Peoples Energy Reports Second Quarter Results Reaffirms Fiscal 2001 Estimate

Apr 27, 2001, 01:00 ET from Peoples Energy

    CHICAGO, April 27 /PRNewswire/ -- Peoples Energy (NYSE:   PGL) reported
 today that its second quarter earnings for the three month period ended
 March 31, 2001 were $62.5 million, or $1.77 per share, up from $57.4 million,
 or $1.62 per share for the same period a year ago.  For the most recent six
 month period, earnings were $98.8 million or $2.80 per share, compared to
 $87.0 million, or $2.45 per share for the same period last year.
     Quarterly and fiscal year-to-date results were positively impacted by
 weather that was colder than the prior year periods by 19% and 23%,
 respectively, offset by the negative impact of gas prices that were at record
 levels.  The combined effect of these two factors is reflected in current
 accounts receivable balances, which are significantly higher than a year ago.
 The company has implemented several flexible payment programs and is actively
 pursuing collection of past due amounts.
     "We are pleased with the results from our gas distribution business
 despite challenging circumstances and with the continuing growth from our
 diversified business segments," said Richard E. Terry, chairman and chief
 executive officer.  "We are reaffirming our earlier fiscal 2001 earnings
 estimate of $3.05 to $3.15 per share, assuming normal weather and planned
 utility performance for the rest of the year.  The South Texas oil and gas
 property acquisition that we announced today will add $.10 to $.15 per share
 to that projection."
     Peoples Energy reported second quarter and fiscal year-to-date results for
 its primary business segments:
     Gas Distribution. Operating income was $101.6 million for the second
 quarter and $180.0 million for the six month period, as compared to
 $98.9 million and $156.3 million, respectively, in the prior year.  The
 increases were mainly due to colder weather, reduced depreciation expense, and
 the positive effects of pension benefit accounting, offset by increases in the
 provision for uncollectible accounts and customer conservation resulting from
 higher gas costs in the current periods.
 
     Power Generation. Operating income and equity investment income grew to
 $5.6 million and $6.0 million for the current quarter and fiscal year-to-date
 periods compared with $572,000 and $3.9 million, respectively, in the previous
 fiscal year.   These increases of $5.0 million and $2.1 million, respectively,
 are primarily due to a gain on the liquidation of financial hedges associated
 with Elwood's gas supply requirements and increased capacity revenues during
 the second quarter, offset in part by higher gas costs in both current
 periods.  Effective March 1, 2001, the power sales contracts on the Phase I
 Elwood units were restructured as tolling agreements.
 
     Midstream Services.  Operating income and equity investment income was
 $5.0 million and $10.6 million for the current quarter and six month periods,
 compared to $5.8 million and $8.1 million, respectively in the year-ago
 comparable periods.  Results in the current periods were positively impacted
 by equity income from our enovate partnership with Enron, offset by lower
 operating income from hub and peaking activities.  Operating income from
 wholesale activities benefited in the prior periods from a nonrecurring
 pipeline construction project.
 
 Retail Energy Services.  Operating income in the second quarter grew to
 $2.2 million, an increase of $2.3 million over the year-ago period.  Fiscal
 year-to-date results reflect an increase of $1.9 million over the prior period
 loss of $1.6 million.  The current periods benefited from increased gas and
 electric  margins, partially offset by higher operating expenses related to
 growth.  Both current periods also benefited from a one-time change in
 inventory accounting methods.
 
     Oil and Gas Production.  Operating income and equity investment income was
 $2.8 million and $6.6 million for the current three and six month periods, up
 from $1.7 million and $2.7 million, respectively, in last year's comparable
 periods.  These increases were primarily due to the impact of reserve
 acquisitions subsequent to the year-ago periods, positive results from
 drilling programs and higher sales prices on production volumes.  The most
 recent six month period reflects increased equity income from our EnerVest
 partnership.
 
     In addition to the above business segment operating results, net income
 for the current periods reflect higher financing costs resulting from
 long-term debt issued to fund diversified growth and short-term debt incurred
 for utility working capital needs, offset by lower interest on utility
 long-term debt due to prior-year refinancing.  The current six month period
 reflects the mark-to-market pricing of unrealized liabilities for stock
 appreciation rights granted to certain employees under the company's long-term
 incentive compensation plan.
     Peoples Energy is a diversified energy company comprised of five primary
 business segments: Gas Distribution, Power Generation, Midstream Services,
 Retail Energy Services, and Oil and Gas Production.  The Gas Distribution
 business serves about 1 million retail customers in Chicago and northeastern
 Illinois.  Visit the Peoples Energy web site at PeoplesEnergy.com .
 
     Forward-Looking Information.  This press release contains forward-looking
 statements within the meaning of Section 27A of the Securities Act of 1933 and
 Section 21E of the Securities Exchange Act of 1934, such as expectations of
 development and growth arising out of the company's diversified energy
 businesses.  Actual results could differ materially from such expectations
 because of many uncertainties, including, but not limited to: the company's
 success in identifying diversified energy opportunities on financially
 acceptable terms and generating earnings within a reasonable time; adverse
 resolution of material litigation; developments in the company's utility
 subsidiaries' mercury inspection and remediation program; general U.S. and
 Illinois economic conditions; business and competitive conditions resulting
 from deregulation and consolidation of the energy industry; the timing and
 extent of changes in energy commodity prices and interest rates; and
 regulatory developments in the U.S., Illinois and other states where Peoples
 Energy has business activities.  Some of the uncertainties that may affect
 future results are discussed in more detail under "Item 1 - Business" of
 Peoples Energy's Form 10-K for the year ended September 30, 2000.  All
 forward-looking statements included in this press release are based upon
 information presently available, and Peoples Energy assumes no obligation to
 update any forward-looking statements.
 
 
                           PEOPLES ENERGY CORPORATION
                              FINANCIAL HIGHLIGHTS
                                  (Unaudited)
 
 
                                                  Three Months Ended March 31,
 
                                                     2001              2000
 
     Total Operating Revenues                  $1,073,789,000     $525,248,000
 
     Operating Income                            $102,370,000     $102,254,000
 
     Equity Investment Income                     $11,006,000       $1,972,000
 
     Net Income                                   $62,491,000      $57,428,000
 
     Earnings Per Share                                 $1.77            $1.62
 
     Diluted Earnings Per Share                         $1.76            $1.62
 
     Basic Average Shares Outstanding              35,388,000       35,510,000
 
     Dilutive Average Shares Outstanding           35,450,000       35,511,000
 
 
                                                   Six Months Ended March 31,
 
                                                     2001              2000
 
     Total Operating Revenues                  $1,790,771,000     $937,146,000
 
     Operating Income                            $173,000,000     $155,928,000
 
     Equity Investment Income                     $15,804,000       $6,050,000
 
     Net Income                                   $98,848,000      $86,999,000
 
     Earnings Per Share                                 $2.80            $2.45
 
     Diluted Earnings Per Share                         $2.79            $2.45
 
     Basic Average Shares Outstanding              35,363,000       35,512,000
 
     Dilutive Average Shares Outstanding           35,414,000       35,517,000
 
 
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SOURCE Peoples Energy
    CHICAGO, April 27 /PRNewswire/ -- Peoples Energy (NYSE:   PGL) reported
 today that its second quarter earnings for the three month period ended
 March 31, 2001 were $62.5 million, or $1.77 per share, up from $57.4 million,
 or $1.62 per share for the same period a year ago.  For the most recent six
 month period, earnings were $98.8 million or $2.80 per share, compared to
 $87.0 million, or $2.45 per share for the same period last year.
     Quarterly and fiscal year-to-date results were positively impacted by
 weather that was colder than the prior year periods by 19% and 23%,
 respectively, offset by the negative impact of gas prices that were at record
 levels.  The combined effect of these two factors is reflected in current
 accounts receivable balances, which are significantly higher than a year ago.
 The company has implemented several flexible payment programs and is actively
 pursuing collection of past due amounts.
     "We are pleased with the results from our gas distribution business
 despite challenging circumstances and with the continuing growth from our
 diversified business segments," said Richard E. Terry, chairman and chief
 executive officer.  "We are reaffirming our earlier fiscal 2001 earnings
 estimate of $3.05 to $3.15 per share, assuming normal weather and planned
 utility performance for the rest of the year.  The South Texas oil and gas
 property acquisition that we announced today will add $.10 to $.15 per share
 to that projection."
     Peoples Energy reported second quarter and fiscal year-to-date results for
 its primary business segments:
     Gas Distribution. Operating income was $101.6 million for the second
 quarter and $180.0 million for the six month period, as compared to
 $98.9 million and $156.3 million, respectively, in the prior year.  The
 increases were mainly due to colder weather, reduced depreciation expense, and
 the positive effects of pension benefit accounting, offset by increases in the
 provision for uncollectible accounts and customer conservation resulting from
 higher gas costs in the current periods.
 
     Power Generation. Operating income and equity investment income grew to
 $5.6 million and $6.0 million for the current quarter and fiscal year-to-date
 periods compared with $572,000 and $3.9 million, respectively, in the previous
 fiscal year.   These increases of $5.0 million and $2.1 million, respectively,
 are primarily due to a gain on the liquidation of financial hedges associated
 with Elwood's gas supply requirements and increased capacity revenues during
 the second quarter, offset in part by higher gas costs in both current
 periods.  Effective March 1, 2001, the power sales contracts on the Phase I
 Elwood units were restructured as tolling agreements.
 
     Midstream Services.  Operating income and equity investment income was
 $5.0 million and $10.6 million for the current quarter and six month periods,
 compared to $5.8 million and $8.1 million, respectively in the year-ago
 comparable periods.  Results in the current periods were positively impacted
 by equity income from our enovate partnership with Enron, offset by lower
 operating income from hub and peaking activities.  Operating income from
 wholesale activities benefited in the prior periods from a nonrecurring
 pipeline construction project.
 
 Retail Energy Services.  Operating income in the second quarter grew to
 $2.2 million, an increase of $2.3 million over the year-ago period.  Fiscal
 year-to-date results reflect an increase of $1.9 million over the prior period
 loss of $1.6 million.  The current periods benefited from increased gas and
 electric  margins, partially offset by higher operating expenses related to
 growth.  Both current periods also benefited from a one-time change in
 inventory accounting methods.
 
     Oil and Gas Production.  Operating income and equity investment income was
 $2.8 million and $6.6 million for the current three and six month periods, up
 from $1.7 million and $2.7 million, respectively, in last year's comparable
 periods.  These increases were primarily due to the impact of reserve
 acquisitions subsequent to the year-ago periods, positive results from
 drilling programs and higher sales prices on production volumes.  The most
 recent six month period reflects increased equity income from our EnerVest
 partnership.
 
     In addition to the above business segment operating results, net income
 for the current periods reflect higher financing costs resulting from
 long-term debt issued to fund diversified growth and short-term debt incurred
 for utility working capital needs, offset by lower interest on utility
 long-term debt due to prior-year refinancing.  The current six month period
 reflects the mark-to-market pricing of unrealized liabilities for stock
 appreciation rights granted to certain employees under the company's long-term
 incentive compensation plan.
     Peoples Energy is a diversified energy company comprised of five primary
 business segments: Gas Distribution, Power Generation, Midstream Services,
 Retail Energy Services, and Oil and Gas Production.  The Gas Distribution
 business serves about 1 million retail customers in Chicago and northeastern
 Illinois.  Visit the Peoples Energy web site at PeoplesEnergy.com .
 
     Forward-Looking Information.  This press release contains forward-looking
 statements within the meaning of Section 27A of the Securities Act of 1933 and
 Section 21E of the Securities Exchange Act of 1934, such as expectations of
 development and growth arising out of the company's diversified energy
 businesses.  Actual results could differ materially from such expectations
 because of many uncertainties, including, but not limited to: the company's
 success in identifying diversified energy opportunities on financially
 acceptable terms and generating earnings within a reasonable time; adverse
 resolution of material litigation; developments in the company's utility
 subsidiaries' mercury inspection and remediation program; general U.S. and
 Illinois economic conditions; business and competitive conditions resulting
 from deregulation and consolidation of the energy industry; the timing and
 extent of changes in energy commodity prices and interest rates; and
 regulatory developments in the U.S., Illinois and other states where Peoples
 Energy has business activities.  Some of the uncertainties that may affect
 future results are discussed in more detail under "Item 1 - Business" of
 Peoples Energy's Form 10-K for the year ended September 30, 2000.  All
 forward-looking statements included in this press release are based upon
 information presently available, and Peoples Energy assumes no obligation to
 update any forward-looking statements.
 
 
                           PEOPLES ENERGY CORPORATION
                              FINANCIAL HIGHLIGHTS
                                  (Unaudited)
 
 
                                                  Three Months Ended March 31,
 
                                                     2001              2000
 
     Total Operating Revenues                  $1,073,789,000     $525,248,000
 
     Operating Income                            $102,370,000     $102,254,000
 
     Equity Investment Income                     $11,006,000       $1,972,000
 
     Net Income                                   $62,491,000      $57,428,000
 
     Earnings Per Share                                 $1.77            $1.62
 
     Diluted Earnings Per Share                         $1.76            $1.62
 
     Basic Average Shares Outstanding              35,388,000       35,510,000
 
     Dilutive Average Shares Outstanding           35,450,000       35,511,000
 
 
                                                   Six Months Ended March 31,
 
                                                     2001              2000
 
     Total Operating Revenues                  $1,790,771,000     $937,146,000
 
     Operating Income                            $173,000,000     $155,928,000
 
     Equity Investment Income                     $15,804,000       $6,050,000
 
     Net Income                                   $98,848,000      $86,999,000
 
     Earnings Per Share                                 $2.80            $2.45
 
     Diluted Earnings Per Share                         $2.79            $2.45
 
     Basic Average Shares Outstanding              35,363,000       35,512,000
 
     Dilutive Average Shares Outstanding           35,414,000       35,517,000
 
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X86138293
 
 SOURCE  Peoples Energy