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UTILICORP ANNOUNCES HIGHER THIRD QUARTER RESULTS;
ANTICIPATES FOURTH QUARTER CHARGE FOR ASSET IMPAIRMENT
KANSAS CITY, MO, October 25, 1995 -- UtiliCorp United (NYSE:UCU) today
announced that earnings available for common shares for the third quarter were
18 percent higher than in 1994, with revenues growing 8 percent in the quarter
to $342 million. The company also announced that it expects to record an after-
tax charge of approximately $19 million in the fourth quarter of 1995 reflecting
the impairment of certain non-regulated assets.
UtiliCorp is in the process of evaluating the carrying value of certain
long-lived assets based on the requirements of Statement of Financial Accounting
Standards (SFAS) 121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to Be Disposed Of." In the fourth quarter of 1995 the
company plans to undertake early adoption of SFAS 121, which standardizes when
and how long-lived assets are reviewed for possible impairment. The anticipated
non-cash charge relates to assets at three UtiliCorp subsidiaries -- an
independent power project, various gas gathering systems, and gas processing
facilities.
Richard C. Green, Jr., UtiliCorp chairman and president, said that the
charge will not affect the company's cash flows, and given current market
conditions it reflects all the asset impairments identified following a
company-wide review. Green said UtiliCorp's other assets continue to include
many which are believed to have fair values that are greater than their carrying
values.
For the three months ended September 30, 1995, UtiliCorp's earnings
available for common shares were $16.5 million, 18 percent higher than the $14.0
million earned in the
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1994 quarter. Primary earnings per average common share were up 16 percent,
$.36 compared to $.31 a year earlier. Income from operations was $59.6 million
compared to $48.4 million. Revenues were $342 million versus $315 million in
the 1994 quarter. The improved third quarter results are primarily due to
hotter weather in July and August, which increased electric sales volumes to
residential and small commercial customers.
For the twelve months ended September 30, 1995, UtiliCorp's earnings were
$88.4 million, compared to $89.8 million during the same period a year earlier.
Primary earnings per average common share were $1.96 versus $2.07. Income from
operations was $244.7 million versus $156.9 million a year earlier. Revenues
for the 12 months were $1.52 billion compared to $1.56 billion. Results were
lower than in the prior year's period due to higher interest and operating
expenses.
"Our operations and market positions remain strong," said Green. "However,
excluding SFAS 121, continuing higher expenses due to additional borrowings
primarily related to recent acquisition opportunities, and the launch of our
EnergyOne-SM- brand and infrastructure costs means that our current outlook for
1995 -- while still a growth year -- will not reach the 4 to 6 percent earnings
growth target I set at the beginning of the year."
During 1995 UtiliCorp has taken major steps toward carrying out its long-
term growth strategy. Green pointed to the company's recently acquired
ownership interest in United Energy, an Australian electric distribution
company, its partnership with Novell, Inc. to develop smart networking
technology, and recent marketing successes resulting from its investments in its
EnergyOne-SM- brand as examples of the strategic moves that will play a role in
securing UtiliCorp's place in the evolving global energy marketplace.
Based in Kansas City, UtiliCorp United is an international electric and gas
company with total assets of $3.4 billion. The company has energy customers and
operations in 45 states across the U.S. and in Canada, Great Britain, New
Zealand, Australia and Jamaica. Earlier this year it launched EnergyOne-SM-,
the first nationally branded line of products and services for
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electric and gas utility customers. UtiliCorp has grown rapidly over the past
decade through utility mergers and acquisitions and by starting non-regulated
energy related businesses.
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UTILICORP UNITED INC.
Condensed Consolidated Statement of Income
(Unaudited)
In millions, except per share amounts
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3 Months Ended 9 Months Ended 12 Months Ended
Sept. 30, Sept. 30, Sept. 30,
1995 1994 1995 1994 1995 1994
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Revenues $ 341.5 $ 315.1 $ 1,133.7 $ 1,124.0 $ 1,524.3 $ 1,555.3
Expenses 281.9 266.7 952.7 957.3 1,279.6 1,398.4(a)
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Income From Operations 59.6 48.4 181.0 166.7 244.7 156.9
Interest Charges and Other 29.9 25.6 87.1 69.6 104.3 36.9(b)
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Income Before Income Taxes 29.7 22.8 93.9 97.1 140.4 120.0
Income Taxes 12.7 8.3 37.5 36.3 50.4 25.9
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Net Income 17.0 14.5 56.4 60.8 90.0 94.1
Preference Dividends .5 .5 1.5 2.9 1.6 4.3
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Earnings Available for Common Shares $ 16.5 $ 14.0 $ 54.9 $ 57.9 $ 88.4 $ 89.8
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Weighted Average Common Shares
Outstanding:
Primary 45.17 44.82 44.93 43.83 45.16 43.36
Fully Diluted 45.52 45.37 45.35 44.39 45.60 45.31
Earnings Per Common Share:
Primary $ .36 $ .31 $1.22 $1.32 $1.96 $2.07
Fully Diluted $ .36 $ .31 $1.22 $1.31 $1.94 $2.04
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(a) Includes restructuring charge of $69.8 million in December 1993.
(b) Includes gain on sale of subsidiary stock of $47.8 million in October 1993.