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Western Resources Takes 1Q 2002 Loss Due to Accounting Charge
Brought lower by taking a one-time charge for severance and an impairment related to the adoption of new accounting standards, Topeka, KS-based Western Resources reported a consolidated net loss of $652.4 million (-$9.14 per share) in the first quarter of 2002, compared to net earnings of $ 4.5 million ($0.06 per share) in the 2001 quarter.
The adoption of new accounting standards contributed a non-cash net charge of $657 million ($9.20 per share) during the quarter. Without the one-time charges, Western Resources reported consolidated operating income of $0.36 per share in the first quarter of 2002.
The company said it expects to have earnings from operations of $1.27 per share for the 2002 fiscal year, excluding one-time items, consistent with projected 2002 earnings before interest, taxes (EBIT) and earnings before interest, taxes, amortization and depreciation (EBITDA) of $325 million and $525 million, respectively, for Westar Energy — the electric utility subsidiary that serves 640,000 customers in Kansas — and projected 2002 cash flow of $49 million for Westar Industries. The company said that although earnings exceeded budget during the quarter, the forecast 2002 fiscal year earnings have not been changed because its full-year results are dependent upon normal summer weather.
Westar Energy contributed EBIT of $57 million in the first quarter of 2002, excluding severance, compared to budgeted first-quarter EBIT of $51 million. EBITDA for Westar Energy totaled $105 million in the first quarter of 2002, excluding severance, compared to budgeted first-quarter EBITDA of $101 million. The subsidiary’s sales in the first quarter of 2002 totaled 7.9 million MWh, an increase of 30% over budgeted first-quarter sales of 6.5 million MWh, and an increase of 22% over first-quarter 2001 sales of 6.5 million MWh.
“We are extremely pleased with the first-quarter performance of our utility operations,” stated Doug Sterbenz, senior vice president, generation and marketing. “Results were above budget despite lower retail demand due to the warm winter, lower prices in the wholesale electricity markets and the extensive efforts directed to recovery from the severe winter ice storm.”
Western Resources also said that its investment in ONEOK Inc. contributed $0.16 per share to first-quarter 2002 earnings, compared to $0.15 per share in the prior year. Western Resources has a 44.7% interest in the Tulsa-based natural gas company, which serves more than 1.4 million customers.
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