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WARM WEATHER, LACK OF PRECIPITATION REDUCE WASHINGTON WATER POWER EARNINGS

 WARM WEATHER, LACK OF PRECIPITATION
 REDUCE WASHINGTON WATER POWER EARNINGS
 SPOKANE, Wash., July 23 /PRNewswire/ -- The Washington Water Power Company (NYSE: WWP) today reported decreased earnings for both the second quarter of 1992 and for the 12 months ended June 30, 1992.
 Earnings for the second quarter were $0.59 per share, compared with the $0.76 per share posted in the second quarter of 1991. For the first two quarters of the year, company earnings were $1.58 per share, compared with $1.77 per share for the first six months of 1991.
 Earnings for the 12 months ended June 30, 1992, were $2.51 per share, compared with $3.26 per share for the same period in 1991. The 1991 period included $0.52 per share related to a gain on the sale of the company's interest in the WIDCo coal mine.
 Paul A. Redmond, WWP board chairman and chief executive officer, said the earnings decline for both the quarter and 12-month period as largely the result of the continued adverse affects on the company of mild temperatures and below-normal precipitation during the 1991-92 heating season.
 "The warmer-than-normal temperatures experienced during the winter and spring months decreased both electric and natural gas sales," Redmond said. "For the first six months of 1992, kilowatt-hour sales were 84 percent and therm sales were 93 percent of sales achieved through the first six months of 1991. At the same time, the lack of precipitation during the important winter months has reduced streamflows and has also reduced our ability to generate lower-cost hydroelectric power."
 Regional precipitation was only about 80 percent of normal through the first six months of the year, Redmond said, while streamflows on the company's hydroelectric system averaged only 65 percent of normal during the first two quarters of 1992.
 Redmond said reduced streamflows have forced the company to purchase more power than expected and also to incur additional fuel costs for more expensive thermal generation. As a result, fuel costs and purchased power costs were a combined $8 million over expense level incurred during the first six months of 1991 and were $16 million over levels incurred for the 12-month period ended June 30, 1991.
 Even though fuel and purchased power costs are both above 1991 levels, Redmond said WWP employees have done an excellent job of keeping the company's other business costs down.
 "As they always do, our employees continue to respond to the challenge of cost containment and productivity. Because of their efforts, we continue to find additional operating efficiencies and, in the process, drive down our cost of doing business," Redmond said.
 Redmond said the company continues to be encouraged by strong customer growth, particularly in its natural gas business.
 "Gas customer growth on our WWP system has been 3.2 percent, and our WP Natural Gas operating division has experienced about 1.5-percent customer growth so far this year," Redmond said.
 Redmond was also encouraged by the second quarter financial performance of the company's subsidiary operations. Second quarter subsidiary earnings were $0.13 per share, compared with $0.06 per share for the second quarter of 1991, which also included a $0.04-per- share gain related to the sale of the company's interest in the WIDCo Coal Mine. While much of the gain in the second quarter of 1992 was related to accounting adjustments for both WIDCo and Itron, subsidiary operations did show improvement.
 THE WASHINGTON WATER POWER COMPANY
 CONSOLIDATED COMPARATIVE STATEMENTS OF INCOME
 (Unaudited, dollars in thousands except per share amounts)
 For the Twelve Months
 2nd Quarter Ended June 30
 1992 1991 1992 1991
 OPERATING REVENUES $120,061 $123,890 $558,976 $555,920
 OPERATING EXPENSES:
 Operations and
 maintenance 50,644 50,393 269,424 266,251
 Administrative and
 general 11,979 11,349 47,765 45,290
 Depreciation and
 amortization 13,442 12,986 52,775 49,301
 Taxes other than
 income taxes 10,331 8,720 41,896 38,005
 Total operating expenses 86,396 83,448 411,860 398,847
 INCOME FROM OPERATIONS 33,665 40,442 147,116 157,073
 INTEREST EXPENSE AND
 (OTHER INCOME):
 Interest expense 13,237 13,572 54,403 55,897
 Interest capitalized (427) (211) (1,392) (593)
 Gain on sale of subsidiary
 stock (Note 1) 0 0 (6,685) 0
 Other - net (2,827) (3,160) (959) (4,458)
 Total interest expense
 and other - net 9,983 10,201 45,367 50,846
 INCOME BEFORE INCOME
 TAXES 23,682 30,241 101,749 106,227
 INCOME TAXES 7,435 10,909 34,518 34,203
 INCOME FROM CONTINUING
 OPERATIONS 16,247 19,332 67,231 72,024
 Income from discontinued
 coal mining operations -
 net of income taxes
 (Note 2) 0 822 731 11,936
 NET INCOME 16,247 20,154 67,962 83,960
 DEDUCT - Preferred stock
 dividend requirements 1,585 2,308 7,690 8,426
 INCOME AVAILABLE FOR
 COMMON STOCK $ 14,662 $ 17,846 $ 60,272 $ 75,534
 Average common shares
 outstanding (thousands) 24,842 23,366 24,023 23,194
 EARNINGS PER COMMON SHARE:
 From continuing operations $0.59 $0.73 $2.48 $2.74
 From discontinued coal
 mining operations (Note 2) 0.00 0.03 0.03 0.52
 Total $0.59 $0.76 $2.51 $3.26
 DIVIDENDS PER SHARE
 OF COMMON STOCK $0.62 $0.62 $2.48 $2.48
 SUPPLEMENTAL INFORMATION
 INCOME FROM CONTINUING OPERATIONS
 Utility operations $ 13,149 $ 18,761 $ 59,899 $ 71,732
 Non-utility operations $ 3,098 $ 571 $ 7,333 $ 292
 Note 1: The gain resulted from stock issued by the Company's electronics subsidiary for the purpose of acquiring "Enscan, an electronics equipment production company. Net of tax, the gain was $4,412,000 and equates to $0.18 per share.
 Note 2: The Company has sold the assets of its coal mining subsidiary to PacifiCorp for $40,800,000. The sale closed on July 31, 1990. The financial statements have been reclassified to reflect the Company's continuing operations.
 -0- 7/23/92
 /CONTACT: Patrick Lynch, 509-482-4246, or Rob Strenge, 509-482-4230, both of The Washington Water Power Company/
 (WWP) CO: Washington Water Power Company ST: Washington IN: UTI SU: ERN


LM -- SE007 -- 2502 07/23/92 12:05 EDT
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Date:Jul 23, 1992
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