Aquila Reports Third Quarter Loss, Suspends Dividend to Support Ongoing Transition Plan and Receives Interest Coverage Waiver From Lenders; CEO Green Says Liquidity is Sufficient.Business Editors KANSAS CITY Kansas City, two adjacent cities of the same name, one (1990 pop. 149,767), seat of Wyandotte co., NE Kansas (inc. 1859), the other (1990 pop. 435,146), Clay, Jackson, and Platte counties, NW Mo. (inc. 1850). , Mo.--(BUSINESS WIRE)--Nov. 13, 2002 Tomorrow's Conference Call and Webcast Set for 9:00 a.m. Eastern Time Aquila Aquila, in the Bible Aquila (ăk`wĭlə, əkwĭl`ə), in the New Testament, Christian of Jewish origin from Pontus who lived at Rome. He and his wife, Prisca or Priscilla, were friendly to Paul. , Inc. (NYSE NYSE See: New York Stock Exchange : ILA ILA abbr. insulinlike activity ) today reported a fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. loss of $1.85 per share for the 2002 third quarter, compared to diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of $.58 in the third quarter of 2001. Excluding non-recurring charges of $155.8 million after tax, and a loss from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. of $151.0 million after tax, the third quarter operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. was $.14 per fully diluted common share. For the nine months ended September September: see month. 30, 2002, the company reported a fully diluted loss of $7.17 per share, compared to earnings per share of $2.50 for the same period in 2001. As part of its ongoing transition plan, the company also announced today that its board of directors has suspended sus·pend v. sus·pend·ed, sus·pend·ing, sus·pends v.tr. 1. To bar for a period from a privilege, office, or position, usually as a punishment: suspend a student from school. the quarterly cash dividend on Aquila common stock for an undetermined period. The board reached this decision after the new management team completed a detailed analysis of the company's current financial condition. Suspension of the dividend is part of Aquila's strategy to achieve its goal of strengthening the credit profile of the company. "We plan to do more than simply survive," said Richard Ri·chard , Joseph Henri Maurice Known as "Rocket." 1921-2000. Canadian hockey player. A right wing for the Montreal Canadiens (1942-1960), he led his team to eight Stanley Cup championships and was the first player to score 50 goals in a C. Green, Jr., chairman, president and chief executive officer. "Aquila's liquidity is sufficient to ensure that Aquila can continue to operate safe and reliable utility networks and maintain quality customer service. This remains a healthy core business." Green summarized third quarter results by saying Aquila's core domestic and international networks contributed more than they did a year earlier, while the company continued to bear the costs of exiting the troubled energy trading sector. "The third quarter and the year as a whole have been a disaster for Aquila as well as for our industry," said Green. "Exiting the wholesale energy trading business, writing down assets, reducing the workforce by approximately 1,600 employees, cutting and then suspending the dividend all have caused our shareholders and employees a great deal of pain. "The aggressive restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). we began six months ago is designed to position Aquila for the future. With the exit from the trading business largely behind us," he said, "we can now focus on the next critical phase of our transition -- the restructuring or termination of our tolling contracts on terms mutually acceptable to us and our counterparties Counterparties The parties on either side of an interest rate swap or a currency, equity or commodity swap, or to an options or futures position. ." As Aquila works to complete its transition to being an integrated utility, it expects to record significant charges during this year's fourth quarter related to renegotiation of contracts, the continued exit from wholesale commodity positions, additional severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when costs and possible additional asset impairments. "The largest factor affecting operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before going forward is low power prices resulting from lower demand during the economic downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. and the current over-supply of generating capacity," Green said. Global Networks Third quarter EBIT EBIT See: Earnings Before Interest and Taxes EBIT See earnings before interest and taxes (EBIT). for Global Networks was $92.8 million, compared to $93.9 million in the same period of 2001. Results for the 2002 quarter included a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. charge of $5.2 million for a loss on the sale of shares in Quanta quan·ta n. Plural of quantum. Services, Inc. (NYSE: PWR PWR pressurized-water reactor Noun 1. PWR - a nuclear reactor that uses water as a coolant and moderator; the steam produced can drive a steam turbine pressurized water reactor ) and a $3.0 million gain on the sale of Aquila's interest in the Pulse energy marketing joint venture in Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. . Excluding those non-recurring items, operating EBIT was up $1.1 million compared to a year earlier. The majority of this increase reflects the May 2002 acquisition of Midlands Electricity The Midlands Electricity Board was formed in 1947, under the Electricity Act of that year. The counterpart of the East Midlands board, it served southern, and western parts of Warwickshire, as well as the counties of Worcestershire, Herefordshire, Shropshire, and Staffordshire, as in the United Kingdom and suspension of Aquila's incentive plans in 2002. Domestic Networks Third quarter EBIT from Domestic Networks was $32.0 million, compared to $45.0 million in the 2001 quarter. The operations benefited from lower expenses resulting from staff reductions, the suspension of Aquila's incentive plans and the non-amortization of goodwill effective January January: see month. 1, 2002. These were more than offset by the loss on the sale of Quanta shares, Quanta's lower earnings during the quarter and reduced power sales to Western markets. International Networks International Networks provided EBIT of $60.8 million for the third quarter compared to $48.9 million for the same period in 2001. The increase primarily reflects $16.7 million contributed by Midlands Electricity in the United Kingdom, which Aquila acquired in May 2002, and the non-amortization of goodwill effective January 1, 2002. These positive factors were offset by a reduced level of carrying cost Noun 1. carrying cost - the opportunity cost of unproductive assets; the expense incurred by ownership carrying charge opportunity cost - cost in terms of foregoing alternatives recovery on deferred purchased power balances in Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of . Merchant Services Merchant services is the name given in the United States to a broad category of financial services intended for use by businesses. In its most specific use, it usually refers to the service that enables a business to accept a transaction payment by use of the customer's credit or Merchant Services had a third quarter loss before interest and taxes of $282.1 million, compared to earnings before interest and taxes In financial and business accounting, earnings before interest and taxes (EBIT) is a measure of a firm's profitability that excludes interest and income tax expenses.[1] EBIT = Operating Revenue – Operating Expenses + Non-operating Income of $36.6 million in the 2001 quarter. Approximately $215.8 million of this variance The discrepancy between what a party to a lawsuit alleges will be proved in pleadings and what the party actually proves at trial. In Zoning law, an official permit to use property in a manner that departs from the way in which other property in the same locality relates to non-recurring items. The rest of the decrease, approximately $102.9 million, was due primarily to the company's exit from wholesale energy trading operations. Capacity Services Capacity Services had a loss before interest and taxes of $40.8 million for the quarter compared to EBIT of $13.3 million a year earlier. One-time charges accounted for $34.9 million of the variance. The other main factors impacting the quarter were lower power prices and "spark spreads Spark Spread The difference between the market price of electricity and its cost of production. Notes: This measure is important because it helps utility companies determine their bottom line (profit). " (the difference between the price of power and the fuel cost for its generation) compared to levels experienced in 2001 and higher capacity payments for tolls and synthetic leases Synthetic Lease An operating lease that is structured in a way so that it is not recorded as a liability on the balance sheet. Instead, it is considered to be an expense on the income statement. that allow Aquila to generate power at plants owned by others. Currently the company has obligations to pay approximately $118.2 million annually under long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. , fixed capacity contracts or leases. With relatively low prices for power and high prices for natural gas expected to continue through 2003, the current economics make it unlikely that Aquila can sell power to recover these capacity payments. For the foreseeable fore·see tr.v. fore·saw , fore·seen , fore·see·ing, fore·sees To see or know beforehand: foresaw the rapid increase in unemployment. future, the company does not expect this business unit to be profitable. It is essential that the company renegotiate re·ne·go·ti·ate tr.v. re·ne·go·ti·at·ed, re·ne·go·ti·at·ing, re·ne·go·ti·ates 1. To negotiate anew. 2. To revise the terms of (a contract) so as to limit or regain excess profits gained by the contractor. the structure of certain contracts, including its tolling agreements. Non-Recurring Charges Non-recurring charges in the 2002 third quarter are primarily related to impairments resulting from asset sales, losses in connection with winding down the wholesale trading book Trading Book The portfolio of financial instruments held by a brokerage or bank. The financial instruments in the trading book are purchased or sold to facilitate trading for their customers, to profit from spreads between the bid/ask spread, or to hedge against various types of , and the exit from wholesale energy trading businesses. There were no non-recurring charges in the 2001 third quarter. The non-recurring items affecting the comparison of the 2002 and 2001 third quarters and their impact on earnings before income and taxes (EBIT) are as follows:
Non-Recurring Items in the 2002 Third Quarter
----------------------------------------------------------------------
In millions
Wholesale trading losses related to exit from trading $(70.8)
Severance costs and retention payments (42.3)
Provision for excess lease costs (36.7)
Write-down on leaseholds and equipment (36.4)
Loss on exit from gas storage investment (21.9)
Termination of Cogentrix acquisition (12.2)
Loss on sale of Quanta shares (5.2)
Other (.5)
----------------------------------------------------------------------
Total $(226.0)
======================================================================
Asset Sales In an effort to improve its balance sheet and credit ratings, in this year's second quarter Aquila targeted the sale of approximately $1 billion in non-strategic assets. Its announced agreements to sell assets are listed below. The transactions closed to date total $796.6 million.
After-tax
Net Gain
Aquila Asset Sales As of November 13, 2002 Proceeds (Loss)
----------------------------------------------------------------------
Completed: In millions
UnitedNetworks (New Zealand distribution utility) $362.0 $28.0
Natural gas pipeline and processing assets 265.0 (156.0)
Quanta Services stock (open market and
private sales) 44.0 (5.2)
Lockport, NY power project 37.5 (5.3)
U.K. gas storage assets 34.9 (1.8)
Development loan 30.5 --
Other businesses and assets 22.7 (3.8)
----------------------------------------------------------------------
Subtotal 796.6 $(144.1)
Pending:
Texas gas storage assets 180.0
----------------------------------------------------------------------
Total asset sales closed or pending $976.6
======================================================================
Aquila also is in the process of carrying out a formal bid process to sell its 79.9 percent interest in Midlands Electricity. If a satisfactory bid is received, the sale is likely to be completed early in the first quarter of 2003. Interest Coverage Ratio and Asset Sale Consents As a result of this year's operating performance, the winding down of merchant energy businesses and the asset sales program, Aquila does not expect to be in compliance with an interest coverage requirement contained in certain financial arrangements until at least December December: see month. 31, 2003. Aquila has obtained a waiver The voluntary surrender of a known right; conduct supporting an inference that a particular right has been relinquished. The term waiver is used in many legal contexts. from this requirement that will expire expire /ex·pire/ (ek-spi´er) 1. to exhale. 2. to die. ex·pire v. 1. To breathe one's last breath; die. 2. To exhale. on April 12, 2003. As part of this process, Aquila has agreed to make certain payments to the financial institutions, to limit its dividends, to have lower borrowing capacity under its revolving credit agreements Revolving credit agreement A legal commitment in which a bank promises to lend a customer up to a specified maximum amount during a specified period. revolving credit agreement See line of credit. , and to use reasonable efforts to obtain the approvals that would allow it to pledge its domestic regulated reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. assets as collateral collateral (kəlăt`ərəl), something of value given or pledged as security for payment of a loan. Collateral consists usually of financial instruments, such as stocks, bonds, and negotiable paper, rather than physical goods, although . Aquila must renegotiate its bank financing arrangements prior to the waiver's expiration EXPIRATION. Cessation; end. As, the expiration of, a lease, of a contract, or statute. 2. In general, the expiration of a contract puts an end to all the engagements of the parties, except to those which arise from the non- fulfillment of obligations created . Loss from Discontinued Operations As a result of the sale of the gas gathering, processing and pipeline operations and the gas storage assets, Aquila's results from those operations have been reclassified for financial reporting purposes as "Discontinued Operations." This conforms to a new accounting standard which became effective this year. Due to this reclassification Reclassification The process of changing the class of mutual funds once certain requirements have been met. These requirements are generally placed on load mutual funds. Reclassification is not considered to be a taxable event. , the operating results of these businesses have been segregated from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the , including a $236.6 million pretax loss pretax loss A loss reported before tax benefits are considered. on the sale of the gas gathering, processing and pipeline operations. The loss from discontinued operations for the third quarter of 2002 was $229.5 million before income taxes, or $151.0 million after tax, compared to earnings from discontinued operations of $6.4 million before taxes, or $4.1 million after taxes, for the same period of 2001. Accounting for Energy Trading Contracts New accounting standards affecting the reporting of gains or losses on energy trading contracts became effective in the 2002 third quarter, requiring such contracts to be reported to be spoken of; to be mentioned, whether favorably or unfavorably. See also: Report on a net basis in the income statement. Adopting this standard also required reclassifying sales and cost of sales for the third quarter and all prior periods. This reclassification had no impact on gross profit. Reaudit of 2000 and 2001 As a result of the reclassification related to the discontinued operations and the reclassification of sales and cost of sales, combined with the demise Death. A conveyance of property, usually of an interest in land. Originally meant a posthumous grant but has come to be applied commonly to a conveyance that is made for a definitive term, such as an estate for a term of years. of Arthur Andersen For the U.S. Supreme Court case commonly known as Arthur Andersen, see . Arthur Andersen LLP, based in Chicago, was once one of the "Big Five" accounting firms (the other four are PricewaterhouseCoopers, Deloitte Touche Tohmatsu, Ernst & Young and KPMG), performing LLP LLP - Lower Layer Protocol , the company's former outside auditing firm, Aquila is required to have its financial statements for the years ended December 31, 2000 and 2001 reaudited by KPMG KPMG Klynveld Peat Marwick Goerdeler (accounting firm) KPMG Kaiser Permanente Medical Group KPMG Keiner Prüft Mehr Genau (German) KPMG Kommen Prüfen Meckern Gehen LLP, which was named Aquila's independent auditor Independent Auditor An external auditor with a certified public accounting designation that qualifies him or her to provide an auditor's report. Notes: These auditors aren't affiliated with the company being audited. in May 2002. Aquila does not anticipate any changes to its audited 2000 and 2001 financial statements filed with its Form 10-K/A on August 14, 2002, except the reclassifications necessary to reflect the discontinuation dis·con·tin·u·a·tion n. A cessation; a discontinuance. Noun 1. discontinuation - the act of discontinuing or breaking off; an interruption (temporary or permanent) discontinuance of certain operations and reclassification of sales and cost of sales. The reaudit is expected to be completed in early 2003. Conference Call, Webcast and Additional Information Aquila will host a conference call and webcast tomorrow at 9:00 a.m. Eastern Time in which senior executives will review third quarter results. Participants will be Chief Executive Officer Richard C. Green, Jr., Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. Keith Keith may refer to: People with the given name Keith:
n. See hellgrammite. [Probably from the name Dobson.] Noun 1. dobson - large brown aquatic larva of the dobsonfly; used as fishing bait hellgrammiate , who will become interim chief financial officer on November November: see month. 20. To access the live webcast via the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the , go to Aquila's website at www.aquila.com and click on the link to the webcast. Listeners should allow at least five minutes to register and access the presentation. For those unable to listen to the live broadcast, replays will be available for two weeks, beginning approximately two hours after the presentation. Web users can use the same access method outlined above. Replay will also be available by telephone through November 21 at 800-405-2236 in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , and at 303-590-3000 for international callers. Callers must enter the access code 466651 when prompted. Additional supplemental information including income statements by business segment, consolidated cash flow statement, consolidated balance sheet consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm. and statistical information is available at www.aquila.com. Click on "Investors" near the top of the screen, then "Financial Performance" at left. Based in Kansas City, Missouri Kansas City is the largest city in the state of Missouri. It encompasses parts of Jackson, Clay, Cass, and Platte counties and is the anchor city of the Kansas City Metropolitan Area, the second largest in Missouri, which includes counties in both Missouri and Kansas. , Aquila operates electricity and natural gas distribution networks serving customers in seven states and in Canada, the United Kingdom, and Australia. The company also owns and operates power generation assets. At September 30, 2002, Aquila had total assets of $10.7 billion. More information is available at www.aquila.com. "Operating" Results Aquila uses the term "operating EBIT" to describe its recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. earnings before interest and taxes excluding items deemed to be non-recurring. The term is not meant to replace actual EBIT or earnings per share, or be considered as an alternative to net income or cash flows from operating activities, which are determined in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting , as an indicator of operating performance or as a measure of liquidity, or other performance measures used under generally accepted accounting principles. In addition, the term may not be comparable to similarly titled measures used by other companies.
AQUILA, INC.
Consolidated Condensed Statements of Income -- As Reported
3 Months Ended 9 Months Ended
Sept. 30 Sept. 30
In millions, except per share 2002 2001 2002 2001
----------------------------------------------------------------------
Sales $576.5 $804.0 $2,067.3 $3,084.5
Cost of sales 448.2 482.7 1,289.6 1,743.5
----------------------------------------------------------------------
Gross profit 128.3 321.3 777.7 1,341.0
----------------------------------------------------------------------
Operating expenses 202.5 198.2 614.9 765.1
Restructuring charges 116.2 -- 188.0 --
Impairment charges and loss on asset
sales 39.0 -- 933.6 --
Depreciation and amortization expense 54.3 64.0 162.1 184.6
----------------------------------------------------------------------
Total operating expenses 412.0 262.2 1,898.6 949.7
Equity in earnings of investments 60.1 47.5 128.5 100.4
Minority interest 2.4 (6.5) 6.5 (20.1)
Other income 19.4 31.0 47.0 66.0
Gain on sale of subsidiary stock -- -- -- 110.8
----------------------------------------------------------------------
Earnings (loss) before interest and
taxes (201.8) 131.1 (938.9) 648.4
----------------------------------------------------------------------
Total interest expense 73.0 50.7 178.5 169.7
Income tax expense (benefit) (94.2) 15.6 (168.8) 200.5
----------------------------------------------------------------------
Earnings (loss) from continuing
operations (180.6) 64.8 (948.6) 278.2
Earnings (loss) from discontinued
operations, net of tax (151.0) 4.1 (148.6) 7.4
----------------------------------------------------------------------
Net income (loss) $(331.6) $68.9$(1,097.2) $285.6
======================================================================
Weighted average shares
outstanding - diluted (a) 179.6 118.7 153.1 114.4
----------------------------------------------------------------------
Earnings (loss) per share from
continuing operations - diluted $(1.01) $.55 $(6.20) $2.43
Earnings (loss) per share from
discontinued operations - diluted (.84) .03 (.97) .07
----------------------------------------------------------------------
Net income (loss) per
share - diluted $(1.85) $.58 $(7.17) $2.50
======================================================================
(a) Average shares outstanding increased for the 2002 periods due to
the issuance of 12.6 million common shares in the January 2002
exchange offer for Aquila Merchant Services, the issuance of
another 12.5 million shares in January 2002 and 37.5 million
shares in July 2002.
AQUILA, INC.
Reconciliation of Operating and Reported
Earnings Before Interest and Taxes (EBIT)
Quarter Ended September 30, 2002
--------------------------------
Non-
recurring
In millions Reported Items Operating
----------------------------------------------------------------------
Merchant Services:
Wholesale Services $(241.3) $180.9 $(60.4)
Capacity Services (40.8) 34.9 (5.9)
----------------------------------------------------------------------
Total Merchant Services (282.1) 215.8 (66.3)
Global Networks:
International Networks 60.8 (3.0) 57.8
Domestic Networks:
Utilities 50.2 -- 50.2
Quanta Services (10.1) 5.2 (4.9)
Communications (8.1) -- (8.1)
----------------------------------------------------------------------
Total Domestic Networks 32.0 5.2 37.2
----------------------------------------------------------------------
Total Global Networks 92.8 2.2 95.0
Corporate and Other (12.5) 8.0 (4.5)
----------------------------------------------------------------------
Total EBIT $(201.8) $226.0 $ 24.2
======================================================================
Quarter Ended September 30, 2001
--------------------------------
Non-
recurring
In millions Reported Items Operating
----------------------------------------------------------------------
Merchant:
Wholesale Services $ 30.7 $ -- $ 30.7
Capacity Services 13.3 -- 13.3
Minority Interest (7.4) -- (7.4)
----------------------------------------------------------------------
Total Merchant 36.6 -- 36.6
Global Networks:
International Networks 48.9 -- 48.9
Domestic Networks:
Utilities 47.4 -- 47.4
Quanta Services 6.2 -- 6.2
Communications (8.6) -- (8.6)
----------------------------------------------------------------------
Total Domestic Networks 45.0 -- 45.0
----------------------------------------------------------------------
Total Global Networks 93.9 -- 93.9
Corporate and Other .6 -- .6
----------------------------------------------------------------------
Total EBIT $131.1 $ -- $131.1
======================================================================
AQUILA, INC.
Reconciliation of Operating and Reported
Earnings Before Interest and Taxes (EBIT)
9 Months Ended September 30, 2002
---------------------------------
Non-
recurring
In millions Reported Items Operating
----------------------------------------------------------------------
Merchant Services:
Wholesale Services $(394.6) $ 410.8 $ 16.2
Capacity Services (17.1) 35.5 18.4
----------------------------------------------------------------------
Total Merchant Services (411.7) 446.3 34.6
Global Networks:
International Networks 138.9 (3.0) 135.9
Domestic Networks:
Utilities 104.5 19.9 124.4
Quanta Services (700.5) 698.1 (2.4)
Communications (44.1) 23.1 (21.0)
----------------------------------------------------------------------
Total Domestic Networks (640.1) 741.1 101.0
----------------------------------------------------------------------
Total Global Networks (501.2) 738.1 236.9
Corporate and Other (26.0) 8.0 (18.0)
----------------------------------------------------------------------
Total EBIT $(938.9) $1,192.4 $253.5
======================================================================
9 Months Ended September 30, 2001
---------------------------------
Non-
recurring
In millions Reported Items Operating
----------------------------------------------------------------------
Merchant Services:
Wholesale Services $241.5 $ -- $241.5
Capacity Services 73.4 -- 73.4
Minority Interest (23.9) -- (23.9)
Gain on sale of subsidiary stock 110.8 (110.8) --
----------------------------------------------------------------------
Total Merchant Services 401.8 (110.8) 291.0
Global Networks:
International Networks 117.3 -- 117.3
Domestic Networks:
Utilities 138.5 -- 138.5
Quanta Services 19.0 -- 19.0
Communications (25.7) -- (25.7)
----------------------------------------------------------------------
Total Domestic Networks 131.8 -- 131.8
----------------------------------------------------------------------
Total Global Networks 249.1 -- 249.1
Corporate and Other (2.5) -- (2.5)
----------------------------------------------------------------------
Total EBIT $648.4 $(110.8) $537.6
======================================================================
AQUILA, INC.
Operating Earnings Before Interest and Taxes (EBIT)
Quarter Ended
September 30,
------------- Favorable
In millions, except per share 2002 2001 (Unfavorable)
----------------------------------------------------------------------
Merchant Services:
Wholesale Services $ (60.4) $ 30.7 $ (91.1)
Capacity Services (5.9) 13.3 (19.2)
Minority Interest -- (7.4) 7.4
----------------------------------------------------------------------
Total Merchant Services (66.3) 36.6 (102.9)
Global Networks:
International Networks 57.8 48.9 8.9
Domestic Networks:
Utilities 50.2 47.4 2.8
Quanta Services (4.9) 6.2 (11.1)
Communications (8.1) (8.6) .5
----------------------------------------------------------------------
Total Domestic Networks 37.2 45.0 (7.8)
----------------------------------------------------------------------
Total Global Networks 95.0 93.9 1.1
Corporate and Other (4.5) .6 (5.1)
----------------------------------------------------------------------
Total Operating EBIT 24.2 131.1 (106.9)
Non-recurring items, net (226.0) -- (226.0)
----------------------------------------------------------------------
Total Reported EBIT $(201.8) $131.1 $(332.9)
======================================================================
Diluted Earnings Per Share $(1.85) $ .58 $ (2.43)
======================================================================
AQUILA, INC.
Consolidated Condensed Balance Sheets--As Reported
Sept. 30, Dec. 31,
In millions 2002 2001
----------------------------------------------------------------------
ASSETS
Cash and cash equivalents $ 514.9 $ 262.9
Accounts receivable, net 2,063.4 2,926.8
Price risk management assets 350.0 824.4
Other current assets 981.7 778.5
----------------------------------------------------------------------
Total current assets 3,910.0 4,792.6
----------------------------------------------------------------------
Property, plant and equipment, net 2,993.2 2,907.8
Investments in unconsolidated subsidiaries 1,578.9 2,045.6
Price risk management assets 619.1 436.5
Other assets 1,164.0 1,147.4
Non-current assets of discontinued operations 412.6 618.4
----------------------------------------------------------------------
Total Assets $10,677.8 $11,948.3
======================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current maturities of long-term debt $ 546.9 $ 679.1
Short-term debt 597.5 548.6
Accounts payable 1,981.7 3,156.2
Price risk management liabilities 448.9 573.2
Other current liabilities 560.5 720.5
----------------------------------------------------------------------
Total current liabilities 4,135.5 5,677.6
----------------------------------------------------------------------
Long-term debt, net 2,423.5 1,747.9
Deferred income taxes and credits 414.2 347.9
Price risk management liabilities 1,004.4 929.3
Other liabilities 198.9 444.0
Company-obligated preferred securities 250.0 250.0
Common shareholders' equity 2,251.3 2,551.6
----------------------------------------------------------------------
Total Liabilities and Shareholders' Equity $10,677.8 $11,948.3
======================================================================
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