It is a dynamic era that requires keen attention to the market and rapid response to market shifts. It is an era in which utilities need to stop talking about being energy companies and take the steps necessary to become aggressive marketers to meet the needs of their customers.
For KeySpan, 1999 was a year of corporate soul-searching. We had to face the fact that competition is real and the players in the market today may not be here tomorrow. We needed to refocus our vision, our assets, our structure. From that process came a refined KeySpan strategy for growth in the 21st century. The strategy is really quite simple – continue to increase the scope of the customer base and build upon the assets we already own to sell those customers more products and services.
Today, KeySpan is uniquely positioned for growth in our target markets. I am pleased to be able to share with you just how and why I believe KeySpan will be a major energy force in the Northeast.
But before we talk about the future, let’s take a look at our 1999 performance. KeySpan’s financial results in 1999 were strong, a fact that makes our stock performance difficult to understand. Earnings per share increased to $1.62, exceeding original estimates, and we reaffirmed the dividend at its current level. The high yield combined with strong earnings per share translates to very positive total returns – a projected 17 percent over the next three years compared to 10 percent for the best of our competitors, according to First Call estimates.
|
In November, we announced an agreement to acquire Eastern Enterprises, an investment that will significantly increase our customer base, making KeySpan the largest gas company in the Northeast. Eastern’s service territory, like our Long Island market, has a low penetration of natural gas. The two areas combined give KeySpan a market with one of the highest growth potentials in the nation.
We also increased our electric generating capacity with our purchase of the Ravenswood facility, an investment that was immediately accretive to earnings. And we achieved more than $100 million in synergy savings from the Brooklyn Union/LILCO merger ahead of schedule.
KeySpan is building a strong position in increasingly profitable markets. We are creating solid, customer-focused models that build on key assets and competencies to provide energy and a full menu of services to customers. KeySpan’s challenge in 2000 is to tell our story and have the performance to back it up. We need to demonstrate how our new company creates value for investors and will be the model against which other energy companies will be measured. We can’t just say we will be the leading energy company in the Northeast – we need to prove it.
How do we do that? First, by refocusing our strategy on growth in our core businesses.
|
