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TRANSCO ENERGY COMPANY REPORTS THIRD QUARTER RESULTS; PIPELINE OPERATING INCOME UP 11 PERCENT; RESULTS INCLUDE GAIN ON TXP LIQUIDATION

TRANSCO ENERGY COMPANY REPORTS THIRD QUARTER RESULTS; PIPELINE OPERATING
 INCOME UP 11 PERCENT; RESULTS INCLUDE GAIN ON TXP LIQUIDATION
 HOUSTON, Oct. 29 /PRNewswire/ -- Transco Energy Company's (NYSE: E) consolidated operating income for the quarter ended Sept. 30, 1992, was $45.6 million, compared with an operating loss of $17.0 million for the third quarter of 1991 which included charges totalling $67.6 million.
 Despite mild weather in the pipelines' market areas, operating income in the pipeline segment increased to $59.9 million from 1991's $54.1 million, excluding charges totalling $66.9 million. Gas marketing reported an operating loss of $8.4 million, compared with an operating loss of $1.3 million in 1991, due primarily to the sales of certain gathering assets, as well as a lower average gas sales margin and lower gas volumes sold and transported. The power generation segment posted an operating loss of $1.3 million, compared with a loss of $1.6 million a year ago.
 In the company's non-core businesses, the oil and gas segment's operating loss was reduced to $2.2 million from $4.1 million a year ago, while the coal segment reported an operating loss of $1.2 million, compared with operating income of $5.3 million in 1991, due primarily to a lower average margin and lower sales volumes.
 Transco reported net income for the quarter of $0.3 million, or $0.01 per share, compared with a net loss of $53.5 million, or $1.82 per share, for the third quarter of 1991. This year's results include an after-tax gain of $11.7 million on the final liquidating distribution from Transco Exploration Partners, Ltd. (TXP). Excluding the gain, the net loss for the quarter was $11.4 million, or $0.37 per share.
 Last year's results included after-tax charges totalling $56.0 million, or $1.90 per share, associated with a Transcontinental Gas Pipe Line Corporation (TGPL) transition cost proceeding that was pending before the Federal Energy Regulatory Commission, estimated employee severance costs, under-recoveries of producer settlement costs and settlement of certain rate issues. Excluding these charges, net income for the third quarter of 1991 was $2.5 million, or $0.08 per share. Excluding the items described above, the decline in earnings primarily reflects increased net interest expense and lower earnings from the gas marketing and coal segments.
 Transco Chairman, President and Chief Executive Officer John P. DesBarres said, "Results for this quarter reflect the seasonal impact of mild weather on the natural gas business and interest expense, which should lessen in future periods as a result of the successful sale of assets and new equity. We have now completed all of the 1992 steps outlined last fall in our strategic and financial plan. We remain focused on maximizing the earnings of each of our core businesses, particularly TGPL and Texas Gas; minimizing the drag on earnings from our remaining non-core operations; and aggressively pursuing the deleveraging of our balance sheet. Due to timing, the proceeds from asset sales and our recent equity offering did not significantly impact interest expense in the third quarter; however, the retirement of debt with those sale proceeds and new equity has reduced our total debt-to- capitalization ratio from 76.7 percent to 72.9 percent."
 Transco Energy Company (NYSE: E) transports natural gas through its interstate pipeline systems to markets in the eastern and midwestern United States, arranges for the transportation and sale of natural gas throughout the U.S., and is active in independent power generation and natural gas vehicle fueling services. Transco also maintains modest positions in other energy-related businesses.
 TRANSCO ENERGY COMPANY
 Unaudited Condensed Consolidated Income Statement
 (Expressed in thousands except for per share amounts)
 Three Months Nine Months
 Ended September 30, Ended September 30,
 1992 1991 1992 1991
 Operating revenues $651,707 $604,161 $1,928,778 $1,945,763
 Operating costs and
 expenses (606,088)(621,187)b(1,819,294)d(1,863,573)b,f
 Operating income (loss) 45,619 (17,026)b 109,484 d 82,190 b,f
 Interest expense (53,371) (74,329)c (157,369) (172,164)c
 Interest income 2,320 6,590 9,712 21,323
 Capitalized interest
 and AFUDC 3,035 10,458 10,775 31,228
 Other income (deductions)12,582 a (4,289) (78,556)a,e (11,979)
 Income tax (provision)
 benefit (3,434) 31,515 34,492 21,463
 Net income (loss) before
 preferred dividends 6,751a (47,081)b,c (71,462)ade (27,939)bcf
 Preferred dividends (6,433) (6,433) (19,298) (19,298)
 Common stock equity
 in net income (loss) 318a (53,514)b,c (90,760)ade (47,237)bcf
 Primary earnings (loss)
 per share of common stock
 and common stock
 equivalents $0.01 $(1.82) $(3.01) $(1.61)
 Average shares of common
 stock and common stock
 equivalents outstanding 30,788 29,327 30,136 29,325
 a -- Includes gain on final liquidating distribution from TXP of $17.7 million $11.7 million after-tax).
 b -- Includes charges of $53.0 million ($33.4 million after-tax) related to a TGPL regulatory proceeding, $12.5 million ($7.9 million after-tax) for estimated employee severance costs and $2.1 million ($1.4 million after-tax) related to under-recovery of producer settlement costs and settlement of certain rate issues.
 c -- Includes interest charge of $21.0 million ($13.3 million after- tax) related to a TGPL regulatory proceeding.
 d -- Includes charges of $31.0 million ($19.5 million after-tax) related to a litigation settlement and $35.2 million ($23.2 million after-tax) to reduce book value of oil and gas properties.
 e -- Includes charges of $56.3 million ($36.9 million after-tax) on the sale of TEPCO and $29.2 million ($19.6 million after-tax) on sales of gathering assets.
 f -- Includes charges of $10.0 million ($6.3 million after-tax) related to the settlement of regulatory and legal issues and $10.1 million ($6.3 million after-tax) related to under-recovery of producer settlement costs; and an earnings benefit of $8.5 million ($5.3 million after-tax) related to the settlement of rate issues.
 TRANSCO ENERGY COMPANY


Unaudited Operating Income (Loss) By Segment - Expressed in Millions
 Three Months Nine Months
 Ended September 30, Ended September 30,
 1992 1991 1992 1991
 Pipelines
 TGPL $44.7 $(19.2) $119.1 $52.6
 Texas Gas 15.2 5.8 50.5 35.4
 Other - 0.6 0.5 2.3
 Total 59.9 (12.8)b (170.1)e 90.3 b,j
 Gas Marketing (8.4) (2.0)c (6.8) 7.5 c
 Power Generation (1.3) (1.6) (3.2) (3.7)
 Oil and Gas
 Conventional - (1.6) (36.2)f (4.7)
 Coalbed Methane (2.2) (2.5) (6.1) (9.7)
 Total (2.2) (4.1) (42.3) (14.4)
 Coal (1.2) 5.3 (2.5) 8.3
 TEC and other (1.2) (1.8) (5.8) (5.8)
 Total $45.6 $(17.0) $109.5 $82.2
 Unaudited Common Stock Equity In Net Income (Loss) By Segment -
 Expressed in Millions
 Three Months Nine Months
 Ended September 30, Ended September 30,
 1992 1991 1992 1991
 Pipelines
 TGPL $15.6 $(36.8) $37.5 $(13.3)
 Texas Gas 6.2 1.1 26.7 16.5
 Other - 0.2 (5.7) 1.6
 Total 21.8 (35.5)b,d 58.5 e,g 4.8b,d,j
 Gas Marketing (6.0) (3.1)c (24.9)h 3.6 c
 Power Generation (0.7) (0.8) (0.8) (1.4)
 Oil and Gas
 Conventional 11.7 a (1.0) (49.2)a,f,i(3.2)
 Coalbed Methane (1.4) (1.4) (3.9) (5.4)
 Total 10.3 (2.4) (53.1) (8.6)
 Coal (1.0) 4.2 (2.5) 5.1
 TEC and other (24.1) (15.9) (68.0) (50.7)
 Total $0.3 $(53.5) $(90.8) $(47.2)
 FOOTNOTES:
 a -- Includes gain on final liquidating distribution from TXP of $17.7 million ($11.7 million after-tax).
 b -- Includes charges of $53.0 million ($33.4 million after-tax) related to a TGPL regulatory proceeding, $11.8 million ($7.4 million after-tax) for estimated employee severance costs and $2.2 million ($1.4 million after-tax) related to under-recoveries of producer settlement costs and settlement of rate issues.
 c -- Includes charge of $0.7 million ($0.5 million after-tax) for estimated employee severance costs.
 d -- Includes charge of $21.0 million ($13.3 million after-tax) related to a TGPL regulatory proceeding.
 e -- Includes charge of $31.0 million ($19.5 million after-tax) related to a litigation settlement.
 f -- Includes charge of $35.2 million ($23.2 million after-tax) to reduce book value of oil and gas properties.
 g -- Includes charge of $2.2 million ($1.7 million after-tax) on sale of gathering assets.
 h -- Includes charge totaling $27.1 million ($17.9 million after- tax) on sales of gathering assets.
 i -- Includes charge of $56.3 million ($36.9 million after-tax) on sale of TEPCO.
 j -- Includes charge of $10.0 million ($6.3 million after-tax) related to the settlement of regulatory and legal issues and $10.1 million ($6.3 million after-tax) related to under-recovery of producer settlement costs; and an earnings benefit of $8.5 million ($5.3 million after-tax) related to the settlement of rate issues.
 TRANSCO ENERGY COMPANY
 Volumetric Information
 Three Months Nine Months
 Ended September 30, Ended September 30,
 1992 1991 1992 1991
 Pipeline System Deliveries
 (Bcf)
 TGPL:
 Long-haul transportation 182 195 605 649
 Market area transportation 74 53 276 161
 Total market area
 deliveries 256 248 881 810
 Production area deliveries 54 56 171 195
 Total system deliveries 310 304 1,052 1,005
 TEXAS GAS:
 Sales 14 13 57 58
 Transportation for others
 Long-haul transportation 75 75 280 268
 Short-haul transportation 58 49 189 166
 Total transportation
 for others 133 124 469 434
 Total system deliveries 147 137 526 492
 Gas Marketing
 Gas Sales (Bcf) 74.2 100.0 259.8 297.2
 Natural Gas Liquids Sales
 (million gallons) 38.7 63.0 132.4 143.5
 TRANSCO ENERGY COMPANY
 Unaudited Reported/Normalized Operating Income
 And Common Stock Equity In Net Income
 (In Millions)
 Three Months Nine Months
 Ended September 30, Ended September 30,
 1992 1991 1992 1991
 Reported Operating Income
 (Loss) $45.6 $(17.0) $109.5 $82.2
 Selected Items:
 Provision For TGPL
 Regulatory Proceeding - 53.0 - 53.0
 Producer Settlements, Legal
 And Regulatory Issues - - - 10.0
 Under-Recovery Of Producer
 Settlement Costs and
 Settlement of Certain
 Rate Issues - 2.1 - 3.7
 Prov. For Restructuring - 12.5 - 12.5
 Litigation Settlement - - 31.0 -
 Capitalized Costs In Excess
 Of Ceiling Limitation - - 35.2 -
 Normalized Oper. Inc. 45.6 50.6 175.7 161.4
 Reported Common Stock Equity
 In Net Income (Loss) 0.3 (53.5) (90.8) (47.2)
 Selected Items:
 Provision For Loss On Sale
 Of Assets - - 56.5 -
 Capitalized Costs In Excess
 Of Ceiling Limitation - - 23.2 -
 Producer Settlements, Legal
 And Regulatory Issues - - - 6.3
 Under-Recovery Of Producer
 Settlement Costsand
 Settlement Of Certain Rate
 Issues - 1.4 - 2.4
 Gain On Final Liquidating
 Distribution From TXP(11.7) - (11.7) -
 Litigation Settlement - - 19.5 -
 Provision For TGPL
 Regulatory Proceeding - 46.7 - 46.7
 Prov. For Restructuring - 7.9 - 7.9
 Normalized Common Stock
 Equity In Net Income
 (Loss) (11.4) 2.5 (3.3) 16.1
 -0- 10/29/92
 /CONTACT: Katherine K. Putnam, Media Inquiries, 713-439-2455, or R. Dean Ayers, Analyst Inquiries, 713-439-2593, both of Transco Energy Company/
 (E) CO: Transco Energy Company ST: Texas IN: OIL SU: ERN


KD -- NY115 -- 6899 10/29/92 20:54 EST
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Date:Oct 29, 1992
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