2001 was $262 million, or
$0.90 per diluted share, which includes:
o A loss of $7 million on the disposal of discontinued operations in
Latin America,
o A non-cash gain of $62 million from the cumulative effect of an
accounting change (implementation of SFAS No. 133), and
o A $65 million after-tax, non-cash charge relating to the redesign
of the company's benefits for employees of the company's
unregulated businesses in anticipation of the spin-off of its
unregulated businesses.
Reported income for the first quarter of 2000 was $133 million, or $.47
per share, which included a $1 million loss from discontinued operations in
Latin America.
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2001 RESULTS*
(MILLIONS OF DOLLARS, EXCEPT PER SHARE AMOUNTS)
-----------------------------------------------------------------------------------------
Quarter Ended
March 31,
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EARNINGS 2001 2000
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Net Income, As Reported $ 262 $ 133
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Loss from discontinued operations -- 1
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Loss on disposal of discontinued operations 7 --
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Cumulative effect of accounting change (SFAS No. 133) (62) --
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Curtailment and related enhancement of benefits 65 --
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Adjusted Earnings $ 274 $ 134
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DILUTED EARNINGS PER SHARE
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Diluted Earnings Per Share, As Reported $ .90 $ .47
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Loss from discontinued operations -- --
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Loss on disposal of discontinued operations .03 --
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Cumulative effect of accounting change (SFAS No. 133) (.21) --
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Curtailment and related enhancement of benefits .22 --
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Diluted Earnings Per Share, Adjusted $ .94 $ .47
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Weighted Average Diluted Shares (in thousands)** 290,173 284,251
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* Immaterial rounding differences exist in this summarized schedule.
** On March 31, 2001, Reliant Energy had 288,969,715 shares of common stock
outstanding for financial reporting purposes.
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OPERATING INCOME (LOSS) BY SEGMENT
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Three Months Ended
March 31,
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2001 2000
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Electric Operations $ 186 $ 202
Wholesale Energy 216 (22)
Natural Gas Distribution 135 105
Pipelines and Gathering 39 32
European Energy 18 33
Other Operations (134) (9)
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Total Operating Income $ 460 $ 341
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ELECTRIC OPERATIONS
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Reliant Energy HL&P's operating income for the first quarter of 2001
was $186 million compared to $202 million for the same 2000 period. This
decrease resulted primarily from increased operating expenses (largely relating
to benefits and information technology) and taxes, partially offset by continued
strong revenue growth and lower depreciation and amortization expenses. Reliant
Energy HL&P amortized $37 million of the impairment of its electric plant for
the first quarter of 2001, compared to $52 million for the same period of 2000.
The impact of weather was unfavorable compared to normal ($5 million) for the
first quarter of 2001.
Three Months Ended
GWh Sales March 31,
--------- --------------------------- Percent
2001 2000 Change
--------- --------- -------
Residential 3,951 3,446 15%
Commercial 3,969 3,737 6%
Industrial - Firm 6,804 7,009 (3)%
Industrial - Interruptible 634 1,313 (52)%
Other (1) 296 721 (59)%
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Total 15,654 16,226 (4)%
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(1) Includes municipals, public utilities, off-system and ancillary
services sales.
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WHOLESALE ENERGY
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Three Months Ended
March 31,
--------------------- Percent
2001 2000 Change
------ ------ ---------
Wholesale Power Sales (MMWh) 76 28 171%
Natural Gas Sales Volumes (Bcf) 767 549 40%
The Wholesale Energy segment produced first quarter operating income of
$216 million compared to an operating loss of $22 million for the first quarter
of 2000. Gross margins for the wholesale group increased by $343 million from
the same quarter of last year. Increased revenues from energy and ancillary
services, the addition of nearly 4,300 MW of power generation in the
Mid-Atlantic region and strong commercial and operational performance in other
regions contributed to the significant improvement in first-quarter results.
These results were partially offset by higher general and administrative
expenses to support expanded generation and commercial activities. In addition,
the company incurred higher expenses associated with air emissions in the West
region of $21 million and recognized a $38 million provision taken against
receivable balances related to energy sales in the West region. The wholesale
group also reported an increase in equity income, which is included in other
income for the first quarter of 2001 of $12 million, largely due to additional
earnings from operations in the West region.
NATURAL GAS DISTRIBUTION
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Operations Data in Bcf
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Three Months Ended
March 31,
------------------------- Percent
2001 2000 Change
-------- -------- ---------
Residential & Commercial Sales 153.0 120.9 27%
Industrial Sales 11.1 13.2 (16)%
Transportation 14.5 15.2 (5)%
Unregulated Retail Sales 132.0 140.0 (6)%
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Total Throughput 310.6 289.3 7%
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Three Months Ended
March 31,
------------------------- Percent
2001 2000 Change
-------- -------- ---------
Heating Degree Days
Actual 6,676 5,145 30%
Normal 6,315 6,353 (1)%
Percent Change to Normal 6% (19)%
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The Natural Gas Distribution segment reported operating income of $135
million for the first quarter of 2001, compared to operating income of $105
million for the first quarter of 2000. The increase resulted primarily from
improved margins due to cooler weather of $35 million, partially offset by
increased operating expenses.
PIPELINES AND GATHERING
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Operations Data (million MMBtu)
Three Months Ended
March 31,
------------------------- Percent
2001 2000 Change
-------- -------- ---------
Sales 6.0 3.8 58%
Transportation 246.4 261.4 (6)%
Gathering 69.9 70.5 (1)%
Elimination (1.3) (3.4) (62)%
-------- --------
Total Throughput 321.0 332.3 (3)%
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Operating income from the Pipelines and Gathering segment was $39
million for the first quarter of 2001 compared to operating income of $32
million in the first quarter of 2000. The increase was primarily due to improved
margins from both the pipelines and gas gathering businesses.
EUROPEAN ENERGY
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The European Energy segment reported operating income of $18
million for the first quarter of 2001 compared to $33 million for the same
period of 2000. The decline was primarily due to a decrease in gross margins
resulting from competition in the Dutch wholesale market, which began January 1,
2001. Margins from ancillary services sales and the increase in margins from
district heating partially offset the decline.
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OTHER OPERATIONS
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The Other Operations segment, which includes Reliant Energy's
unregulated retail electric operations, communications business, eBusiness group
and corporate costs, reported an adjusted operating loss of $33 million for the
first quarter of 2001, compared to an operating loss of $9 million for the same
period last year. The decline was primarily a result of increased costs related
to the company's communications operations and the timing of certain legal
expenses.
In anticipation of the spin-off of its unregulated businesses, the
company incurred a $101 million pre-tax, non-cash charge in the first quarter
of 2001 related to the redesign of its benefits plans. Including this charge,
the reported operating loss for this segment was $134 million.
OUTLOOK
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Management is comfortable that Reliant Energy should outperform its
previously announced 10% to 12% EPS growth target for 2001.
For additional information, please contact:
Dennis Barber
Director of Investor Relations
(713) 207-3042
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 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.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
The following exhibit is filed herewith:
99.1 Press Release issued April 16, 2001
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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: April 16, 2001 By: /s/ MARY P. RICCIARDELLO
Mary P. Ricciardello
Senior Vice President and
Chief Accounting Officer
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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: April 16, 2001 By: /s/ MARY P. RICCIARDELLO
Mary P. Ricciardello
Senior Vice President
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EXHIBIT INDEX
Exhibit
Number Exhibit Description
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99.1 Press Release issued April 16, 2001