RRI Gains $17M After Restating, Revising Income for 2000-2002

Reliant Resources Inc. (RRI) increased its after-tax operations for 2000 through 2002 by $17 million after miscalculating hedge ineffectiveness in 2001 and 2002 and eliminating four previously disclosed natural gas swap transactions from 2000 and 2001 that should not have been recorded.

For 2000, RRI reported a $13 million increase, or 6%, to $223 million, compared with its previous report. Net income for 2001 as restated will be $563 million, or $2.03 a share, a 1% gain that added $6 million compared with the previous report. For 2001, RRI reported a loss before a cumulative effect of accounting changes, of $263 million, or 91 cents a share, reflecting a $2 million increase in the net loss for restatement and other accounting adjustments. RRI recognized a $482 million charge in the final quarter of 2002 after selling its European operations.

"The company believes the annual effects of the restatements and accounting adjustments on the after-tax results of operations are relatively modest, while the impacts in certain individual quarters were more significant," RRI said in a statement. RRI said it was preparing amended reports for filing with the Securities and Exchange Commission.

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