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BROOKLYN UNION GAS REPORTS SECOND QUARTER EARNINGS

 BROOKLYN, N.Y., April 22 /PRNewswire/ -- Brooklyn Union Gas (NYSE: BU) announced today that consolidated income available for common stock in the second quarter of fiscal 1993 was $71.7 million, or $2.45 per share, reflecting positive trends in utility and subsidiary operations.
 Earnings in last year's second quarter were $57.5 million, or $2.02 per share. The increase in earnings per share of 43 cents is entirely related to subsidiary operations, which showed a profit of 8 cents per share in the second quarter of fiscal 1993, compared to a loss of 40 cents per share in the second quarter of fiscal 1992. The loss last year was due to a ceiling test impairment charge of $13 million, or 46 cents per share, after federal income taxes. The charge was required by regulations of the Securities and Exchange Commission to reflect the effect on proved gas reserves of low prices at the wellhead a year ago. Subsidiary operating results this fiscal year reflect higher gas production and favorable wellhead pricing. Utility earnings were down 5 cents per share for the quarter primarily reflecting a provision to refund anticipated earnings for fiscal 1993 above the company's allowed rate of return. In accordance with the company's rate settlement, the company is required to refund 65 percent of utility earnings that increase the allowed rate of return above 11.9 percent. Utility operating results continue to reflect gas sales growth and a higher allowed rate of return on common equity in the second year of a three- year rate settlement.
 Earnings for the twelve months ended March 31, 1993 were $76.5 million, or $2.64 per share, compared to $58.0 million, or $2.06 per share, for the twelve months ended March 31, 1992. In addition to the effect of the ceiling test impairment charge of 46 cents per share, the increase in earnings for the twelve months ended March 31, 1993, reflects utility gas sales growth and the 2 percent rate increase both of which were offset, in part, by higher operation and maintenance expense largely related to the severe winter storms this year and the refund provision for anticipated earnings above the company's allowed rate of return. The allowed rate of return in fiscal 1993 has been increased to 11.9 percent from 11.7 percent.
 Sales
 Firm sales for the second quarter of fiscal 1993 were 57,283 MDTH, up 7.6 percent from the second quarter of 1992, reflecting a return to normal weather. Multi-family dwellings continue to be the largest source of new sales, and new markets, including gas-cooling, cogeneration and natural-gas vehicles, have begun to have a discernible impact on sales growth. While firm gas sales normalized for weather have been exceptionally strong in the first six months of fiscal 1993, Brooklyn Union Gas expects sales at year-end to be more in line with the company's targeted annual growth rate of 3 percent. On Feb. 3, 1993, the company set a peak hourly sendout record of 45,646 DTH between 7 a.m. and 8 a.m. when the average temperature was 12 degrees Fahrenheit. Daily sendout on Feb. 2, 1993, of 887,216 DTH was the company's third highest on record.
 Energy-Related Investments
 Gas Exploration and Production Fuel Resources Inc. (FRI), through timely acquisitions of domestic and Canadian gas reserves during the past year, is positioned to take advantage of normal weather, an improved economy, and stronger gas prices. During the first half of fiscal 1993, FRI's gas production has been approximately 12,800 MDTH, nearly double the total for the same period last year. FRI has also added significant new reserves to the 125 BCF of gas reserves owned as of Sept. 30, 1992. A Canadian gas-production and processing company owned by FRI completed two acquisitions in Alberta with reserves totalling approximately 34.5 BCF, and FRI has expanded domestically by acquiring interests in Arkoma Basin properties with 5.4 BCF of gas reserves. Moreover, arrangements are being made to purchase reserves in excess of 20 BCF in this important basin in the near future. These developments should contribute positively to FRI's performance in this fiscal year.
 Propane distribution sales in the 17 states served by Star Gas Corporation have improved due to more favorable weather patterns during the early part of this heating season. Gas sales for agricultural applications, particularly for crop drying, have also benefited. As a result, Star Gas's cash flow has significantly increased compared to preceding years. Last year, extremely warm weather and the economic recession caused Star Gas to default on certain loan agreements. This year Star reestablished its line of credit through October 1993. As a result of these factors and prevailing low interest rates, Star is currently negotiating a long-term restructuring with a number of interested parties.
 BROOKLYN UNION GAS
 Consolidated Summary of Earnings
 (Thousands of dollars, unaudited)
 Periods Ended Three Months Twelve Months
 March 31 1993 1992 1993 1992
 Operating revenues $489,367 $430,556 $1,173,642 $1,023,586
 Cost of gas 206,606 168,958 461,302 379,521
 Net revenues 282,761 261,598 712,340 644,065
 Operating and maintenance
 expense 93,560 86,263 347,439 314,131
 Depreciation and
 depletion 16,118 32,464 58,991 66,806
 General taxes 52,142 48,031 143,536 138,800
 Federal income tax 36,213 28,824 41,168 27,937
 Operating income 84,728 66,016 121,206 96,391
 Other income (loss) (620) 2,611 1,554 4,515
 Income before interest
 charges 84,108 68,627 122,760 100,906
 Interest charges 12,279 10,155 45,927 39,123
 Net income 71,829 58,472 76,833 61,783
 Dividends on preferred
 stock 92 945 371 3,810
 Income available for
 common stock 71,737 57,527 76,462 57,973
 Per share of common stock $2.45 $2.02 $2.64 $2.06
 This interim summary of earnings should not be taken as a prediction for the fiscal year. Our business is influenced by seasonal weather conditions and the timing of approved base tariff rate changes.
 -0- 4/22/93
 /CONTACT: Jan C. Childress, manager, investor relations of Brooklyn Union Gas, 718-403-3382/
 (BU)


CO: Brooklyn Union Gas ST: New York IN: UTI SU: ERN

PS-OS -- NY015 -- 9281 04/22/93 10:08 EDT
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Date:Apr 22, 1993
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