In an attempt to improve the company’s cash flow and earnings, Southern Union Co. said it intends to implement corporate reorganization and restructuring, a move it expects will save $35-40 million annually. As part of the restructuring, Southern Union said it is offering voluntary early retirement programs in some of its operating divisions and a limited reduction in workforce within its corporate division.

The company said it has sweetened its retirement benefits and will offer the package to approximately 400 eligible employees across its operating divisions. Southern Union also said it is decentralizing some of its corporate management functions and transferring them to its divisions in Texas, Missouri, Pennsylvania and New England. The reduction in workforce will take place in certain corporate areas in the company’s Austin and Kansas City offices. Severance packages have been offered to forty-eight corporate employees.

“The actions taken today are a cornerstone of our Cash-Flow Improvement Plan. We are now positioned to achieve better financial results for our investors, as a result of the very favorable return from the expected one-time charge,” stated Thomas F. Karam, Southern Union president. “We will continually seek ways to further improve our operating efficiency, while always ensuring safe, reliable and superior service to our customers.”

In conjunction with the restructuring, Southern Union said it expects to take a one-time charge of between $30-35 million in its first quarter ending Sept. 30. The company said this charge may be reduced subject to favorable regulatory treatment of the Early Retirement Program costs in certain operating divisions.

Southern Union reported on Aug. 8 that net earnings for the fiscal year ended June 30 were $57,285,000 ($1.04 per share) compared with net earnings of $9,845,000 ($0.21 per share) in 2000. The sizeable increase was attributed to the sale of a portion of Southern Union’s holdings in Capstone Turbine Corp., which realized after-tax gains of $43,726,000. Excluding the effect of the sale, net earnings were $13,559,000 ($0.25 per share) for the fiscal year.

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