- Earnings Per Share from Continuing Operations:
83-Cent Loss vs. 49-Cent Income
- Excluding Merger and Other Special Items: 33-Cent Income vs. 34-Cent Income
- Oil Production Up 45 Percent, Gas Production Up 18 Percent
PITTSBURGH, July 20 /PRNewswire/ -- Consolidated Natural Gas Company
(NYSE: CNG) today reported a 1999 second quarter loss from continuing
operations of $80 million, or 83 cents a diluted share, compared with income
of $46.8 million, or 49 cents a diluted share, a year earlier. The loss
includes costs related to the pending merger with Dominion Resources, Inc., of
$165.3 million, or $1.12 a diluted share after taxes, and workforce reduction
costs of $6.3 million, or four cents a diluted share after taxes. The second
quarter results for 1998 included a gain of $13.9 million, or 15 cents a
diluted share, in connection with a favorable resolution of a regulatory
contingency.
Excluding special items for both periods, income from continuing
operations was 33 cents a diluted share in the second quarter of 1999,
compared to 34 cents in the second quarter of 1998.
The merger costs related primarily to the surrender and cash out of stock
options and awards pursuant to the provisions of the company's stock incentive
plans as a result of shareholder approval of the merger, plus other merger
expenses. The surrender and cash out covered stock options granted since 1989
to about 700 employees. The merger costs were anticipated and are consistent
with estimated amounts disclosed previously in a joint proxy
statement/prospectus sent to shareholders prior to shareholder approval.
"Our fundamental, basic business remains sound," said George A. Davidson,
Jr., CNG's chairman and chief executive officer. "Our oil and gas production
continues to increase and our regulated businesses remain solid. We bring a
strong business into our merger with Dominion Resources, a merger which we
expect to close as soon as the end of 1999."
Results by Business Component
Here are the 1999 second quarter results for each of the company's
business segments:
Exploration and Production
Pretax operating income for exploration and production was $31.8 million
in the second quarter of 1999, up from $28.2 million a year earlier. The
improved results were due mainly to increased production of oil and natural
gas. Benefits of the higher production were partly offset by lower prices for
both oil and natural gas.
Production of natural gas rose to 46.6 billion cubic feet (Bcf), an
increase of 7.2 Bcf, or 18 percent from a year earlier. Oil production rose
to 2.8 million barrels, an increase of 900,000 barrels, or 45 percent from a
year earlier. The oil increase primarily came from the new
Nautilus/Nemo/Atlantis complex in the Gulf of Mexico.
The average wellhead price for CNG's gas production was $2.18 a thousand
cubic feet, down 13 cents from a year earlier. CNG's average wellhead price
for oil was $12.21 a barrel in the second quarter, down 50 cents from a year
earlier.
Natural Gas Distribution
Pretax operating income for the company's four local gas utilities was
$2.9 million in the second quarter of 1999, down from $14.5 million a year
earlier. Workforce reduction costs related to a previously announced
restructuring reduced 1999 operating results by $7.8 million. Increased
maintenance expenses, among other minor timing items, also affected this
segment.
The weather in the second quarter of 1999 was 20 percent warmer than
normal. The weather in the second quarter of 1998 was 18 percent warmer than
normal.
Distribution throughput -- the amount of gas sold and transported -- was
74.7 Bcf in the second quarter of 1999, compared with 72.1 Bcf a year earlier.
Natural Gas Transmission
Pretax operating income for the company's interstate gas pipeline and
storage business was $37.7 million in the second quarter, down from
$46.2 million a year earlier. The 1998 figure included $13.9 million for the
favorable resolution of a regulatory contingency. The transmission segment
benefited in the 1999 second quarter from lower operating expenses and other
items.
Transmission throughput in the 1999 second quarter was 112.8 Bcf, down
from 119.7 Bcf a year earlier.
Consolidated Natural Gas Company is one of the nation's largest producers,
transporters, distributors and retail marketers of natural gas. The company's
natural gas transmission and distribution operations serve customers in
Pennsylvania, Ohio, Virginia, West Virginia, New York and other states in the
Northeast and Mid-Atlantic regions. CNG explores for and produces oil and
natural gas in the United States and Canada. The company also selectively
participates in energy businesses abroad.
This press release contains forward-looking statements. The company
wishes to caution readers that the assumptions which form the basis for
forward-looking statements with respect to or that may impact earnings for
fiscal 1999, and thereafter, include many factors that are beyond the
company's ability to control or estimate precisely, such as estimates of
future market conditions and the behavior of other market participants. Other
factors include, but are not limited to, weather conditions, economic
conditions in the company's service territory, fluctuations in energy-related
commodity prices, conversion activity, other marketing efforts and other
uncertainties.
CNG's recent news releases are available 24 hours a day on the Internet,
by fax machine, or by voice recording. On the Internet, use CNG's Web site:
http://www.cng.com. For faxing, call 1-800-758-5804 on a touch-tone phone and enter
CNG's extension number, which is 203456. From a menu, you will then be able
to select releases that will be faxed to you immediately without charge. For
voice recordings, call 1-888-CNG-NEWS. This line is toll-free.
Consolidated Natural Gas Company (CNG)
Three Months Ended June 30, 1999 1998
Total operating revenues $566,435,000 $530,428,000
Income from continuing operations $(80,024,000)(a) $46,814,000
Discontinued operations ------- $10,989,000
Net income $(80,024,000)(a) $57,803,000
Earnings per common share -- diluted
Income from continuing operations ($0.83)(a) $0.49
Discontinued operations ------- $0.11
Net income ($0.83)(a) $0.60
Earnings per common share -- basic
Income from continuing operations ($0.84) $0.49
Discontinued operations ------- $0.12
Net income ($0.84) $0.61
Average common shares -- diluted 96,934,000 96,478,000
Average common shares -- basic 95,763,000 95,447,000
Six Months Ended June 30, 1999 1998
Total operating revenues $1,612,883,000 $1,529,593,000
Income from continuing operations $58,963,000(a) $184,847,000
Discontinued operations ------- $(49,149,000)
Net income $58,963,000(a) $135,698,000
Earnings per common share -- diluted
Income from continuing operations $0.61(a) $1.92
Discontinued operations ------ $(0.50)
Net income $0.61(a) $1.42
Earnings per common share -- basic
Income from continuing operations $0.62 $1.96
Discontinued operations ------- $(0.52)
Net income $0.62 $1.44
Average common shares - diluted 96,572,000 96,957,000
Average common shares - basic 95,571,000 94,234,000
(a) Includes impact of merger related expense of $165,338,000, or $1.12 a
diluted share after taxes, for costs related to the pending merger with
Dominion Resources, Inc.
SOURCE Consolidated Natural Gas Company
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Related links:
http://www.cng.com
Company News On-Call:
http://www.prnewswire.com/comp/203456.html or fax,
800-758-5804, ext. 203456
CONTACT:
Dan Donovan of Consolodiated Natural Gas,
412-690-1370
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