Printer Friendly

PACIFICORP REPORTS FIRST-QUARTER EARNINGS

 PACIFICORP REPORTS FIRST-QUARTER EARNINGS
 PORTLAND, Ore, May 6 /PRNewswire/ -- PacifiCorp (NYSE: PPW) today


reported a first quarter 1992 net loss of $187 million, or 71 cents per share, on consolidated revenues of $945 million. The results include unusual noncash charges totaling $277 million after-tax or $1.05 per share. The charges primarily stem from carrying value reductions in certain assets of the company's oil and gas and financial services units.
 Consolidated revenues for the quarter declined 3 percent, or $31 million, to $945 million. A 4 percent improvement in Electric Operations' revenue was offset by declines in the Mining and Resource Development (NERCO) and Telecommunications (Pacific Telecom) segments. Financial Services' revenues for the quarter were also lower.
 Electric utility revenues rose $20 million, or 4 percent, to $585 million. A $26 million increase in sales to other utilities overcame weather-related sales reductions to retail customers. In general, temperatures in PacifiCorp's winter-peaking electric service territory were significantly above average, causing an overall 2 percent reduction in total retail kilowatt-hour sales. Both wholesale kilowatt-hour sales and revenues gained against the same period a year ago as a result of several new long-term firm power contracts and favorable conditions in the short-term energy markets.
 NERCO's revenues, excluding intercompany coal sales, declined 11 percent, or $21 million, to $165 million. First quarter 1991 revenues included $18 million associated with settling a coal contract dispute with a midwestern electric utility. Oil and gas revenues improved by $1 million reflecting a 35 percent increase in gas volume sold, primarily as a result of production associated with properties acquired in April 1991, largely offset by an 18 percent decline in effective gas sales prices. NERCO's revenue stream continues to be adversely affected by the low market prices for its natural resource commodities.
 Pacific Telecom's revenues declined $16 million, or 9 percent, to $166 million primarily as a result of lower sales of capacity on the North Pacific fiber optic cable. Cable capacity sales revenues were $2 million as compared to $19 million for the same period a year ago.
 Consolidated income from operations for the first quarter 1992 was a negative $188 million -- reflecting the impact of the unusual noncash charges related to asset carrying values.
 During the quarter, credit ratings at the company's subsidiaries were downgraded in part because natural gas prices fell to historically low levels. This necessitated a comprehensive review of the strategic objectives and capital structures of these subsidiaries. The quarter's unusual noncash charges resulted from these events and are consistent with the company's stated intent to consolidate operations, divest under-performing assets and control operating costs.
 Al Gleason, PacifiCorp chief executive officer and president, noted that the charges do not affect PacifiCorp's mainstay electric utility business or the telecommunications business. He reemphasized the company's commitment to electric utility operations as the heart of PacifiCorp, complemented by the energy resources businesses of NERCO and telecommunications operations of Pacific Telecom.
 At the PacifiCorp level, NERCO posted an after-tax, noncash charge to income of $145 million. PacifiCorp owns 82-percent of NERCO. Of the $145 million, $123 million was the result of net realizable value adjustments to proven and unproven oil and gas properties caused by the significant decline in natural gas prices since the beginning of the year. Also included in the $145 million is a $22 million reserve established in anticipation of selling selected coal assets and yet to be defined oil and gas assets. These asset sales are expected to occur before the end of 1992.
 In a separate action, NERCO has retained J.P. Morgan to assist with the evaluation of strategic alternatives for its precious metals business unit, including its possible sale. The ultimate outcome and financial effects from this process cannot be predicted at this time because NERCO is in the early stages of this process.
 In total, NERCO plans to raise in excess of $200 million through asset sales for the purposes of significantly reducing its level of debt, strengthening its capital structure and improving credit ratings.
 PacifiCorp also recorded a noncash charge of $132 million after- tax to reduce the carrying value of certain financial services assets and other assets held in the company's non-regulated units. These reductions in carrying value should facilitate the company's efforts to liquidate its underperforming assets. It is management's intent that PacifiCorp's financial services assets be no greater than 10 percent of consolidated total assets which stand at about $13 billion as of March 31, 1992.
 Electric utility earnings contribution for the quarter was $75 million, a decline of $24 million from the comparable period last year. Operating income for the segment was off $12 million or 6 percent. Weather-related decreases in retail sales and increased expense for purchased power and fuel offset the favorable effects of increased sales to other utilities and cost reductions at the electric utility's coal mining operations. Other expenses and income taxes increased $9 million and $2 million, respectively.
 Telecommunications earnings contribution for the quarter increased $3 million, or 17 percent, to $18 million. Income from operations at Telecommunications was off $10 million, or 23 percent, to $32 million. Offsetting the decline was an $8 million after-tax gain on the sale of a noncore investment net of the writedown of certain noncore assets.
 The consolidated net loss for the quarter was $180 million compared to income of $136 million for the same quarter a year ago. After giving effect to preferred dividends, the loss on common stock was $187 million.
 The average number of common shares outstanding for the quarter was 263.0 million, an increase of 9.2 million shares, or 4 percent, from 1991's level. The increased number of shares stems from new common stock issuances in conjunction with the dividend reinvestment and employee stock ownership plans as well as offerings to the public.
 PACIFICORP
 AND ITS CONSOLIDATED SUBSIDIARIES
 Three Months Ended March 31: 1992 1991
 Earnings per Common Share (based on
 average number of shares outstanding): ($0.71) $0.51
 Revenues (1):
 Electric Operations $585,000,000 $564,700,000
 Mining and Resource Development 165,000,000 206,000,000
 Intercompany Coal Sales 0 (19,900,000)
 Telecommunications 166,200,000 182,000,000
 Financial Services 28,800,000 42,800,000
 Total $945,000,000 $975,600,000
 Income (Loss) from Operations (1)(2):
 Electric Operations $195,900,000 $207,600,000
 Mining and Resource Development (269,700,000) 45,300,000
 Telecommunications 31,800,000 41,400,000
 Financial Services (146,000,000) (2,200,000)
 Total ($188,000,000) $292,100,000
 Net Income ($179,500,000) $136,000,000
 Earnings Contribution on Common Stock
 (after preferred dividend requirement)(1)(3):
 Electric Operations $75,300,000 $99,400,000
 Mining and Resource Development (145,800,000) 17,500,000
 Telecommunications 18,100,000 15,500,000
 Financial Services (103,200,000) 400,000
 Corporate (31,100,000) (3,300,000)
 Total ($186,700,000) $129,500,000
 Average Number of Common Shares 263,035,000 253,880,000
 (1) Certain amounts from the prior year have been reclassified to
 conform with the 1992 method of presentation. These
 reclassifications had no effect on previously reported
 consolidated net income.
 (2) Income (loss) before income taxes, interest, other
 nonoperating items and reclassification of intercompany
 profits on coal transactions.
 (3) Earnings contribution (loss) on common stock by segment:
 (a) Does not reflect elimination for interest on intercompany
 borrowing arrangements. Reflects allocation of Corporate
 interest charges.
 (b) Includes income taxes on a separate company basis, except
 Financial Services, with any benefit or detriment of
 consolidation reflected in Corporate.
 (c) Amounts are net of preferred dividend requirements and
 minority interest.
 -0- 5/6/92
 /CONTACT: Mike Nelson, 503-731-2125, or Chris Hunter, 503-731-2090, both of PacifiCorp/
 (PCC) CO: PacifiCorp ST: Oregon IN: UTI SU: ERN


LM -- SE001 -- 6895 05/06/92 08:32 EDT
COPYRIGHT 1992 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:May 6, 1992
Words:1304
Previous Article:GRANITE CONSTRUCTION POSTS FIRST QUARTER RESULTS
Next Article:HOUSTON INDUSTRIES REPORTS RESULTS
Topics:


Related Articles
PACIFICORP REPORTS EARNINGS
PACIFICORP ANNOUNCES AGREEMENT TO SELL ITS INTEREST IN NERCO
PACIFICORP REPORTS EARNINGS
PACIFICORP REPORTS SECOND QUARTER EARNINGS
PACIFICORP ANNOUNCES EARNINGS
PACIFICORP EARNINGS
PACIFICORP ANNOUNCES FIRST QUARTER 1995 FINANCIAL RESULTS
PACIFICORP ANNOUNCES SECOND QUARTER 1995 FINANCIAL RESULTS
PACIFICORP REPORTS 1995 EARNINGS; PLANS COMMON SHARE OFFERING
PACIFICORP ANNOUNCES FIRST QUARTER 1996 FINANCIAL RESULTS

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters