KANSAS CITY, Mo., May 6, 2008 (PRIME NEWSWIRE) -- Aquila, Inc. (NYSE:ILA) reported today that its electric and gas utilities in Missouri and four other states delivered a 93 percent improvement in EBITDA performance. In the first quarter of 2008, EBITDA for Aquila's electric and gas utilities was $68.1 million, up $32.8 million from $35.3 million reported in 2007. This improvement in utility results was accompanied by a decline in merger-related costs compared to those incurred in the first quarter of 2007.
"Our earnings improvement and operational performance demonstrates the tremendous dedication and commitment of Aquila employees," said Richard C. Green, Aquila's chairman and chief executive officer. "We are starting the year with good momentum and will be ready to turn over strong utilities when our transactions with Great Plains Energy and Black Hills Corporation close."
On a consolidated basis, Aquila reported net income of $8.5 million for the quarter ended Mar. 31, 2008, or fully diluted earnings per share of two cents, compared to net loss of $24.3 million in 2007, or fully diluted loss per share of six cents. Sales for the quarter were $483.1 million in 2008 versus $444.2 million in 2007.
Segment EBITDA
Electric Utilities EBITDA increased $26.7 million from 2007, and Gas Utilities reported an EBITDA increase of $6.1 million. Merchant Services EBITDA loss of $1.8 million was $2.3 million better than the loss of $4.1 million reported in 2007, and the Corporate and Other EBITDA loss of $.3 million in 2008 was $10.0 million less than the $10.3 million loss in 2007.
Electric Utilities
Gross profit was $88.5 million in 2008, an increase of $32.2 million from 2007. Earnings rose primarily because a Missouri rate order granted an increase in base rates and authorized 95% recovery of actual fuel costs over base rates effective June 1, 2007. Customer demand for power also rose in Missouri because of colder than normal weather and favorable customer usage.
Operation and maintenance expense increased in 2008 compared to 2007, primarily due to a provision related to the South Harper litigation.
Gas Utilities
Gross profit was $70.5 million in 2008, $6.8 million higher than 2007 due to favorable weather and other volume increases and rate increases in Kansas and Nebraska.
Merchant Services
Merchant Services reported a gross loss of $1.4 million in 2008, compared to a gross loss of $3.4 million in the first quarter of 2007. The primary factor contributing to the decrease in the gross loss was the expiration of long-term gas delivery contracts since the first quarter of 2007.
Corporate and Other
Corporate and Other reported in 2008 an EBITDA loss of $.3 million, compared to a $10.3 million loss in 2007. The 2007 EBITDA loss included approximately $8.5 million of costs associated with the pending merger, including financial advisor fees, employee retention costs and legal and other costs.
Discontinued Operations
Discontinued Operations EBITDA of $8.8 million in 2007 were primarily related to the company's former Kansas electric utility operations, which were sold on April 1, 2007.
Conference Call, Webcast and Additional Information
On Thursday, May 8 at 9:30 a.m. Eastern Time, Aquila will host a conference call and webcast in which senior executives will review first quarter 2008 results. Participants will be Richard C. Green, Chief Executive Officer, Beth Armstrong, Senior Vice President and Chief Accounting Officer, and Jon Empson, Senior Vice President of Regulated Operations.
To access the live webcast via the Internet, go to Aquila's website at www.aquila.com and click "Presentations & Webcasts" in the "Investor Information" section. Listeners should allow at least five minutes to register and access the presentation. For those unable to listen to the live broadcast, an online replay will be available for one week at the same location on the website ("Investor Information"), beginning approximately two hours after the presentation. Replay also will be available by telephone through Thursday, May 15, 2008 at 800-405-2236 in the United States and at 303-590-3000 for international callers. Callers need to enter the access code 11111245# when prompted.
Based in Kansas City, Mo., Aquila owns electric power generation and operates electric and natural gas transmission and distribution networks serving over 900,000 customers in Colorado, Iowa, Kansas, Missouri and Nebraska. More information is available at www.aquila.com.
The Aquila, Inc. logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=1753
"EBITDA"
Aquila uses the term "earnings before interest, taxes, depreciation and amortization (EBITDA)" as a performance measure for segment financial analysis. The term is not meant to be considered an alternative to net income or cash flows from operating activities, which are determined in accordance with generally accepted accounting principles. In addition, the term may not be comparable to similarly titled measures used by other companies.
AQUILA, INC.
Consolidated Statements of Income
3 Months Ended
March 31,
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In millions, except per share amounts 2008 2007
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Sales $ 483.1 $ 444.2
Cost of sales 325.5 327.6
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Gross profit 157.6 116.6
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Operating expenses:
Operation and maintenance expense 87.3 91.0
Taxes other than income taxes 7.3 8.9
Restructuring charges -- 1.6
Net loss on asset sales and other charges -- --
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Total operating expenses 94.6 101.5
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Other income (expense) 3.0 5.8
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Earnings before interest, taxes, depreciation
and amortization 66.0 20.9
Depreciation and amortization expense 29.1 27.2
Total interest expense 32.0 34.7
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Income (loss) from continuing operations before 4.9 (41.0)
income taxes
Income tax expense (benefit) (3.6) (13.8)
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Income (loss) from continuing operations 8.5 (27.2)
Earnings from discontinued operations,
net of tax -- 2.9
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Net income (loss) $ 8.5 $ (24.3)
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Weighted average shares outstanding - diluted 376.1 375.5
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Earnings (loss) per share from continuing
operations - diluted $ .02 $ (.07)
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Earnings per share from
discontinued operations - diluted -- .01
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Net income (loss) per share - diluted $ .02 $ (.06)
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AQUILA, INC.
Segment EBITDA Reconciliation to Income (Loss)
from Continuing Operations Before Income Taxes
3 Months Ended March 31,
---------------------- Favorable
In millions 2008 2007 (Unfavorable)
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Utilities:
Electric Utilities $ 32.9 $ 6.2 $ 26.7
Gas Utilities 35.2 29.1 6.1
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Total Utilities 68.1 35.3 32.8
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Merchant Services (1.8) (4.1) 2.3
Corporate and Other (.3) (10.3) 10.0
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Total EBITDA 66.0 20.9 45.1
Depreciation and amortization 29.1 27.2 (1.9)
Interest expense 32.0 34.7 2.7
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Income (loss) from continuing
operations before income taxes $ 4.9 $ (41.0) $ 45.9
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AQUILA, INC.
Consolidated Balance Sheets
March 31, December 31,
In millions 2008 2007
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ASSETS
Cash and cash equivalents $ 28.2 $ 34.4
Funds on deposit 33.9 41.3
Accounts receivable, net 243.8 256.1
Inventories and supplies 78.7 102.6
Price risk management assets 46.0 32.0
Regulatory assets, current 43.7 58.5
Other current assets 21.1 30.7
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Total current assets 495.4 555.6
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Utility plant, net 2,088.3 2,022.0
Non-utility plant, net 129.0 122.8
Price risk management assets 16.4 13.1
Goodwill, net 111.0 111.0
Regulatory assets 118.2 125.1
Deferred charges and other assets 41.1 44.0
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Total Assets $ 2,999.4 $ 2,993.6
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current maturities of long-term debt $ 2.4 $ 2.4
Short-term debt 100.0 25.0
Accounts payable 128.4 190.7
Accrued interest 31.4 46.4
Regulatory liabilities, current 12.4 19.4
Accrued compensation and benefits 11.5 28.4
Pension and post-retirement
benefits, current 3.3 3.3
Other accrued liabilities 63.1 48.6
Price risk management liabilities 30.6 31.2
Customer funds on deposit 23.0 26.1
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Total current liabilities 406.1 421.5
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Long-term debt, net 1,034.1 1,035.4
Deferred income taxes and credits -- --
Price risk management liabilities .6 .5
Pension and post-retirement benefits 46.8 46.4
Regulatory liabilities 92.5 80.4
Deferred credits 53.4 53.7
Common shareholders' equity 1,365.9 1,355.7
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Total Liabilities and
Shareholders' Equity $ 2,999.4 2,993.6
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