CONFORMED
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): October 16, 2002
| 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. | ||
| 411 - 108th Avenue N.E. | ||
| Bellevue, Washington 98004-5515 | ||
| (425) 454-6363 |
ITEM 5. Other Events
On October 16, 2002, the Company issued the following press release:
Puget Energy announces third quarter earnings; increases 2002 earnings guidance
Bellevue, Wash. (October 16, 2002)-- Puget Energy (NYSE: PSD) today reported 2002 third-quarter income for common stock of $6.6 million, or 7 cents per share. In the same period a year ago, Puget Energy's third quarter results were $4.7 million, or 5 cents per share.
“This quarter continues to reflect our disciplined progress toward restoring the financial health of Puget Energy,” said Puget Energy President and CEO Stephen P. Reynolds. “While this has been a tumultuous period for the energy industry and financial markets in general, we’re pleased to be able to increase Puget Energy’s 2002 earnings guidance by 5 cents a share, to a range of $1.20 to $1.25 per share.” The company also affirmed its current earnings guidance for the full year 2003, which remains unchanged at $1.75 to $1.90.
“The primary reason we are able to increase our earnings target for the calendar year 2002 is the continued strong performance of our utility operations,” said Reynolds. “The utility is exceeding our expectations, primarily due to successful settlement of regulatory issues earlier in the year, lower net power costs, continued operational efficiencies and federal income tax benefits. We expect this trend to continue in the fourth quarter, assuming normal weather.” Year-to-date income for Puget Energy common stock was $60.5 million, or 69 cents per share, compared with income of $92.2 million, or $1.06 per share, in the year-ago period. The reduction in year-to-date 2002 earnings compared with the same period one year ago is primarily attributable to the first quarter under-recovery of Puget Sound Energy’s (PSE) net power costs prior to PSE’s rate case settlement in the second quarter. Year-to-date income for the nine months ended September 30, 2001 included a one-time net benefit of 5 cents per share resulting from the asset sale of a former PSE subsidiary, net of an operating loss at that subsidiary through the date of the sale. Also included in that period is a benefit of $0.20 per share from the sale of two properties by a PSE real estate subsidiary.
PSE contributed 3 cents per common share in the third quarter of 2002. Puget Energy’s unregulated utility infrastructure services subsidiary, InfrastruX Group, continued to deliver on its plan, contributing 4 cents per common share in the third quarter of 2002. “We are pleased that the quality of InfrastruX’s operating companies and its geographic and business line diversity has enabled it to withstand the cyclical downturn in market conditions and other factors that have more severely affected many of its peers.” added Reynolds.
Puget Energy will provide more detail on third-quarter results during a conference call for analysts scheduled at 10 a.m. ET (7 a.m. PT) tomorrow, Thursday, October 17, 2002. The call will be broadcast live through a Web cast at www.pse.com by accessing the Investors section of the Web site. The Web cast will be archived and available for replay following the live call. A tape-recorded replay of the call will be available two hours after completion of the conference on October 17 through midnight (ET) Tuesday, October 22, 2002 by dialing 1-800-428-6051 and entering the conference identification number at 263530.
PUGET ENERGY -- SUMMARY INCOME STATEMENT
(In thousands, except per-share amounts, Unaudited)
Three months ended 09/30 1 Year-to-date 09/30 1
-------------------------------- ------------------------------------
2002 2001 2 2002 2001 2
-------------------------------- ------------------------------------
Operating revenues
Electric $ 299,443 $ 333,615 $ 978,814 $ 1,497,563
Gas 65,788 91,778 524,663 559,061
Other 93,245 53,573 234,878 156,872
--------------- --------------- ----------------- ----------------
Total operating revenues 458,476 478,966 1,738,355 2,213,496
--------------- --------------- ----------------- ----------------
Operating expenses
Purchased electricity 132,820 120,444 442,731 725,184
Purchased gas 31,126 50,976 324,444 371,769
Electric generation fuel 16,856 67,949 96,716 233,467
Residential exchange (26,427) (19,270) (100,139) (46,315)
FAS-133 unrealized (gain)/loss (335) 567 (12,083) (14,494)
Utility operations & maintenance 68,933 64,213 208,505 190,806
Other operations & maintenance 76,316 47,881 193,025 119,492
Depreciation & amortization 57,190 54,195 170,495 160,258
Conservation amortization 4,216 1,440 9,985 4,645
Other taxes 42,226 38,671 162,412 154,057
Federal income taxes (1,543) 6,144 31,763 72,260
--------------- --------------- ----------------- ----------------
Total operating expenses 401,378 433,210 1,527,854 1,971,129
--------------- --------------- ----------------- ----------------
Operating income 57,098 45,756 210,501 242,367
Other income (net of tax) 230 7,892 4,055 11,402
--------------- --------------- ----------------- ----------------
Income before interest charges & minority interest 57,328 53,648 214,556 253,769
Interest charges 48,439 46,839 147,518 140,448
Minority interest 377 --- 679 ---
--------------- --------------- ----------------- ----------------
Net income before cumulative effect of
accounting change 8,512 6,809 66,359 113,321
FAS-133 transition adjustment loss (net of tax) --- --- --- 14,749
--------------- --------------- ----------------- ----------------
Net Income 8,512 6,809 66,359 98,572
Less preferred stock dividend accruals 1,940 2,085 5,892 6,328
--------------- --------------- ----------------- ----------------
Income for common stock $ 6,572 $ 4,724 $ 60,467 $ 92,244
=============== =============== ================= ================
Common shares outstanding 87,618 86,571 87,388 86,303
Diluted shares outstanding 87,975 86,995 87,737 86,717
--------------- --------------- ----------------- ----------------
Basic earnings per common share before
cumulative effect of accounting change $ 0.07 $ 0.06 $ 0.69 $ 1.24
Cumulative effect of accounting change --- --- --- (0.17)
--------------- --------------- ----------------- ----------------
Basic earnings per common share $ 0.07 $ 0.06 $ .69 $ 1.07
Diluted earnings per common share before
cumulative effect of accounting change $ 0.07 $ 0.05 $ 0.69 $ 1.23
Cumulative effect of accounting change --- --- --- (0.17)
--------------- --------------- ----------------- ----------------
Diluted earnings per common share 3 $ 0.07 $ 0.05 $ 0.69 $ 1.06
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.
PUGET SOUND ENERGY1 -- UTILITY OPERATING DATA
Three months ended 09/30 Year-to-date 9/30
-------------------------------- ----------------------------------
2002 2001 2002 2001
-------------------------------- ----------------------------------
Energy sales revenues
($ in thousands, Unaudited)
Electricity
Residential $ 116,022 $ 105,058 $ 468,069 $ 445,906
Commercial 129,394 113,372 399,944 393,071
Industrial 22,869 39,663 68,084 257,878
Other retail sales 2 3,782 (1,644) (15,806) (70,456)
--------------- --------------- --------------- ---------------
Subtotal, retail sales 272,067 256,449 920,291 1,026,399
Transportation 2 4,791 351 12,873 336
Sales to other utilities & 19,841 96,977 50,883 491,064
marketers 3
Other 4 2,744 (20,162) (5,233) (20,236)
--------------- --------------- --------------- ---------------
Total electricity sales 299,443 333,615 978,814 1,497,563
Gas
Residential 33,208 41,672 315,670 322,900
Commercial 22,252 35,366 163,711 183,552
Industrial 4,947 9,340 28,381 36,572
--------------- --------------- --------------- ---------------
Subtotal, retail sales 60,407 86,378 507,762 543,024
Transportation 3,068 3,133 9,024 8,554
Other 2,313 2,267 7,877 7,483
--------------- --------------- --------------- ---------------
Total gas sales 65,788 91,778 524,663 559,061
--------------- --------------- --------------- ---------------
Total energy sales revenues $ 365,231 $ 425,393 $ 1,503,477 $ 2,056,624
--------------------------------------------------------------------------- ----------------------------------
Energy sales volumes
Electricity (in mWh)
Residential 1,803,389 1,748,140 7,340,492 7,121,940
Commercial 1,986,181 1,890,011 5,979,395 6,000,317
Industrial 367,484 597,730 1,062,665 2,050,925
Other 2 30,009 9,833 (319,042) (524,025)
--------------- --------------- --------------- ---------------
Subtotal, retail sales 4,187,063 4,245,714 14,063,510 14,649,157
Transportation 2 730,959 116,035 1,801,715 116,035
Sales to other utilities & 1,026,461 1,419,885 2,379,170 3,945,510
marketers 3 --------------- --------------- --------------- ---------------
--------------- --------------- --------------- ---------------
Total mWh 5,944,483 5,781,634 18,244,395 18,710,702
Gas (in 000's of therms)
Residential 33,521 35,160 337,893 317,536
Commercial 35,530 40,971 207,694 208,827
Industrial 9,048 11,143 37,992 41,984
Transportation 47,776 45,093 151,532 138,243
--------------- --------------- --------------- ---------------
Total gas volumes 125,875 132,367 735,111 706,590
--------------------------------------------------------------------------- ----------------------------------
Customers served 5
Electricity
Residential 842,170 829,331 838,899 824,070
Commercial 103,538 100,333 102,337 99,858
Industrial 3,897 3,989 3,929 4,026
Other 1,931 1,818 1,891 1,731
Transportation 15 10 15 3
--------------- --------------- --------------- ---------------
Total electricity customers 951,551 935,481 947,071 929,688
Gas
Residential 565,585 549,890 562,539 546,727
Commercial 46,347 46,789 46,407 46,716
Industrial 2,735 2,842 2,775 2,851
Transportation 129 112 117 112
--------------- --------------- --------------- ---------------
Total gas customers 614,796 599,633 611,838 596,406
--------------------------------------------------------------------------- ----------------------------------
Weather
Actual heating degree days 235 280 3,324 3,293
Normal heating degree days 279 279 3,179 3,179
1Puget Sound Energy is the electric and natural gas utility subsidiary of Puget Energy.
2Includes change in unbilled revenues.
3Includes optimization transactions reported net in the income statement as required by EITF 02-03,effective after June 30, 2002. Prior periods have been reclassified to conform with the presentation.
4Includes Conservation Trust collection and sales of non-core gas
suppliers.
5Quarterly data represents average served during September; Year-to-date data represents
average for the 9 months ended.
PUGET ENERGY -- SEGMENT RESULTS
(In thousands, Unaudited)
Puget Sound Puget Energy
Three months ended 09/30/02 Energy InfrastruX Other 1 Total
-------------------------------------------------------------------------------------------------
Revenues $ 365,232 $ 92,372 $ 872 $ 458,476
Depreciation and amortization 53,351 3,784 55 57,190
Federal income tax (4,198) 2,602 53 (1,543)
Operating income 51,002 5,871 225 57,098
Interest charges, net of AFUDC 46,876 1,563 - 48,439
Net income 4,335 3,952 225 8,512
Total assets 5,059,109 320,755 126,286 5,506,150
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Total assets at 12/31/01 5,178,601 229,125 139,251 5,546,977
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Three months ended 09/30/01
-------------------------------------------------------------------------------------------------
Revenues $ 425,393 $ 52,771 $ 802 $ 478,966
Depreciation and amortization 52,057 2,134 4 54,195
Federal income tax 5,177 783 184 6,144
Operating income 43,229 3,398 (871) 45,756
Interest charges, net of AFUDC 45,710 1,068 61 46,839
Net income (3,207) 1,337 8,679 6,809
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Year to date 09/30/02
-------------------------------------------------------------------------------------------------
Revenues $ 1,503,478 $ 229,255 $ 5,622 $ 1,738,355
Depreciation and amortization 161,024 9,308 163 170,495
Federal income tax 25,095 4,952 1,716 31,763
Operating income 196,021 12,034 2,446 210,501
Interest charges, net of AFUDC 143,558 3,960 - 147,518
Net income 56,616 7,476 2,267 66,359
-------------------------------------------------------------------------------------------------
Year to date 09/30/01
-------------------------------------------------------------------------------------------------
Revenues $ 2,056,624 $ 126,780 $ 30,092 $ 2,213,496
Depreciation and amortization 155,052 5,195 11 160,258
Federal income tax 62,364 1,894 8,002 72,260
Operating income 220,267 8,322 13,778 242,367
Interest charges, net of AFUDC 137,661 2,513 274 140,448
Net income 72,168 2,998 23,406 98,572
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1 Includes the non-regulated subsidiaries of Puget Sound Energy and miscellaneous holding company expenses. The principal non-regulated subsidiary of PSE is a real estate development company. PSE sold the assets of its software development subsidiary, ConneXt, Inc., in the third quarter for 2001.
###
Cautionary Statement: Certain statements contained in this news release are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, among which include statements regarding estimates of earnings per share. In some cases, you can identify forward-looking statements by terminology such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “will likely result,” “will continue” or similar expressions. Forward-looking statements are based on the opinions and estimates of management at the time the statements are made and are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. Factors that could affect actual results include, among others, governmental policies and regulatory actions, including those of the FERC and the WUTC, with respect to financings, industry and rate structures, acquisition and disposal of assets and facilities, operation and construction of plant facilities, recovery of purchased energy and other capital investments, and present or prospective wholesale and retail competition; weather, which can have a serious impact on retail energy sales and on PSE’s ability to procure adequate supplies of gas, fuel or purchased power to serve its customers and on the cost of procuring such supplies; hydroelectric conditions, which can have a serious impact on electric capacity and PSE’s ability to generate electricity; wholesale energy prices; industrial, commercial and residential growth and demographic patterns in the service territories of PSE; and the ability of Puget Energy and PSE to access the capital markets to support requirements for working capital, construction costs and the repayment of maturing debt. More information about these and other factors that potentially could affect Puget Energy’s financial results is included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001, Quarterly Report on Form 10-Q for the second quarter of 2002 and in their other public filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance upon these forward-looking statements that speak only as to the date of this release. Except as required by law, Puget Energy and PSE undertake no obligation to update any forward-looking statements.
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. |
| /s/ James W. Eldredge |
| James W. Eldredge |
| Corporate Secretary and Chief Accounting Officer |
Date: October 17, 2002