Printer Friendly

COASTAL REPORTS $125 MILLION NON-CASH CHARGE IN FOURTH QUARTER

 TEXAS, Feb. 4 /PRNewswire/ -- The Coastal Corporation (NYSE: CGP) reported today that it recorded in the fourth quarter a primarily non- cash $125 million pretax charge for restructuring certain refining and marketing operations. Together with weak conditions in the refining and marketing industry, the charge caused the company to report a $126.8 million net loss for the year, equal to $1.23 per share, and a $154.6 million net loss for the quarter, equal to $1.49 per share.
 "All of Coastal's major operating segments performed at or above our expectations, except for refining and marketing," said James R. Paul, president and chief executive officer.
 "The fourth quarter charges of $125 million reflect our numerous actions to reduce costs and working capital, limit risk and eliminate marginal activities. These charges represent primarily non-cash items reducing the carrying value of certain assets. We believe these steps, along with strengthening industry conditions, will lead to significant improvement in 1993 and beyond."
 In announcing its results, Coastal restated earnings for prior periods as the company conformed its accounting to the first-in, first- out method for all of its refining and marketing inventories and adopted the liability method of accounting for income taxes in the fourth quarter of 1992.
 In the previous year, Coastal had restated net earnings of $8.7 million, or 8 cents per share, for the year and $18.8 million, or 18 cents per share, for the fourth quarter.
 Coastal's 1992 operating profit was $329.9 million, compared with $435.6 million in 1991. For the fourth quarter, operating profit was a negative $60.8 million, compared with profit of $130.2 million for 1991. Eighty-five million dollars of the fourth quarter restructuring charge was made against operating profit. The remaining $40 million, which relates to refining investments, was charged against other income.
 On a segment basis, full-year operating profit for natural gas increased to $403.1 million from $402.2 million last year. Throughput volumes for Coastal's natural gas pipelines increased to 1,885 billion cubic feet, up from 1,878 billion cubic feet in 1991. For the fourth quarter, operating profit was $86.5 million compared with $115.7 million for the same period in 1991, which included benefits from the resolution of rate related contingencies.
 The second accounting change adopted in the fourth quarter involves the adoption of the liability method of accounting for income taxes. This change reduced 1992 operating profit by $42 million, primarily in the natural gas segment, and reduced net earnings by approximately $8 million, equivalent to 8 cents per share, or $2 million per quarter, equivalent to 2 cents per share. However, the change increased stockholder's equity by $153 million. The effect on 1991 results was comparable.
 The exploration and production segment posted a $45.8 million operating profit for the year, up from $45.2 million for 1991. Fourth- quarter operating profit was $19.9 million, down from $27.9 million for the comparable period in 1991, which included a gain on the sale of certain gathering and processing assets.
 Average production of natural gas for the year increased to 146.9 million cubic feet per day compared with 119.2 million cubic feet per day in 1991, as the company took advantage of higher gas prices by adding production from development drilling and resuming production which was previously shut in. Net production of crude oil and condensate for the year averaged 11,796 barrels per day, up from 10,705 barrels per day a year ago.
 Including the primarily non-cash charges for restructuring, the refining and marketing segment's operating loss for the year was $192.1 million compared with a loss of $99.3 million a year ago. For the quarter, the segment lost $186.7 million, compared with a $33.1 million loss for the same quarter a year earlier.
 Adoption of the first-in, first out method of accounting for refining and marketing inventories which were previously carried on the last-in, first-out method, had no significant effect on 1992 full-year results. For the fourth quarter, the change increased net income by $27.5 million, or 26 cents per share. The related restatement of prior periods, for purposes of consistency, reduced full-year 1991 net income and earnings per share by $82.0 million and 78 cents, respectively, and increased 1991 fourth quarter net income and earnings per share by $7.8 million and 7 cents.
 Coastal cited an anticipated drop in overall U.S. refining capacity, growing product demand and increasing markets for environmentally preferred products as reasons for cautious optimism for the future of its refining and marketing segment.
 The coal segment turned in another record year by posting operating profits of $92.8 million compared with $91.8 million for 1991. Coal sales for the year from the company's own mines were 15.4 million tons compared with 15.6 million tons for the earlier year. Fourth-quarter operating profit was $24.8 million compared with $26.2 million for the same period a year earlier.
 The Coastal Corporation (NYSE: CGP) is a Houston-based energy holding company. Coastal has consolidated assets of more than $10 billion and subsidiary operations in natural gas marketing, transmission and storage, refining and marketing, oil and gas exploration and production, coal, chemicals, trucking and independent power production.
 THE COASTAL CORPORATION AND SUBSIDIARIES
 (millions except per share)
 Three Months Twelve Months
 Periods ended Dec. 31 1992 1991(A) 1992(A) 1991(A)
 Operating revenues $2,534.2 $2,593.9 $10,062.9 $9,554.8
 Operating costs and
 expenses:
 Purchases $1,903.1 $2,005.8 $7,458.0 $7,129.3
 Operating expenses 549.4 380.5 1,851.5 1,650.0
 Depreciation, depletion &
 amortization 142.5 77.4 423.5 339.9
 Total $2,595.0 $2,463.7 $9,733.0 $9,119.2
 Operating profit (loss) $(60.8) $ 130.2 $ 329.9 $ 435.6
 Other income - net (35.6) 15.8 15.4 58.5
 Other expenses
 General and
 administrative 22.4 19.9 58.6 57.4
 Interest and debt
 expense 124.7 104.4 485.2 437.8
 Taxes on income (88.9) 2.9 (71.7) (9.8)
 Total $ 58.2 $ 127.2 $ 472.1 $ 485.4
 Net earnings (loss) $ (154.6) $ 18.8 $ (126.8) $ 8.7
 Dividends on preferred
 stock $ .1 $ .1 $ .5 $ .5
 Net earnings (loss)
 available to common
 shareholders $(154.7) $ 18.7 $ (127.3) $ 8.2
 Earnings (loss) per
 share $(1.49) $ .18 $ (1.23) $ .08
 Average common and
 common equivalent
 shares 103.9 104.6 103.8 104.7
 Operating profit (loss)
 by segment:
 Natural gas $ 86.5 $115.7 $ 403.1 $ 402.2
 Refining and
 marketing (186.7) (33.1) (192.1) (99.3)
 Exploration and
 production 19.9 27.9 45.8 45.2
 Coal 24.8 26.2 92.8 91.8
 Other (5.3) (6.5) (19.7) (4.3)
 Total $ (60.8) $ 130.2 $ 329.9 $435.6
 NOTE: (A) Restated
 -0- 2/4/93
 /CONTACT: Dave Scott, 713-877-3839, or Steve Eames, 713-877-6733, both of The Coastal Corporation/
 (CGP)


CO: Coastal Corporation ST: Texas IN: OIL SU: ERN

KD-KW -- NY122 -- 3248 02/04/93 17:59 EST
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Feb 4, 1993
Words:1204
Previous Article:GATX CAPITAL AND CENTRON DPL EMPLOYEE GROUP COMPLETE ACQUISITION OF CENTRON STOCK
Next Article:FLEET AEROSPACE ISSUES NOTICE OF RESET DIVIDEND RATE ON 10 PERCENT CUMULATIVE RESET PREFERRED STOCK
Topics:


Related Articles
COASTAL REPORTS 1991 EARNINGS
PEPSICO TO ADOPT ACCOUNTING CHANGES
KENDALL INTERNATIONAL, INC. RELEASES YEAR-END RESULTS
STRONG FOURTH QUARTER BOOSTS THE COASTAL CORPORATION'S FULL-YEAR RESULTS
COASTAL'S ANR PIPELINE COMMENCES $125 MILLION PUBLIC OFFERING OF 30-YEAR DEBENTURES
Coastal Bancorp, Inc. Announces Fourth Quarter Earnings
Midland Cogeneration Venture Announces 4th Quarter Earnings.
Noble Drilling Reports 1999 Year End and Fourth Quarter 1999 Results.
Noble Drilling Reports Fourth Quarter and Full Year 2000 Results.

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters