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Allegheny Energy falls in Fortune 500 rankings

April 01, 2003|by JULIE E. GREENE

julieg@herald-mail.com

Fortune Magazine released its top 500 list of publicly traded companies Monday and Allegheny Energy was still on the list - barely.

The utility was gone entirely from the Forbes "Super 500" list issued Friday.

Allegheny Energy Spokesman Guy Fletcher said Monday night the company wasn't disappointed that it had slipped in the rankings but was pleased to be on the list.

"It confirms that we're one of the largest companies in the U.S." Fletcher said. "To be on a list as prestigious as that, obviously we're very pleased."

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Allegheny Energy, like other energy trading companies, has been reeling in the last year following the collapse of Enron. Enron didn't make the Fortune 500 list this year.

Allegheny Energy officials announced in December that the utility had $334.4 million in losses for the first three quarters of 2002, due largely to overvaluing energy trading contracts.

In February, Allegheny avoided filing for bankruptcy by securing $2.4 billion in financing.

Alan Noia, Allegheny Energy Inc.'s chairman, president and chief executive officer since 1996, announced March 6 that he plans to retire from the debt-ridden utility when a successor is found.

Allegheny Energy fell from 185 to 496 on the 2003 Fortune 500 list, the second-biggest drop, according to the magazine. Aquila, which operates electricity and gas distribution networks in countries including the United States, dropped 444 notches from 33rd to 477th place, according to the magazine.

The list is based on revenue for the last fiscal year or, in Allegheny's case, for the four quarters ending Sept. 30, 2002.

Those numbers are expected to be revised because Allegheny officials announced they found errors in their financial statements for the first three quarters of 2002 and will be reissuing them. The company also has to issue its annual report for 2002.

Fortune listed Allegheny's revenue as $2.96 billion last year.

The list will not be revised after Allegheny issues its final financial reports, Fortune's Senior List Editor Mike Cacace wrote in an e-mail to The Herald-Mail.

Cacace wrote that Allegheny's sharp decline in revenues was partly because of an accounting change for energy trading transactions. Before 2002, those transactions were reported based on the gross value of the transaction. Since then, energy trading transactions are reported based on just the net gains of the trade.

Other power companies also faltered.

The median decline in revenues for energy-related companies last year was 75 percent, according to Fortune data, Cacace wrote.

Allegheny Energy dropped off Forbes' "Super 500" after being ranked at 214 last year, according to that magazine's Web site. Forbes ranked Allegheny Energy at 517 this year.

Forbes ranks companies by sales, profits, assets and market value.

Staff writer Tara Reilly contributed to this story.

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