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Aquila Affiliate Takes $1.7 M Charge, Cuts 60 Employees

March 8, 1999
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Aquila Affiliate Takes $1.7 M Charge, Cuts 60 Employees

Citing a restructuring plan formulated to deal with poor 1998 earnings, Aquila Energy's Aquila Gas Pipeline Corp. (AQP) announced Tuesday it will cut 60 people from its staff of 310. The cuts will inflict a $1.7 million pre tax charge on the company's earnings.

In 1998, AQP fell prey to low oil and gas prices. The company was set to be auctioned off over the summer but was taken off the auction block when low gas liquids prices threatened Aquila Energy's ability to realize full value.

For the year, AQP's net income was $4.9 million or $.17 per share compared to 1997 net income of $25.2 million or $.86 per share. Cash flow from operations was $32.6 million in 1998, down from the 1997 level of $56.7 million.

"To be viable in this environment, we had to take a hard look at our business processes and our structure to determine the best way to run our business going forward," said Joe Becraft, CEO of Aquila Gas Pipeline. "The reorganization announced today was developed as a result of this undertaking."

The company, which is 82% owned by Aquila Energy, expects the measures to save up to $5 million annually. The layoffs will occur in the San Antonio headquarters and various field locations.

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