-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MYCn4nK+4pVQxapok7REshGSXkW3kQLz5L9N1MkiE79rLltgFyRGZsFN96lcRRYS P7tZfKfgNAeT3xb3UZKCyg== 0000203248-03-000140.txt : 20030806 0000203248-03-000140.hdr.sgml : 20030806 20030806113034 ACCESSION NUMBER: 0000203248-03-000140 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20030630 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20030806 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SOUTHERN UNION CO CENTRAL INDEX KEY: 0000203248 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS DISTRIBUTION [4924] IRS NUMBER: 750571592 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-06407 FILM NUMBER: 03825398 BUSINESS ADDRESS: STREET 1: ONE PEI CENTER CITY: WILKES-BARRE STATE: PA ZIP: 18711 BUSINESS PHONE: (570) 820-2400 8-K 1 form8kfy03.txt FORM 8K FY2003 EARNINGS RELEASE ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) August 6, 2003 SOUTHERN UNION COMPANY (Exact name of registrant as specified in its charter) Delaware 1-6407 75-0571592 (State or other jurisdiction (Commission File Number) (I.R.S. Employer of incorporation) Identification No.) One PEI Center 18711 Wilkes-Barre, Pennsylvania (Zip Code) (Address of principal executive offices) Registrant's telephone number, including area code: (570) 820-2400 ================================================================================ ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS (c) Exhibit No. 99.a Press Release issued by Southern Union Company dated August 6, 2003. ITEM 12. DISCLOSURE OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION On August 6, 2003, Southern Union Company (the Company) will release summary financial information to the general public, including the investment community, regarding the Company's operating performance for the quarter and year-ended June 30, 2003 and 2002. The financial information released is included herein. The following information is summary in nature and should not be considered complete financial statements. SOUTHERN UNION COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
Three Months Ended Twelve Months Ended June 30, June 30, ----------------------------- ----------------------------- 2003 2002 2003 2002 ------------- ------------- ------------ ------------ (thousands of dollars, except shares and per share amounts) Operating revenues ....................................... $ 207,030 $ 153,717 $ 1,188,507 $ 980,614 Cost of gas and other energy ............................. (110,653) (78,490) (724,611) (573,077) Revenue-related taxes .................................... (6,861) (4,760) (40,485) (33,409) ------------ ------------ ------------- ------------- Operating margin .................................... 89,516 70,467 423,411 374,128 Operating expenses: Operating, maintenance and general .................. 61,922 43,659 193,745 171,147 Business restructuring charges ...................... -- (1,394) -- 29,159 Depreciation and amortization ....................... 17,570 14,869 60,642 58,989 Taxes, other than on income and revenues ............ 7,508 5,017 26,653 23,708 ------------ ------------ ------------- ------------- Total operating expenses ........................ 87,000 62,151 281,040 283,003 ------------ ------------ ------------- ------------- Net operating revenues .......................... 2,516 8,316 142,371 91,125 ------------ ------------ ------------- ------------- Other income (expenses): Interest ............................................ (22,737) (20,548) (84,320) (90,992) Dividends on preferred securities of subsidiary trust (2,370) (2,370) (9,480) (9,480) Other, net .......................................... 422 (12,076) 19,371 14,278 ------------ ------------ ------------- ------------- Total other expenses, net ....................... (24,685) (34,994) (74,429) (86,194) ------------ ------------ ------------- ------------- Earnings (loss) from continuing operations before income taxes (benefit) .............................. (22,169) (26,678) 67,942 4,931 Federal and state income taxes (benefit) ................. (10,271) (11,651) 24,273 3,411 ------------ ------------ ------------- ------------- Net earnings (loss) from continuing operations ........... (11,898) (15,027) 43,669 1,520 ------------ ------------ ------------- ------------- Discontinued Operations: Earnings from discontinued operations before income taxes .................................... -- 1,437 84,773 29,801 Federal and state income taxes (benefit) ............ (1,264) (79) 52,253 11,697 ------------ ------------ ------------- ------------- Net earnings from discontinued operations ................ 1,264 1,516 32,520 18,104 ------------ ------------ ------------- ------------- Net earnings (loss) available for common stock ........... $ (10,634) $ (13,511) $ 76,189 $ 19,624 ============ ============ ============= ============= Net earnings (loss) from continuing operation per share: Basic ............................................... $ (.20) $ (.27) $ .76 $ .03 ============ ============ ============= ============= Diluted ............................................. $ (.20) $ (.27) $ .74 $ .03 ============ ============ ============= ============= Net earnings (loss) available for common stock per share: Basic ............................................... $ (.18) $ (.24) $ 1.33 $ .35 ============ ============ ============= ============= Diluted ............................................. $ (.18) $ (.24) $ 1.29 $ .33 ============ ============ ============= ============= Weighted average shares outstanding: Basic ............................................... 59,807,049 55,876,938 57,176,843 56,060,425 ============ ============ ============= ============= Diluted ............................................. 59,807,049 55,876,938 59,017,861 59,132,567 ============ ============ ============= =============
See Notes to Condensed Consolidated Financial Statements. SOUTHERN UNION COMPANY AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
June 30, -------------------------------- 2003 2002 -------------- -------------- (thousands of dollars) ASSETS Property, plant and equipment: Plant............................................................. $ 3,747,858 $ 1,773,884 Less accumulated depreciation and amortization.................... (641,225) (604,114) ------------- ------------- Net property, plant and equipment............................ 3,106,633 1,169,770 ------------- ------------- Current assets: Cash and cash equivalents......................................... 86,997 -- Accounts receivable, billed and unbilled, net..................... 186,376 95,036 Inventories....................................................... 160,680 101,076 Deferred gas purchase costs....................................... 24,603 3,597 Investment securities available for sale.......................... 53 1,163 Prepayments and other............................................. 53,452 13,527 Assets held for sale.............................................. -- 395,446 ------------- ------------- Total current assets......................................... 512,161 609,845 ------------- ------------- Goodwill, net ......................................................... 642,921 642,921 Deferred charges....................................................... 186,848 206,130 Investment securities, at cost......................................... 9,641 9,786 Other.................................................................. 78,493 41,612 ------------ ------------- Total assets...................................................... $ 4,536,697 $ 2,680,064 ============= ============= CAPITALIZATION AND LIABILITIES Capitalization: Common stockholders' equity....................................... $ 920,437 $ 685,346 Preferred stock of subsidiary trust, $25 par...................... 100,000 100,000 Long-term debt and capital lease obligation....................... 1,981,140 1,082,210 -------------- ------------- Total capitalization.......................................... 3,001,577 1,867,556 ------------- ------------- Current liabilities: Long-term debt due within one year................................ 365,265 108,203 Notes payable..................................................... 251,500 131,800 Accounts payable.................................................. 93,716 71,343 Federal, state and local taxes.................................... 11,065 9,212 Accrued dividends on preferred stock of subsidiary trust.......... -- 2,370 Other............................................................. 239,875 63,277 Liabilities related to assets held for sale....................... -- 67,718 ------------- ------------- Total current liabilities..................................... 961,421 453,923 ------------- ------------- Deferred credits and other liabilities................................. 323,596 141,933 Accumulated deferred income taxes...................................... 250,103 216,652 ------------- ------------- Total capitalization and liabilities.............................. $ 4,536,697 $ 2,680,064 ============= =============
See Notes to Condensed Consolidated Financial Statements. SOUTHERN UNION COMPANY AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 1 -- BASIS OF PRESENTATION The condensed consolidated financial statements have been prepared by Southern Union Company (the Company) and certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted. The condensed consolidated financial statement presentation in this report will produce the same net income as the consolidated financial statements and, in management's opinion, is a fair representation of the operations of the Company. NOTE 2 - PANHANDLE ENERGY ACQUISITION On June 11, 2003, the Company completed the acquisition of Panhandle Eastern Pipe Line Company and its subsidiaries (hereafter referred to as Panhandle Energy) for approximately $584.3 million in cash plus 3 million shares of Southern Union common stock (before adjustment for any subsequent stock dividends) and the assumption of approximately $1.159 billion of debt. The Company funded the cash portion of the acquisition with approximately $420 million in cash proceeds it received for the January 1, 2003 sale of its Texas operations, $125 million of the net proceeds from concurrent common stock and equity units offerings, and with working capital available to the Company. The Panhandle Energy entities include Panhandle Eastern Pipe Line Company, Trunkline Gas Company, Sea Robin Pipeline Company, Trunkline LNG and Southwest Gas Storage Company. Collectively, the pipeline assets operate more than 10,000 miles of interstate pipelines that transport natural gas from the Gulf of Mexico, South Texas and the Panhandle regions of Texas and Oklahoma to major U.S. markets in the Midwest and Great Lakes region. Trunkline LNG, located on Louisiana's Gulf Coast, operates one of the nation's largest liquefied natural gas (LNG) import terminals. The assets of Panhandle Energy are included in the condensed consolidated balance sheet of the Company at June 30, 2003 and the results of operations from Panhandle Energy have been included in the condensed consolidated statement of operations since June 11, 2003. Management's estimate of the fair value of Panhandle Energy's assets is preliminary and may be revised to reflect independent appraisals, which have not been completed as of the date of this Current Report on Form 8-K. NOTE 3 -- OTHER INCOME (EXPENSE), NET Other income for the three-month period ended June 30, 2003 was $422,000 compared with other expense of $12,076,000 in 2002. Other income for the three-month period ended June 30, 2003 includes $567,000 of realized gains on the sale of investment securities and income of $298,000 generated from the sale and/or rental of gas-fired equipment and appliances by various operating subsidiaries. These items were partially offset by $476,000 of legal costs related to ongoing litigation from the unsuccessful acquisition of Southwest Gas Corporation (Southwest). Other expense for the three-month period ended June 30, 2002 includes a charge of $10,380,000 to reserve for the impairment of the cost of the Company's investments in a technology company and $2,994,000 of legal costs associated with Southwest. This was partially offset by a gain of $1,203,000 realized through the sale of the propane assets of PG Energy Services Inc. and $1,004,000 of realized gains on the sale of investment securities. Other income for the year-ended June 30, 2003 was $19,371,000 compared with $14,278,000 in 2002. Other income for the year-ended June 30, 2003 includes a gain of $22,500,000 on the settlement of the Company's claims against Southwest Gas Corporation and other parties related to the Southwest litigation, which was partially offset by $5,949,000 of related legal costs, and income of $2,016,000 generated from the sale and/or rental of gas-fired equipment and appliances by various operating subsidiaries. Other income for the year-ended June 30, 2002 includes gains of $17,166,000 generated through the settlement of several interest rate swaps, the recognition of $6,204,000 in previously recorded deferred income related to financial derivative energy trading activity of a wholly-owned subsidiary, a gain of $4,653,000 realized through the sale of marketing contracts held by PG Energy Services Inc., income of $2,234,000 generated from the sale and/or rental of gas-fired equipment and appliances, a gain of $1,203,000 realized through the sale of the propane assets of PG Energy Services Inc., $1,004,000 of realized gains on the sale of investment securities, and power generation and sales income of $971,000 from PEI Power Corporation. These items were partially offset by an investment reserve of $10,380,000, $9,100,000 of legal costs associated with Southwest, and a $1,500,000 loss on the sale of South Florida Natural Gas, a natural gas division of Southern Union, and Atlantic Gas Corporation, a Florida propane subsidiary of the Company. SOUTHERN UNION COMPANY AND SUBSIDIARIES SELECTED STATISTICAL DATA The following table sets forth certain information regarding the Company's gas utility operations for the quarter- and year-ended June 30, 2003 and 2002:
Three Months Twelve Months Ended June 30, Ended June 30, -------------------------- ---------------------------- 2003 2002 2003 2002 ----------- ----------- ------------ ------------ Average number of gas sales customers served: Residential ................................. 844,483 840,921 840,942 836,658 Commercial .................................. 102,029 95,956 101,018 95,038 Industrial and irrigation ................... 761 4,086 771 4,017 Public authorities and other ................ 518 378 518 364 ----------- ----------- ----------- ----------- Total average customers served ......... 947,791 941,341 943,249 936,077 =========== =========== =========== =========== Gas sales in millions of cubic feet (MMcf) Residential ................................. 15,669 15,304 83,674 70,090 Commercial .................................. 6,106 5,587 33,856 27,260 Industrial and irrigation ................... 569 964 2,822 3,965 Public authorities and other ................ 54 27 362 168 ----------- ----------- ----------- ----------- Gas sales billed ....................... 22,398 21,882 120,714 101,483 Net change in unbilled gas sales ............ (5,922) (7,219) 1,401 (371) ----------- ----------- ----------- ----------- Total gas sales ........................ 16,476 14,663 122,115 101,112 =========== =========== =========== =========== Gas sales revenues (thousands of dollars): Residential ................................. $ 173,210 $ 144,187 $ 803,000 $ 679,272 Commercial .................................. 59,948 45,443 292,497 234,798 Industrial and irrigation ................... 4,526 7,606 21,870 31,521 Public authorities and other ................ 551 236 3,178 1,508 ----------- ----------- ----------- ----------- Gas revenues billed .................... 238,235 197,472 1,120,545 947,099 Net change in unbilled gas sales revenues ... (67,045) (48,613) (9,383) (5,663) ----------- ----------- ----------- ----------- Total gas sales revenues ............... $ 171,190 $ 148,859 $ 1,111,162 $ 941,436 =========== =========== =========== =========== Gas sales revenue per thousand cubic feet billed: Residential ................................. $ 11.05 $ 9.42 $ 9.60 $ 9.69 Commercial .................................. 9.82 8.13 8.64 8.61 Industrial and irrigation ................... 7.95 7.89 7.75 7.95 Public authorities and other ................ 10.20 8.74 8.78 8.98 Weather: Degree days: Missouri Gas Energy service territories 373 413 5,105 4,419 PG Energy service territories .......... 869 786 6,654 5,373 New England service territories ........ 954 767 6,143 4,980 Percent of 30-year measure: Missouri Gas Energy service territories 82% 90% 98% 85% PG Energy service territories .......... 111% 100% 106% 86% New England service territories ........ 126% 95% 107% 85% Gas transported in millions of cubic feet ........ 13,855 14,561 66,218 65,757 Gas transportation revenues (thousands of dollars) $ 7,466 $ 7,385 $ 38,734 $ 36,498
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. SOUTHERN UNION COMPANY ----------------------- (Registrant) Date August 6, 2003 By DAVID J. KVAPIL -------------------- ------------------------------- David J. Kvapil Executive Vice President and Chief Financial Officer EXHIBIT INDEX Exhibit Number Description - -------------- -------------------------------------------------------------- 99.a Press Release issued by Southern Union Company dated August 6, 2003 EXHIBIT 99.a 03-22 For further information: Richard N. Marshall Vice President and Treasurer 570/829-8662 SOUTHERN UNION REPORTS FISCAL YEAR 2003 RESULTS; STRONG EARNINGS REFLECT MANAGEMENT'S FOCUS Conference Call & Webcast at 2 p.m. ET Today WILKES-BARRE, Pa., - (BUSINESS WIRE)- August 6, 2003 - Southern Union Company ("Southern Union" or the "Company") (NYSE: SUG) announced today that net earnings for the fiscal year ended June 30, 2003, were $76,189,000 ($1.29 per common share, diluted for outstanding options and warrants - hereafter referred to as "per share") compared with net earnings of $19,624,000 ($.33 per share) in 2002. Excluding certain non-recurring gains and charges (described below) as well as results of the discontinued Texas operations, net earnings for fiscal year 2003 were $33,031,000 ($.56 per share) compared with $11,123,000 ($.19 per share) in 2002. All per share data herein reflects Southern Union's 5% common stock dividend distributed on July 31, 2003. "We are extremely pleased with our 2003 results," noted Thomas F. Karam, Southern Union's President and Chief Operating Officer. "Excluding the gain on the sale of the Texas operations, our 2003 net earnings were $.97 cents per share - as adjusted for the 5% stock dividend. This reflects the best earnings performance by Southern Union in over 15 years and achievement of our previously stated earnings guidance. These earnings are meaningful in that we delivered on our operating commitments while at the same time working to successfully integrate our Panhandle acquisition." Fiscal year 2003 results include an after-tax gain of $14,462,000 ($.24 per share) on the settlement of the Company's claims against Southwest Gas Corporation ("Southwest Gas") and others related to Southern Union's blocked acquisition attempt. This gain was partially offset by related litigation expense totaling $3,824,000 ($.06 per share), net of tax. Net earnings of the discontinued Texas operations included in fiscal year 2003 were $32,520,000 ($.55 per share), including a $18,928,000 ($.32 per share) after-tax gain on sale. Fiscal year 2002 results reflected after-tax gains totaling $5,291,000 ($.09 per share) generated from the settlement of interest rate swaps and a $1,516,000 ($.02 per share) net after-tax gain on the sale of certain subsidiaries and non-core assets. Fiscal year 2002 results also reflected a restructuring charge totaling $8,988,000 ($.15 per share), net of tax, a goodwill impairment charge of $1,417,000 ($.02 per share), a charge of $3,200,000 ($.06 per share), net of tax, recorded in the fourth quarter ended June 30, 2002, to reserve for the impairment of a technology investment, and after-tax litigation expense totaling $2,805,000 ($.05 per share) related to the Southwest Gas case. Net earnings of the discontinued Texas operations included in fiscal year 2002 were $18,104,000 ($.31 per share). For the quarter ended June 30, 2003, the Company reported a net loss of $10,634,000 ($.18 per average common share) compared with a net loss of $13,511,000 ($.24 per average common share) in 2002. Because of the seasonal nature of the natural gas distribution business, Southern Union typically records a fourth quarter loss. Significant fiscal 2003 events, as well as factors affecting this year's earnings performance, include: o The return of colder weather in the Company's operating divisions; Southern Union's New England Gas Company (Rhode Island and Massachusetts) division recorded weather at 107% of normal, its PG Energy (Pennsylvania) division recorded weather at 106% of normal and its Missouri Gas Energy division recorded weather at 98% of normal. o Between August 2002 and January 2003, the Company settled its claims against Southwest Gas Corporation ("Southwest Gas") (NYSE: SWX) and others related to Southern Union's blocked acquisition of Southwest Gas in 1999. o In January 2003, the Company sold Southern Union Gas Company, its Austin-based natural gas operating division, and other related assets to ONEOK, Inc. (NYSE: OKE) for approximately $420 million in cash. o In June 2003, Southern Union issued $175 million of common stock and $125 million of equity-linked securities in connection with its acquisition of Panhandle Eastern Pipe Line Company and its subsidiaries (collectively referred to as "Panhandle Energy") from CMS Energy Corporation ("CMS Energy") (NYSE: CMS). o In June 2003, Southern Union closed on its acquisition of Panhandle Energy from CMS Energy for approximately $1.8 billion. The results of certain transactions described herein are presented on an after-tax basis, calculated by applying the applicable tax rate to the related transaction. Presentation of transactions on an after-tax basis has the effect of demonstrating such transaction's actual effect on the Company's results of operations. In addition, operating results in the periods presented include certain non-recurring items. Management believes that a presentation of earnings excluding such non-recurring items on an after-tax basis provides investors with more meaningful information with which to compare the Company's operating results between comparable periods. Southern Union will host a live Webcast and conference call today at 2 p.m. ET (1 p.m. CT) to discuss fiscal year 2003 results and outlook. To participate, visit www.southernunionco.com or call 1-800-249-3584 and refer to the Southern Union earnings call. A replay of the call will be available for one week by dialing 1-800-633-8284 and entering reservation number 21155792. The Company expects to file its Form 10-K in late September, with its annual shareholder meeting tentatively scheduled for early November. Southern Union Company, headquartered in Wilkes-Barre, Pennsylvania, is engaged primarily in the transportation and distribution of natural gas. Through its Panhandle Energy subsidiary, the Company owns and operates Panhandle Eastern Pipe Line Company, Trunkline Gas Company, Sea Robin Pipe Line, Trunkline LNG and Southwest Gas Storage Company. Collectively, the pipeline assets operate more than 10,000 miles of interstate pipelines that transport natural gas from the Gulf of Mexico, South Texas and the Panhandle regions of Texas and Oklahoma to major U.S. markets in the Midwest and Great Lakes region. Trunkline LNG, located on Louisiana's Gulf Coast, is the nation's largest liquefied natural gas import terminal. Through its local distribution companies, Missouri Gas Energy, PG Energy and New England Gas Company, Southern Union also serves nearly one million natural gas end user customers in Missouri, Pennsylvania, Massachusetts and Rhode Island. For further information, visit www.southernunionco.com. This release and other Company reports and statements issued or made from time to time contain certain "forward-looking statements" concerning projected future financial performance, expected plans or future operations. Southern Union Company cautions that actual results and developments may differ materially from such projections or expectations. Important factors could cause actual results to differ materially from the forward-looking projections or expectations. These factors include, but are not limited to: weather conditions or weather-related damage in the Company's service territories; technological developments in energy production, delivery and usage; cost of gas or availability due to higher demand, shortages, transportation problems or other developments, environmental incidents or gas pipeline system constraints; regulatory and court decisions; the receipt of timely and adequate rate relief; the achievement of efficiencies and the purchase and implementation of new technologies for attaining such efficiencies; disruptions in the normal commercial insurance and surety bond markets that may increase costs or reduce traditional insurance coverage; impact of relations with labor unions of bargaining unit employees; the effect of any stock repurchases; and the effect of strategic initiatives (including any recent, pending or potential acquisition or merger, recent corporate restructuring activities, sales of non-core assets and any related financing arrangements including refinancings and debt repurchases) on earnings and cash flow. Following are the unaudited reconciliations of reported net earnings (GAAP basis) to earnings before non-recurring items and discontinued operations of Southern Union Company and Subsidiaries for the twelve-month period ended June 30, 2003 and 2002 (amounts in thousands except per share amounts):
Twelve months ended June 30, --------------------------------------------- 2003 2002 ---------------------- --------------------- Reported Net Earnings and Earnings Per Share - GAAP Basis ..... $ 76,189 $ 1.29 $ 19,624 $ 0.33 Gain on Sale of Texas operations ......................... (18,928) (0.32) -- -- Net Earnings of Discontinued Texas operations ............ (13,592) (0.23) (18,104) (0.31) Gain on Settlement of Southwest Gas Claims ............... (14,462) (0.24) -- -- Southwest Gas Litigation Costs ........................... 3,824 0.06 2,805 0.05 Gain on Settlement of Interest Rate Swaps ................ -- -- (5,291) (0.09) Gain on Sale of Subsidiaries and Non-Core Assets ......... -- -- (1,516) (0.02) Restructuring Charge ..................................... -- -- 8,988 0.15 Investment Impairment Reserve ............................ -- -- 3,200 0.06 Goodwill Impairment Charge ............................... -- -- 1,417 0.02 -------- ----- -------- ----- Earnings Before Non-Recurring Items and Discontinued Operations $ 33,031 $ 0.56 $ 11,123 $ 0.19 -------- ----- -------- -----
Following are the unaudited comparative, summarized financial results of Southern Union Company and Subsidiaries for the three- and twelve-month periods ended June 30, 2003 and 2002 (amounts in thousands except shares and per share amounts):
Three months ended Twelve months ended June 30, June 30, ---------------------------------- ------------------------- 2003 2002 (a) 2003 (b) 2002 (a) --------------- --------------- ----------- ----------- Operating revenues .......................................... $ 207,030 $ 153,717 $ 1,188,507 $ 980,614 =============== ================ =========== =========== Net operating margin (c) .................................... $ 89,516 $ 70,467 $ 423,411 $ 374,128 =============== ================ =========== =========== Earnings (loss) from continuing operations .................. $ (11,898) $ (15,027) $ 43,669 $ 1,520 =============== ================ =========== =========== Earnings from discontinued operations ....................... $ 1,264 $ 1,516 $ 32,520 $ 18,104 =============== ================ =========== =========== Net earnings (loss) ......................................... $ (10,634) $ (13,511) $ 76,189 $ 19,624 =============== ================ =========== =========== Net earnings (loss) from continuing operations per share (d): Basic .................................................. $ (0.20) $ (0.27) $ 0.76 $ 0.03 =============== ================ =========== =========== Diluted ................................................ $ (0.20) $ (0.27) $ 0.74 $ 0.03 =============== ================ =========== =========== Net earnings (loss) per share (d): Basic ................................................... $ (0.18) $ (0.24) $ 1.33 $ 0.35 =============== ================ =========== =========== Diluted ................................................. $ (0.18) $ (0.24) $ 1.29 $ 0.33 =============== ================ =========== =========== Weighted average shares outstanding (d): Basic ................................................... 59,807,049 55,876,938 57,176,843 56,060,425 =============== ================ =========== =========== Diluted ................................................. 59,807,049 55,876,938 59,017,861 59,132,567 =============== ================ =========== ===========
(a) The three- and twelve-month periods ended June 30, 2002, include an after-tax charge of $3,200,000 to reserve for the impairment of the cost of Southern Union's investment in a technology company. The twelve-month period ended June 30, 2002, also includes an after-tax restructuring charge of $8,988,000, a goodwill impairment charge of $1,417,000 and after-tax litigation expense totaling $2,805,000 related to the Southwest Gas case. The impact of these items was partially offset by $5,291,000 in after-tax gains generated from the settlement of several interest rate swaps and $1,516,000 in after-tax gains from the sale of subsidiaries and non-core assets. (b) The twelve-month period ended June 30, 2003, includes an after-tax gain of $14,462,000 on the settlement of the Company's claims against Southwest Gas and others, which was partially offset by related litigation expense of $3,824,000, net of tax. The twelve-month period ended June 30, 2003, also includes an $18,928,000 after-tax gain on sale of the discontinued Texas operations, which is reflected in the net earnings from discontinued operations. (c) Net operating margin consists of operating revenues less gas purchase costs and revenue-related taxes. (d) All periods have been adjusted for the 5% stock dividend distributed on July 31, 2003. ##### -----END PRIVACY-ENHANCED MESSAGE-----