EXHIBIT 99.1
(WPS RESOURCES CORPORATION LETTERHEAD)
FOR RELEASE: July 22, 1998
For additional information, see attached table or contact:
Ralph G. Baeten, Treasurer, WPS Resources Corporation
(920) 433-1449
WPS RESOURCES CORPORATION
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ANNOUNCES SECOND QUARTER FINANCIAL RESULTS
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Green Bay, WI -- Second quarter basic and diluted earnings per average share
of common stock of WPS Resources Corporation ("WPSR") for the three months
ended June 30, 1998, were $0.41 compared with $0.40 for the corresponding
period in 1997, an increase of 2.5%. Net income for the three months ended
June 30, 1998 and 1997, was $9.9 million and $9.6 million, respectively.
Earnings on common stock at Wisconsin Public Service Corporation ("WPSC"),
WPSR's principal subsidiary, were $11.4 million for the three months ended
June 30, 1998, and $11.2 million for the same period in 1997. "Warmer than
normal weather contributed to higher electric sales and increased earnings
at WPSR for the second quarter of 1998," stated Dan P. Bittner, Vice
President and Chief Financial Officer of WPSR.
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Financial Results
Page 2
July 22, 1998
WPSR operating revenues were $219.6 million in the second quarter of 1998
compared with $191.4 million in the second quarter of 1997, an increase of
14.8%. Electric utility revenues at WPSC increased $6.8 million due primarily
to increased energy prices paid by wholesale and interruptible buy-through
customers during a period of abnormally warm weather in the latter part of the
second quarter of 1998. Also included in 1998 second quarter electric
revenues are $3.8 million of surcharge revenues related to recovery of the
deferred costs of the 1997 steam generator repairs at the Kewaunee Nuclear
Power Plant ("Kewaunee") which were offset by a charge to nuclear maintenance
expense. WPSC is the operator and 41.2% owner of Kewaunee. Partially
offsetting the increase in revenue was a $1.0 million refund as the result of
a Federal Energy Regulatory Commission settlement related to open access
transmission tariff rates. Gas utility revenues decreased $14.9 million as a
result of reduced sales and mild weather in the first half of the second
quarter of 1998. Also contributing to the decrease in gas utility revenues
was a $7.5 million refund from ANR Pipeline Company which WPSC passed on to
its gas customers. This refund was also credited to gas purchases.
Nonregulated energy revenues increased $36.4 million due primarily to
increased gas sales at WPS Energy Services, Inc. ("ESI"), WPSR's energy
marketing subsidiary.
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Financial Results
Page 3
July 22, 1998
Explanation of WPSR Earnings Per Share Changes
Between Quarters Ended June 30, 1998 and June 30, 1997
DOLLAR
IMPACT IN EARNINGS PER
MILLIONS SHARE IMPACT
(Before Tax) (After Tax)
Increase in Electric Utility Margin $7.4 $0.19
Decrease in Gas Utility Margin (1.9) (0.05)
Net Increase in Nonregulated Margins 0.4 0.01
Increase in Maintenance Expenses (2.2) (0.06)
Decrease in Other Income (4.0) (0.10)
Change in Other Items 0.8 0.02
Total Earnings Per Share Impact $0.01
The primary reasons for the increase in WPSR earnings in the second quarter of
1998 were higher electric utility margins due to a 137.1% increase in cooling
degree days and higher nonregulated gas and electric margins as a result of
increased sales. Partially offsetting these increases in earnings were lower
gas utility margins due to less sales, and an increase in nuclear maintenance
expenses due to recognition of the 1997 deferred expenses for Kewaunee steam
generator repairs. Also offsetting the increases in earnings was a reduction
in other income in the second quarter of 1998 compared with the second quarter
of 1997 which reflected the gain from sales of nonutility property of
$2.7 million.
Year-to-date basic and diluted earnings per average share of common stock of
WPSR were $1.13 compared with $1.16 for the corresponding period in 1997.
Operating revenues for the six-month period ending June 30, 1998, were
$496.4 million and net
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Financial Results
Page 4
July 22, 1998
income for the period was $27.0 million. Operating revenues for the
six-month period ending June 30, 1997, were $454.4 million and net
income for the period was $27.8 million. Year-to-date earnings on common
stock at WPSC were $29.3 million for 1998 and $31.2 million for 1997.
The primary reasons for the decrease in earnings at WPSR were a decrease in
other income due to the gain from sales of nonutility property which had
occurred in the second quarter of 1997 and a decrease in utility gas margins.
Partially offsetting these decreases in earnings were increased electric
utility margins as a result of increased prices during a period of abnormally
warm weather in the latter part of the second quarter of 1998, a decrease in
other operating expenses, and an increase in the nonregulated gas margin.
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Financial Results
Page 5
July 22, 1998
Explanation of WPSR Earnings Per Share Changes
Between Six Months Ended June 30, 1998 and June 30, 1997
DOLLAR
IMPACT IN EARNINGS PER
MILLIONS SHARE IMPACT
(Before Tax) (After Tax)
Increase in Electric Utility Margin $4.8 $0.12
Decrease in Gas Utility Margin (2.5) (0.06)
Net Increase in Nonregulated Margins 1.4 0.03
Increase in Depreciation and
Decommissioning Expenses (2.3) (0.06)
Increase in Maintenance Expenses (2.7) (0.07)
Decrease in Other Operating Expenses 2.6 0.07
Decrease in Other Income (2.8) (0.07)
Change in Other Items 0.4 0.01
Total Earnings Per Share Impact $(0.03)
Basic and diluted earnings per average share of common stock of WPSR for the
twelve months ended June 30, 1998, were $2.22 compared with $1.76 for the
twelve months ended June 30, 1997, an increase of 26.1%.
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WPS RESOURCES CORPORATION
EARNINGS ANALYSIS
(THOUSANDS, EXCEPT PER SHARE AMOUNTS)
QUARTER ENDED % YEAR-TO-DATE % YEAR ENDED %
JUNE 30 CHANGE JUNE 30 CHANGE JUNE 30 CHANGE
1998 1997 1998 1997 1998 1997
REVENUES $219,620 $191,360 14.8% $496,429 $454,373 9.3% $920,396 $879,662 4.6%
OPERATING EXPENSES 200,090 175,740 13.9% 445,964 405,483 10.0% 818,732 794,035 3.1%
------- ------- ------- ------- ------- -------
OPERATING INCOME 19,530 15,620 25.0% 50,465 48,890 3.2% 101,664 85,627 18.7%
OTHER INCOME/(DEDUCTIONS) 1,641 5,782 -71.6% 4,186 7,246 -42.2% 9,377 5,927 58.2%
------- ------- ------- ------- ------- -------
INCOME BEFORE INTEREST
AND TAXES 21,171 21,402 -1.1% 54,651 56,136 -2.6% 111,041 91,554 21.3%
INTEREST EXPENSE 6,106 6,187 -1.3% 12,222 12,705 -3.8% 25,920 25,654 1.0%
INCOME TAXES 4,408 4,866 -9.4% 13,893 14,069 -1.3% 29,094 20,868 39.4%
PREFERRED STOCK DIVIDENDS
OF SUBSIDIARY 778 778 0.0% 1,556 1,556 0.0% 3,111 3,111 0.0%
------- ------- ------- ------- ------- -------
NET INCOME $ 9,879 $ 9,571 3.2% $ 26,980 $27,806 -3.0% $ 52,916 $ 41,921 26.2%
======= ======= ======= ======= ======= =======
AVERAGE SHARES OF
COMMON STOCK 23,858 23,875 -0.1% 23,860 23,878 -0.1% 23,864 23,882 -0.1%
EARNINGS PER SHARE $0.41 $0.40 2.5% $1.13 $1.16 -2.6% $2.22 $1.76 26.1%
HEATING DEGREE DAYS 828 1,249 -33.7% 4,069 5,130 -20.7% 7,038 8,370 -15.9%
COOLING DEGREE DAYS 166 70 137.1% 166 70 137.1% 351 292 20.2%