Aquila Third-Quarter Earnings Per Share Rise 37%, Reflecting Strong Client Services and Capacity Services.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. 5, 2001 Aquila, Inc. (NYSE NYSE See: New York Stock Exchange :ILA ILA abbr. insulinlike activity ) announced today third-quarter net income of $37.2 million, or $.37 per share, an increase of 37 percent over the prior year's third quarter earnings of $.27 per share, or $23 million of net income. 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 (EBIT EBIT See: Earnings Before Interest and Taxes EBIT See earnings before interest and taxes (EBIT). ) were $51.7 million, up 27 percent from $40.8 million a year earlier. Third-quarter sales increased 10 percent to $8.8 billion, up from $8.0 billion a year ago. "Aquila has demonstrated its ability to continue creating shareholder value during a variety of market cycles," said Robert K. Green, chairman of Aquila and president and 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. of UtiliCorp United (NYSE:UCU UCU University and College Union (UK) UCU Ucore Uranium Inc (stock symbol) UCU University College Utrecht (The Netherlands) UCU University Credit Union ), which owns approximately 80 percent of Aquila's outstanding common shares. "Our business model of partnering with clients continues to be validated val·i·date tr.v. val·i·dat·ed, val·i·dat·ing, val·i·dates 1. To declare or make legally valid. 2. To mark with an indication of official sanction. 3. through strong demand for our products," said Keith Stamm, Aquila's chief executive officer. "EBIT from our Client Services business increased 60 percent and the number of product sales increased by 48 percent. Outstanding execution, robust client demand and excellent asset management have been constant themes for us this year." Wholesale Services Aquila's Wholesale Services segment, consisting of the Commodity Services and Client Services businesses, had EBIT of $30.7 million, up $1.2 million from $29.5 million in last year's third quarter. The 2000 third quarter was the beginning of a robust, volatile commodity market that allowed Aquila to capture significant value within its Commodity Services business. As expected, gas and power commodity markets have settled down, clients have started to focus on how to minimize exposure to commodity risk and Aquila has seen an increase in its client-focused businesses. Commodity Services third-quarter EBIT declined $7.5 million to $7.4 million compared to $14.9 million in the 2000 third quarter. This decline was more than offset by the increased growth in Client Services, which saw EBIT increase 60 percent to $23.3 from $14.6 million in last year's period. Capacity Services Third-quarter EBIT from the Capacity Services segment was $21.0 million in 2001 compared to $11.3 million in 2000. Aquila acquired interests in six power plants in December 2000, when it purchased the assets of GPU GPU: see secret police. (Graphics Processing Unit) A specialized logic chip devoted to rendering 2D or 3D images. Display adapters contain one or more GPUs for fast graphics rendering. International. Operating results from those projects have continued to be stronger than expected. Aquila's operating portfolio of generation is approximately two-thirds hedged for the next two years and 50-percent hedged through 2008. In the 2001 quarter, Aquila acquired a high-performance, quick-cycle storage facility in Lodi, California Lodi (IPA: /ˈloʊdaɪ/ LOW-dye) is a city located in San Joaquin County, California. As of the 2000 census, the city had a population of 56,999. As of a 2005 estimate, the city had a population of 62,133. . When completed late this year, the facility will be able to store up to about 12 billion cubic feet of natural gas. With a planned injection rate of 400 million cubic feet per day (MMcf/d) and withdrawal rate of 500 MMcf/d, the facility will be able to cycle its inventory up to six times a year. By comparison, most existing storage facilities located in California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). can cycle only one to two times annually. Lodi Lodi, city, Italy Lodi (lô`dē), city (1991 pop. 42,250), Lombardy, N Italy, on the Adda River, near Milan. It is an important dairy and light industrial center. storage is expected to contribute to Capacity Services results in 2002. Webcast Aquila's chairman, chief executive officer and chief financial officer will discuss third-quarter results and full-year 2001 outlook on Monday, November 5, at 2:00 p.m. Eastern Time in a live webcast. To access the 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 "Investor Relations Investor relations The process by which the corporation communicates with its investors. " at the bottom of the screen, then click on "Webcasts" for the link to the live webcast. Listeners should allow 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 one hour after the presentation, using the same access method. Based in Kansas City, Aquila is one of the top wholesalers of electricity and natural gas in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , is an innovative provider of risk management products and services and owns and controls a diverse portfolio of merchant assets, including power plants, gas storage, pipeline, and processing facilities, and other complementary merchant infrastructure. Aquila also provides wholesale energy services in the United Kingdom, Scandinavia and Germany. Additional information is available at www.aquila.com. Aquila is an 80-percent-owned subsidiary of UtiliCorp United (NYSE:UCU), an international energy company with more than 4 million customers across the U.S. and in Canada, the U.K., New Zealand New Zealand (zē`lənd), island country (2005 est. pop. 4,035,000), 104,454 sq mi (270,534 sq km), in the S Pacific Ocean, over 1,000 mi (1,600 km) SE of Australia. The capital is Wellington; the largest city and leading port is Auckland. and Australia. "Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " Statement under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. including statements about our future financial performance and our projected business results. Naturally, all forward-looking statements involve risk and uncertainty and actual results or events could be materially different. Although Aquila believes that its expectations are based on reasonable assumptions, it can give no assurance that its goals will be achieved. Important factors that could cause actual results to differ include: unusual weather conditions; economic and financial market conditions, including changes in exchange rates, interest rates, and commodity prices; the success of our growth strategy; competition in the markets in which our businesses operate; and changes in applicable laws, regulations or rules governing gov·ern v. gov·erned, gov·ern·ing, gov·erns v.tr. 1. To make and administer the public policy and affairs of; exercise sovereign authority in. 2. energy, environmental, tax or accounting matters. In light of these risks, uncertainties, and assumptions, the forward-looking events discussed might not occur. Please review the company's registration statement on Form S-1, its latest quarterly report on Form 10-Q Form 10-Q See 10-Q. , any current reports on Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. and recent press releases for other important factors that could cause results to differ materially from those in any such forward-looking statements. Information in these archived materials may not be current and may be superseded by more recent information published by Aquila.
Aquila, Inc.
Financial Summary
Earnings Before Interest and Taxes (EBIT)
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Quarter Ended September 30, Favorable
---------------------------- (Unfavorable)
Dollars in millions 2001 2000
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EBIT:
Wholesale Services:
Commodity Services $ 7.4 $14.9 $(7.5)
Client Services 23.3 14.6 8.7
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Total Wholesale Services 30.7 29.5 1.2
Capacity Services 21.0 11.3 9.7
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Total EBIT $51.7 $40.8 $10.9
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Operating Statistics:
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Volumes delivered (Tbtue/d) 24.4 18.0 6.4
Transaction volume per
month (000's) 49.3 39.4 9.9
Capital funds committed
(millions) $122.6 $81.1 $41.5
Return on equity
(trailing 12 months) 45.3% 23.9%
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Aquila, Inc.
Combined Statements of Income
3 Months Ended Sept 30, 9 Months Ended Sept 30,
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In millions, except
per share 2001 2000 2001 2000
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Sales $8,792.2 $7,996.5 $29,677.2 $17,332.2
Cost of sales 8,678.6 7,910.2 28,977.0 17,034.9
Equity earnings 11.8 4.7 23.5 13.2
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Gross profit 125.4 91.0 723.7 310.5
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Administrative expenses 68.9 60.0 382.5 201.7
Depreciation and 18.0 10.6 44.4 34.6
amortization expense
Other income (13.2) (20.4) (34.0) (31.0)
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EBIT 51.7 40.8 330.8 105.2
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Interest expense .1 6.2 2.9 17.2
Income taxes 14.4 11.6 140.1 32.5
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Net Income $ 37.2 $ 23.0 $ 187.8 $ 55.5
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Weighted Average Shares 100.1 85.8 94.4 85.8
Outstanding -- Diluted
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Earnings Per Share --
Diluted $.37 $.27 $1.99 $.65
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