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NorAm Energy Reports Fourth Quarter Earnings.

HOUSTON--(BUSINESS WIRE)--February 10, 1995--NorAm Energy Corp. (NYSE:NAE) reported financial results for the fourth quarter and year ended December 31, 1994.

Income from continuing operations for the fourth quarter was $23.8 million as compared to a loss of $4.2 million in 1993. After preferred dividends, income from continuing operations available to common shareholders was $21.9 million, or $0.18 per share, as compared to a loss of $6.1 million, or $0.05 per share in 1993. Included in the fourth quarter 1993 loss was a pre-tax charge of $34.2 million (approximately $0.17 per share) from a contract termination.

For the full year of 1994, income from continuing operations was $51.3 million compared to $39.9 million in 1993. After preferred dividends, income from continuing operations available to common shareholders was $43.5 million, or $0.36 per share, compared to $32.1 million, or $0.26 per share in the prior year. In addition to the contract termination charge, 1993 earnings included pre-tax gains totaling $41.5 million ($0.15 per share) from the sales of Louisiana Intrastate Gas Company and the Nebraska distribution properties of Minnegasco.

In the fourth quarter of 1994, NorAm Energy incurred an after-tax loss from discontinued operations of $2.1 million ($0.02 per share) related to University Savings Association and the litigation brought against the Company by the Resolution Trust Corporation, which was settled during the quarter.

For the full year of 1994, operating income from Pipeline, which includes NorAm's interstate pipeline, gathering and marketing companies, increased 38.2% to $108.1 million from $78.2 million in 1993. In the fourth quarter, Pipeline's operating income increased 67.7% to $27.0 million compared to $16.1 million in the same period in 1993. These earnings gains were due, in part, to improved margins attributable to recent initiatives including enhancements to the Company's Perryville Hub facilities and approximately $7 million resulting from the final approval of two pipeline rate cases.

Operating income for 1994 from distribution operations decreased to $163.2 million from $174.8 million in 1993. Higher revenues from rate increases and increased industrial sales were more than offset by the effects of warm weather at each of the distribution divisions. For the fourth quarter, operating income was $56.0 million compared to $62.0 million in 1993. Each of the Company's Distribution divisions recorded warmer than normal temperatures during the fourth quarter: Arkla, 17% warmer than normal; Entex, 33% warmer than normal; and Minnegasco, 16% warmer than normal. The Company estimates that the departure from normal weather during the fourth quarter reduced operating income by approximately $14.5 million, or after-tax earnings by $0.07 per share.

Despite significantly lower levels of debt than last year, interest expense for the quarter increased $0.3 million due to higher short-term interest rates. Interest expense for the fourth quarter of 1994 was $42.4 million compared to $42.1 million in 1993.

"One of our major objectives for 1994 was to continue to close the earnings gap between Pipeline's actual and allowed return on its assets. We made notable progress in this area as evidenced by the 38% improvement in Pipeline operating income during 1994. More telling is the fact that over the last two years, our turnaround efforts and improvement in market conditions have led to a 157% increase in Pipeline operating income from an adjusted $42 million in 1992 to $108 million in 1994." stated Milt Honea, Chairman, President, and CEO. "While we do not anticipate being able to continue this trend of 30-plus% per year earnings improvement at Pipeline, we do believe, near term, we have further room for earnings improvement in Pipeline through our recently deregulated gathering business and our unregulated marketing businesses."

"Another major objective for this past year was to continue to reduce our debt and strengthen our balance sheet. Our strong cash flows during 1994 allowed us to retire over $130 million in debt, which surpassed our goals." Honea continued.

"Our third major objective for 1994 was to continue to preserve and build our strong base of earnings and cash flow from our distribution businesses. We did have a successful year in achieving rate increases in a number of jurisdictions and in managing our operating costs, but this success was obscured by the warm weather."

"We are pleased with our progress during 1994, but are frustrated that this progress has not been reflected in a higher stock price. Improving shareholder value remains our number one objective, and we are redoubling our efforts toward that end in 1995."

NorAm Energy Corp. is the nation's third largest natural gas utility serving 2.7 million customers through its Entex, Arkla and Minnegasco operating divisions. NorAm Energy is also a major natural gas pipeline and energy marketer providing supply, gathering, storage and transportation services. NorAm Energy trades under the "NAE" ticker symbol.

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 NORAM ENERGY CORP. AND SUBSIDIARIES
 (UNAUDITED)
 (in thousands of dollars except per share amounts)


QUARTER ENDED DECEMBER 31 1994 1993(3)
Operating Revenues $ 713,081 $ 868,026
Income from Continuing Operations Before
 Income Taxes $ 37,758 $ 1,558
Income (Loss) From Continuing Operations $ 23,836 $ (4,218)
Loss from Discontinued Operations, Less
 Taxes (1) (2,102) -
Income (Loss) Before Extraordinary Item 21,734 (4,218)
Extraordinary Item, Less Taxes (2) (606) (381)
Net Income (Loss) 21,128 (4,599)
 Preferred Dividend Requirement 1,950 1,950
Balance Available to Common Stock $ 19,178 $ (6,549)


Per Share Data:


Income (Loss) Before Extraordinary Item $ 0.18 $ (0.05)
Loss from Discontinued Operations, Less
 Taxes (0.02) -
Extraordinary Item, Less Taxes (0.00) (0.00)
Net Income (Loss) $ 0.16 $ (0.05)
Weighted Average Common Shares Outstanding
 (000's) 122,492 122,357


TWELVE MONTHS ENDED DECEMBER 31
Operating Revenues $ 2,801,446 $ 2,949,565
Income from Continuing Operations Before
 Income Taxes $ 85,663 $ 86,416
Income From Continuing Operations $ 51,291 $ 39,935
Loss from Discontinued Operations, Less
 Taxes (1) (2,102) -
Income Before Extraordinary Item 49,189 39,935
Extraordinary Item, Less Taxes (2) (1,123) (3,848)
Net Income 48,066 36,087
 Preferred Dividend Requirement 7,800 7,800
Balance Available to Common Stock $ 40,266 $ 28,287


Per Share Data:


Income From Continuing Operations $ 0.36 $ 0.26
Loss from Discontinued Operations, Less
 Taxes (0.02) -
Extraordinary Item, Less Taxes (0.01) (0.03)
Net Income $ 0.33 $ 0.23
Weighted Average Common Shares Outstanding
 (000's) 122,424 122,305


 (1) Principally settlement of litigation related to University
 Savings Association brought against the Company by the
 Resolution Trust Corporation.
 (2) Loss on reacquisition of debt.
 (3) Income from continuing operations for 1993 includes a fourth
 quarter pre-tax charge of approximately $34.2 million related
 to the termination of certain agreements with Samson Resources
 Inc. and pre-fourth quarter, pre-tax gains of approximately
 $41.5 million related to the sale of certain properties.


 NORAM ENERGY CORP.
 OPERATING INCOME BY BUSINESS UNIT (Unaudited)
 (millions of dollars)


 Fourth Quarter Year-to-Date
 1994 1993 1994 1993


Operating Income (Loss) by Business Unit


 Distribution $ 56.0 $ 62.0 $ 163.2 $ 174.8
 Pipeline (1) 27.0 (18.1)(2) 108.1 44.0(2)
 LIG (3) - - - 5.6
 Other - 2.0 (5.3) (17.4)
 Total Operating Income 83.0 45.9 266.0 207.0
Interest Expense, Net 42.4 42.1 169.4 172.4
Other (Income) Expense 2.8 2.2 10.9 (51.8)(4)
Income from Continuing
 Operations Before Income
 Taxes 37.8 1.6 85.7 86.4
Provision for Income
 Taxes 14.0 5.8 34.4 46.5
Income (Loss) From Continuing
 Operations 23.8 (4.2) 51.3 39.9
Discontinued Operations,
 Less Taxes (5) (2.1) - (2.1) -
Extraordinary Item, Less
 Taxes (6) (0.6) (0.4) (1.1) (3.8)
 Net Income (Loss) 21.1 (4.6) 48.1 36.1
Preferred Dividend
 Requirement 1.9 1.9 7.8 7.8
Balance Available to
 Common Stock $ 19.2 $ (6.5) $ 40.3 $ 28.3


Per Share Data:
 Continuing Operations $ 0.18 $ (0.05) $ 0.36 $ 0.26
 Discontinued Operations,
 Less Taxes (0.02) - (0.02) -
 Extraordinary Item, Less
 Taxes (0.00) (0.00) (0.01) (0.03)
Earnings (Loss) Per Common
 Share $ 0.16 $ (0.05) $ 0.33 $ 0.23
Average Common Shares
 Outstanding
 (in thousands) 122,492 122,357 122,424 122,305


 (1) Excludes LIG.
 (2) Includes a contract termination charge of $34.2 million.
 (3) LIG was sold effective June 30, 1993.
 (4) Includes $23.8 million gain from the sale of the Nebraska
 distribution properties and $17.7 million gain from the
 sale of LIG.
 (5) Principally settlement of litigation related to University
 Savings Association brought against the Company by the
 Resolution Trust Corporation.
 (6) Loss on early retirement of debt.


 NORAM ENERGY CORP.
 OPERATING STATISTICS (Unaudited)


 Fourth Quarter Year-to-Date
 1994 1993 1994 1993
GAS THROUGHPUT (million MMBtu) (million MMBtu)
PIPELINE
NGT
 Sales 6.9 11.3 40.7 52.3
 Transported 135.1 158.9 567.3 585.5
 Less: Elimination (6.2) (13.9) (37.4) (20.3)
 Total Throughput 135.8 156.3 570.6 617.5


MRT
 Sales 8.1 9.3 25.6 62.8
 Transported 73.1 80.9 307.2 258.7
 Less: Elimination (8.1) (3.9) (25.6) (3.9)
 Total Throughput 73.1 86.3 307.2 317.6


NES
 Sales 81.9 68.8 317.9 244.7
 Transported - - - -
 Total Throughput 81.9 68.8 317.9 244.7


PIPELINE CONSOLIDATED
 Sales 65.3 41.5 228.1 174.8
 Transported 198.4 223.4 831.8 780.1
 Less: Elimination (14.3) (17.8) (63.0) (24.2)
 Total Throughput 249.4 247.1 996.9 930.7


 (BCF) (BCF)
DISTRIBUTION
ARKLA
 Sales 23.7 29.3 84.4 89.8
 Transported 7.5 8.6 31.8 36.6
 Total Throughput 31.2 37.9 116.2 126.4


ENTEX
 Sales 64.2 64.7 242.1 221.1
 Transported 8.8 9.0 31.5 31.8
 Total Throughput 73.0 73.7 273.6 252.9


MINNEGASCO
 Sales 37.4 43.4 129.0 131.3
 Transported 3.0 0.4 5.4 7.4
 Total Throughput 40.4 43.8 134.4 138.7




CONTACT: NorAm Energy Corp., Houston

W. Randall Fowler, 713/654-7502
COPYRIGHT 1995 Business Wire
No portion of this article can be reproduced without the express written permission from the copyright holder.
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