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ORION POWER HOLDINGS, INC.
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(Name of Registrant as Specified in Its Charter)
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[Orion Power Holdings, Inc. Logo]
ORION POWER ANNOUNCES BEST EVER QUARTER RESULTS, EARNINGS PER SHARE OF $0.58; ON
TARGET FOR 2001 AND 2002 EARNINGS FORECASTS
BALTIMORE, Oct. 31 -- Orion Power Holdings, Inc. (NYSE: ORN), an independent
electric power generating company, announced today the best quarterly earnings
in the company's history. Additionally, it announced that it is making
substantial progress on its proposed merger with Reliant Resources, Inc.
Net income for the quarter ended September 30, 2001 was $64.9 million,
substantially exceeding net income of $3.9 million for the third quarter of
2000. Diluted earnings per share rose to $0.58 per share from $0.05 per share
for the same period in 2000, with 113.7 million equivalent shares outstanding in
2001 compared with only 71.9 million equivalent shares outstanding in 2000 when
Orion Power was a privately held company. Revenue for the quarter increased 7%
to $367.0 million, from $343.0 million a year ago. Earnings Before Interest,
Tax, Depreciation and Amortization (EBITDA) rose 87% to $173.4 million for the
quarter, compared with $92.7 million a year ago.
For the nine months ended September 30, 2001, net income was $101.3 million, an
increase of 472% compared with net income of $17.7 million for the same period
in 2000. Diluted earnings per share rose 238% to $0.98 per share compared with
$0.29 per share in 2000, with 104.6 million equivalent shares in 2001 compared
with 57.9 million equivalent shares outstanding in 2000. Revenue for the first
nine months was $946.8 million, an increase of 38% from $684.7 million a year
ago. EBITDA for the first nine months rose 88% to $394.9 million from $210.6
million in 2000.
"We are proud of our accomplishments in the third quarter and first nine months
of 2001," said Orion Power's President and Chief Executive Officer, Jack Fusco.
"Our entrepreneurial culture, diversified generation asset base, talented people
and sound risk management practices have enabled us to achieve strong financial
performance and to create shareholder value. Indeed, the announced merger with
Reliant Resources is a validation of our strategy and the superb execution of
that strategy by our dedicated and resourceful employees."
Scott Helm, Orion Power's Executive Vice President and Chief Financial Officer,
added: "Our third quarter results met the expectations we set forth in early
July. We are also pleased to report that, due in part to the sale of our
capacity in the New York City 2001-2002 winter capacity auction at attractive
prices, we anticipate meeting our fourth quarter earnings target. This, in turn,
means we anticipate meeting our target of $1.15 of diluted earnings per share
for the year 2001, delivering to shareholders 86% annual earnings growth.
Lastly, without giving effect to the anticipated merger with Reliant Resources,
we also reiterate our previous full year 2002 guidance for fully diluted
earnings per share of $1.50."
"Finally," Fusco concluded, "we have made meaningful progress toward completing
the merger with Reliant Resources. We have made the requisite regulatory filings
and established a merger integration planning team and process. I am confident
the merger team will remain focused on obtaining the approvals on a timely basis
and assuring that solid planning is in place so that we can achieve a seamless
integration of the two companies. Meanwhile, the Orion Power team will remain
focused on operating our business."
Other highlights of Orion Power's recent achievements include:
-- Filing for the following merger/ shareholder approvals/notifications:
- Federal Trade Commission and Department of Justice notification
pursuant to Hart Scott Rodino Act,
- Federal Energy Regulatory Commission (FERC) approval under the
Federal Power Act,
- New York Public Service Commission declaration that it will not
exercise jurisdiction, and
- A Preliminary Proxy Statement with the SEC for Orion Power
stockholders' approval;
-- Receipt of the final approvals necessary to commence construction of
Kelson Ridge Generating Station located in Maryland, south of
Washington, DC;
-- Filing of the Article X application with the New York State Siting
Board for approval to expand the capacity and substantially improve
the operating and environmental efficiency of the Astoria Generating
Station in New York City;
-- Completion of the purchase of a 250 megawatt combined-cycle power
project, expected to be in operation by 2004, and, located near West
Palm Beach, FL from Competitive Power Ventures (CPV); and
-- Significant advancements in our construction projects at Brunot
Island in Pittsburgh and Liberty Electric in South Philadelphia.
Orion Power will hold a conference call this morning to discuss its results of
operations for the third quarter of 2001. The details of the call are as
follows:
Date: October 31st
Time: 11:00 am EST
Live Domestic Call-in: (800) 982-3654
Live International Call-in: (703) 871-3021
Passcode: 5583288
Webcast (for both live and replay): www.orionpower.com, click
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on 'Investor Relations'
Replay (available through November 2nd): (703) 925-2533
Replay Passcode: 5583288
Orion Power Holdings, Inc. (NYSE: ORN), headquartered in Baltimore, MD, is a
fast-growing independent electric power generating company formed in March 1998
to acquire, develop, own and operate power-generating facilities in the newly
deregulated wholesale markets throughout North America. Since its inception,
Orion Power Holdings has invested over $4 billion in 81 power plants currently
in operation with a total capacity of 5,926 megawatts and an additional 5,000
megawatts in construction and various stages of development.
On September 27, 2001, Orion Power Holdings, Inc. and Reliant Resources, Inc.
(NYSE: RRI) announced that they have entered into a definitive merger agreement,
under which Reliant Resources will acquire all of the outstanding shares of
Orion Power. The companies anticipate that the transaction will be completed in
early 2002, at which time Orion Power's business will be combined with Reliant
Resources' domestic wholesale group. For more information about Orion Power,
visit its website at www.orionpower.com.
Orion Power Holdings, Inc. (the "Company") has filed a preliminary proxy
statement and other relevant documents concerning the proposed merger
transaction between the Company and Reliant Resources, Inc. ("Reliant
Resources") with the SEC. The Company plans to file a definitive proxy statement
and other relevant documents concerning the proposed merger
transaction with the SEC. WE URGE INVESTORS TO READ THE DEFINITIVE PROXY
STATEMENT (WHEN IT BECOMES AVAILABLE) AND ANY OTHER RELEVANT DOCUMENTS FILED
WITH THE SEC, BECAUSE THEY CONTAIN IMPORTANT INFORMATION. Investors can obtain
these documents after they are filed with the SEC free of charge at the SEC's
web site (www.sec.gov) or by contacting Investor Relations, Orion Power
Holdings, Inc., 7 East Redwood Street, 10th Floor, Baltimore, Maryland 21202;
telephone (410) 230-3528.
The Company and its directors, executive officers and certain of its employees
may be considered "participants" in the solicitation of proxies from the
Company's stockholders in connection with the merger transaction. Information
regarding such persons and a description of their interests in the Company and
in the transaction are contained in the Company's proxy statement for its 2001
Annual Meeting of Stockholders dated April 30, 2001, in the definitive proxy
statement to be filed by the Company with the SEC, and in the Company's Annual
Reports on Form 10-K filed with the SEC.
For further information please contact Rahul Advani at 410-230-3528.
Caution regarding forward-looking statements:
The information presented and conference call referenced above includes
forward-looking statements, in addition to historical information. Orion Power
cautions that there can be no assurance that such indicative results will be
realized and that there are various important factors that could cause actual
results to differ materially from those indicated in the forward-looking
statements, such as, but not limited to (i) changes in government regulations
(including environmental regulations) and anticipated deregulation of the
electric energy industry; (ii) additional competition in Orion Power's markets;
(iii) potential business strategies, including acquisitions or dispositions of
assets that Orion Power may pursue; (iv) political, legal and economic
conditions and developments in Orion Power's markets; (v) financial market
conditions and the results of financing efforts; (vi) changes in commodity
prices and interest rates; (vii) weather and other natural phenomena; (viii) the
performance of Orion Power projects and investments and the success of efforts
to develop new opportunities; and (ix) other factors, whether discussed above or
in reports filed by Orion Power with the Securities and Exchange Commission.
SUMMARY INCOME STATEMENT
($ In thousands, except per share amounts)
Three Months Ended, Nine Months Ended,
9/30/2001 9/30/2000 9/30/2001 9/30/2000
Revenues $366,999 $343,010 $946,812 $684,684
Operating Expenses
Fuel 147,646 189,539 385,838 317,245
(Gain)/Loss in
derivative financial
instruments (14,748) -- (16,407) --
Operations &
maintenance 35,041 32,569 92,725 68,122
General &
administrative 15,183 9,837 43,363 24,333
Taxes other than
income 10,484 18,336 46,354 45,352
Depreciation &
amortization 34,439 33,143 99,634 75,439
Charge for buyout of
operations &
maintenance contract -- -- -- 19,000
Total operating
expenses 228,045 283,424 651,507 549,491
Operating income 138,954 59,586 295,305 135,193
Interest expense,
net (44,328) (52,835) (137,314) (105,138)
Pre-tax Income 94,626 6,751 157,991 30,055
Income Taxes (29,752) (2,830) (56,666) (12,384)
Net Income $64,874 $3,921 $101,325 $17,671
EPS -
Basic $0.63 $0.05 $1.04 $0.31
Diluted $0.58 $0.05 $0.98 $0.29
EBITDA $173,393 $92,729 $394,939 $210,632
Megawatt hours
produced 5,270,679 4,875,779 15,048,615 10,370,161
Megawatts owned
(end-of-period) 5,926 5,396 5,926 5,396