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TRANSCO ENERGY COMPANY REPORTS THIRD QUARTER RESULTS

 HOUSTON, Oct. 25 /PRNewswire/ -- Transco Energy Company (NYSE: E) reported a net loss for the quarter ended Sept. 30, 1993, of $18.0 million, or 46 cents per share, which includes net charges totaling $15.7 million, or 40 cents per share, as discussed below. The net loss this quarter compares with net income of $0.3 million, or 1 cent per share, for the same period a year ago, which included an after-tax gain of $11.7 million, or 38 cents per share. Excluding the gains and charges in both periods, the net loss reported for the 1993 third quarter was $2.3 million, or 6 cents per share, compared with a net loss of $11.4 million, or 37 cents per share last year. Improved operating performance, excluding the gains and charges, and reduced net interest expense were the major factors behind the improvement.
 The 1993 results include an after-tax charge of $32.7 million, or 84 cents per share, on the previously announced agreement with Corpus Christi Gas Gathering, Inc. (Corpus Christi), to resolve litigation and acquire Corpus Christi's interest in jointly owned assets; a net gain of $31.6 million, or 81 cents per share, from the sale of Transco Energy Ventures Company (TEVCO); an after-tax non-cash charge of $12.5 million, or 32 cents per share, related to the write-off by Transcontinental Gas Pipe Line Corporation (TGPL) of a note receivable from its prior sale of an interest in a gas field and related gas processing plant; and a charge of $1.6 million, or 4 cents per share, related to the 1 percent increase in the corporate federal income tax rate, following Congress' passage of the Budget Reconciliation Act of 1993. The 1992 results include an after-tax gain of $11.7 million on the final liquidating distribution from Transco Exploration Partners, Ltd. (TXP).
 "We continue to improve the consolidated financial results of the company. However, we are not pleased that our financial results reflect charges related to the company's past problems, but dealing with those situations is a necessary part of our rebuilding effort," said Transco Chairman, President and CEO John P. DesBarres.
 For the quarter ended Sept. 30, 1993, consolidated operating income was $57.8 million, up from $46.9 million for the third quarter of 1992. These results exclude the pretax $50.3 million charge related to the Corpus Christi transaction and the pretax charge of $20.1 million related to the write-off of the note receivable. The continued improvement in consolidated operating income reflects the strong performance from the company's pipeline businesses. These results also indicate progress in diminishing the negative effects from
other businesses, primarily the coal and oil and gas segments. All 1992 operating results have been restated to report TEVCO as discontinued operations.
 Driven by TGPL's performance, operating income in the pipeline segment increased to $63.6 million, excluding the note receivable write- off, from 1992's $59.9 million. The improvement reflects the continuing benefits of TGPL's cost control programs. Gas marketing reported a lower operating loss of $3.6 million, excluding the charge related to Corpus Christi, when compared with an operating loss of $6.8 million in 1992, primarily due to the earnings from the TGPL sales service, now reported in the gas marketing segment. The coal segment recorded operating income of $2.8 million, compared with an operating loss of $1.2 million a year ago, primarily due to improved sales margins and the positive impact of the new mining plan adopted in late 1992.
 "Two years ago, we began to rebuild this company," said DesBarres. "We have made substantial progress. Since the end of the third quarter last year, we've improved our debt-to-capitalization ratio to 71 percent from 77 percent, and we've reduced total debt to $1.9 billion from $2.2 billion. In addition, we had a net cash investment position of $200 million at the end of the quarter.
 "We are pleased with our overall successes to date and the solid performance of our pipelines. We've also improved the earnings performance from other businesses, particularly coal. However, significant work still lies ahead. In gas marketing, we must eliminate those factors that contribute to disappointing financial performance from this important segment of our gas business," DesBarres said.
 "Our goals remain clear and unchanged: continue the excellent operating performance from our pipelines, respond to the needs of our customers, restore the gas marketing segment to profitability and reduce debt," DesBarres said.
 Transco Energy Company transports natural gas through its interstate pipeline systems to markets in the eastern and midwestern United States and arranges for the transportation and sale of natural gas throughout the United States. 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)
 For the periods ended Three Months Nine Months
 Sept. 30, 1993 1992(A) 1993 1992(A)
 Operating revenues $674,960 $642,696 $2,134,554 $1,906,897
 Operating costs and
 expenses (687,556) (595,780) (1,998,435) (1,794,176)
 (B)(C) (B)(C) (F)
 Operating income
 (loss) (12,596) 46,916 136,119 112,721
 (B)(C) (B)(C) (F)
 Interest expense (47,114) (53,333) (143,319) (157,176)
 Interest income 1,674 1,995 6,489 9,011
 Capitalized interest
 and AFUDC 3,319 3,029 5,815 10,757
 Other income
 (deductions) (7,048) 12,512(E) (17,393) (80,309)(E)(G)
 Income tax (provision)
 benefit 18,600(D) (3,698) 215(D) 34,326
 Income (loss)
 from continuing
 operations (43,165) 7,421 (12,074) (70,670)
 Loss from operations
 of discontinued segment,
 net of income taxes -- (670) (93) (792)
 Gain on sale of
 discontinued segment
 (TEVCO), net of income
 taxes 31,572 -- 31,572 --
 Net income (loss) before
 preferred dividends (11,593) 6,751 19,405 (71,462)
 Preferred dividends (6,433) (6,433) (19,298) (19,298)
 Common stock
 equity in net
 income (loss) $(18,026) $318 $107 $(90,760)
 (B)(C)(D) (E) (B)(C)(D) (E)(F)(G)
 Earnings (loss)
 per share of common
 stock and common
 stock equivalents:
 Continuing operations $(1.27) $0.03 $(0.80) $(2.98)
 Discontinued operations 0.81 (0.02) 0.80 (0.03)
 Total $(0.46) $0.01 -- $(3.01)
 Average shares of
 common stock and
 common stock
 equivalents
 outstanding 38,990 30,788 39,282 30,136
 Footnotes:
 (A) -- Prior periods have been restated to present the Power Generation segment as discontinued operations due to the sale of TEVCO.
 (B) -- Includes a charge of $50.3 million ($32.7 million after-tax) related to the agreement with Corpus Christi to resolve litigation and acquire Corpus Christi's interest in jointly owned assets.
 (C) -- Includes a charge of $20.1 million ($12.5 million after-tax) related to a write-off of a TGPL note receivable.
 (D) -- Includes a charge of $1.6 million for a corporate federal income tax rate increase from 34 percent to 35 percent.
 (E) -- Includes a gain on the final liquidating distribution from TXP of $17.7 million ($11.7 million after-tax).
 (F) -- Includes a charge 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 the book value of oil and gas properties.
 (G) -- Includes losses 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.
 TRANSCO ENERGY COMPANY


Unaudited Operating Income (Loss) By Segment - Expressed in Millions
 For the periods ended Three Months Nine Months
 Sept. 30, 1993 1992 1993 1992
 Pipelines
 TGPL $28.2 $44.7 $140.9 $119.1
 Texas Gas 15.4 15.2 62.3 50.5
 Other (0.1) -- (0.3) 0.5
 Total 43.5(A) 59.9 202.9(A) 170.1(G)
 Gas Marketing (6.6)(B) (6.8)(E) (10.5)(B) (6.1)(E)
 Oil and Gas
 Conventional -- -- -- (36.2)(H)
 Coalbed Methane (1.2) (2.2) (4.9) (6.1)
 Total (1.2) (2.2) (4.9) (42.3)
 Coal 2.8 (1.2) 6.8 (2.5)
 TEC and other (51.1)(C) (2.8)(E) (58.2)(C) (6.5)(E)
 Total $(12.6) $46.9 $136.1 $112.7
 Unaudited Common Stock Equity In Net Income (Loss) By Segment -
 Expressed in Millions
 For the periods ended Three Months Nine Months
 Sept. 30, 1993 1992 1993 1992
 Pipelines
 TGPL $7.0 $15.6 $56.0 $37.5
 Texas Gas 6.0 6.2 29.2 26.7
 Other (0.1) -- (0.3) (5.7)
 Total 12.9(A) 21.8 84.9(A) 58.5(G)(I)
 Gas Marketing (4.1)(B) (3.8)(E) (5.4)(B) (3.4)(E)(J)
 Oil and Gas
 Conventional -- 11.7(F) -- (49.2)
 (F)(H)(K)
 Coalbed Methane (1.6) (1.4) (5.1) (3.9)
 Total (1.6) 10.3 (5.1) (53.1)
 Coal 0.6 (1.0) 3.9 (2.5)
 TEC and other (25.8) (27.0) (78.2) (90.3)
 (C)(D) (E) (C)(D) (E)(L)
 Total $(18.0) $0.3 $0.1 $(90.8)
 Footnotes:
 (A) -- Includes a charge of $20.1 million ($12.5 million after-tax) related to a write-off of a TGPL note receivable.
 (B) -- Includes a charge of $3.0 million ($2.0 million after-tax) related to the agreement with Corpus Christi to resolve litigation and acquire Corpus Christi's interest in jointly owned assets.
 (C) -- Includes a charge of $47.3 million ($30.7 million after-tax) related to the agreement with Corpus Christi to resolve litigation and acquire Corpus Christi's interest in jointly owned assets.
 (D) -- Includes a gain of $50.5 million ($31.6 million after-tax) on the sale of TEVCO.
 (E) -- Following a realignment of Transco's business segments in the fourth quarter of 1992, the gas marketing segment has been restated for all prior periods to reflect the transfer of the gas gathering assets to the TEC and other segments.
 (F) -- Includes a gain on the final liquidating distribution from TXP of $17.7 million ($11.7 million after-tax).
 (G) -- Includes a charge of $31.0 million ($19.5 million after-tax) related to a litigation settlement.
 (H) -- Includes a charge of $35.2 million ($23.2 million after-tax) to reduce the book value of oil and gas properties.
 (I) -- Includes a loss of $2.2 million ($1.7 million after-tax) on sale of gathering assets.
 (J) -- Includes a loss of $1.2 million ($0.8 million after-tax) on sale of gathering assets.
 (K) --Includes a loss of $56.3 million ($36.9 million after-tax) on the sale of TEPCO.
 (L) -- Includes a loss of $25.8 million ($17.1 million after-tax) on the sale of gathering assets.
 TRANSCO ENERGY COMPANY
 Volumetric Information
 For the periods ended Three Months Nine Months
 Sept. 30, 1993 1992 1993 1992
 Pipeline System Deliveries
 (Bcf)
 TGPL:
 Long-haul transportation 179 182 608 605
 Market area transportation 67 74 262 276
 Total market area deliveries 246 256 870 881
 Production area deliveries 56 54 133 171
 Total system deliveries 302 310 1,003 1,052
 Texas Gas:
 Sales 7 14 47 57
 Transportation for others
 Long-haul transportation 100 75 345 280
 Short-haul transportation 60 58 174 189
 Total transportation
 for others 160 133 519 469
 Total system deliveries 167 147 566 526
 Gas Marketing Sales
 Natural Gas (Bcf) 139 74 411 259
 Natural Gas Liquids
 (million gallons) 25 61 111 192
 TRANSCO ENERGY COMPANY
 Unaudited Reported/Normalized Operating Income
 And Common Stock Equity In Net Income
 (In Millions)
 For the periods ended Three Months Nine Months
 Sept. 30, 1993 1992 1993 1992
 Reported Operating
 Income (Loss) $(12.6) $46.9 $136.1 $112.7
 Selected Items:
 Corpus Christi
 Agreement 50.3 -- 50.3 --
 Write-off of a Note
 Receivable 20.1 -- 20.1 --
 Reduction in Book
 Value of Oil and
 Gas Properties -- -- -- 35.2
 Litigation Settlement -- -- -- 31.0
 Normalized Operating
 Income $57.8 $46.9 $206.5 $178.9
 Reported Common Stock
 Equity in Net
 Income (Loss) $(18.0) $0.3 $0.1 $(90.8)
 Selected Items:
 Corpus Christi
 Agreement 32.7 -- 32.7 --
 Sales of Assets (31.1) -- (31.1) 56.5
 Write-off of a Note
 Receivable 12.5 -- 12.5 --
 Federal Tax Rate
 Increase 1.6 -- 1.6 --
 Reduction in Book
 Value of Oil and
 Gas Properties -- -- -- 23.2
 Final Liquidating
 Distribution from
 TXP -- (11.7) -- (11.7)
 Litigation Settlement -- -- -- 19.5
 Normalized Common Stock
 Equity in Net Income
 (Loss) $(2.3) $(11.4) $15.8 $(3.3)
 -0- 10/25/93
 /CONTACT: Katherine K. Putnam, 713-439-2455, or R. Dean Ayers (analysts), 713-439-2593, both of Transco Energy Company/
 (E)


CO: Transco Energy Company ST: Texas IN: OIL SU: ERN

TW -- NY022 -- 6181 10/25/93 10:01 EDT
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Date:Oct 25, 1993
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