Securities and Exchange Commission
Washington, DC 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act 1934
Date of Report July 7, 1997
(Date of earliest event reported)
CalEnergy Company, Inc.
(Exact name of registrant as specified in its charter)
Delaware 1-9874 94-2213782
State of (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
302 South 36th Street, Suite 400, Omaha, NE 68131
(Address of principal executive offices) Zip Code
Registrant's Telephone Number, including area code: (402) 341-4500
N/A
(Former name or former address, if changed since last report)
Item 5. Other Events
The Registrant announced the impact of the U.K. so called "Windfall Tax"
in the attached Press Release dated July 7, 1997.
Item 7. Financial Statements and Exhibits
Exhibit 1 - Press Release dated July 7, 1997
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CalEnergy Company, Inc.
By: \s\ Douglas L. Anderson
Douglas L. Anderson
Assistant Secretary and
Assistant General Counsel
Dated: July 7, 1997
FOR IMMEDIATE RELEASE Exhibit 1
Craig M. Hammett - Vice President, Chief Financial Officer 402-341-4500
Jeffrey S. Laudin - Manager, Investor Relations 402-341-4500
CalEnergy Announces No Net Additional Cash Impact
Resulting from Northern Electric's U.K. Windfall Tax
OMAHA, NEBRASKA, Monday, July 7, 1997 - CalEnergy Company, Inc.
("CalEnergy") (NYSE, LSE and PSE Symbol: CE) announced today that the so-
called "Windfall Tax" which had been proposed by the United Kingdom Labour
Party and the details of which were released July 2, 1997 as part of the
Labour Government's budget are consistent with the cash impact which CalEnergy
had estimated prior to its acquisition of Northern Electric plc. The tax will
be payable in two installments over two fiscal years.
CalEnergy further announced that it plans to take a one-time charge in
the third quarter of 1997 to account for the anticipated windfall tax. The
net income impact of the one-time charge is expected to be approximately $136
million or $2.06 per share.
At the time of the acquisition, CalEnergy had accounted for the
potential windfall tax as a purchase accounting contingent liability based on
the advice of Deloitte & Touche. However, the SEC has recently stated that a
similarly situated company will be permitted to account for such an assessment
as a one-time charge. CalEnergy has determined (with Deloitte & Touche's
concurrence) to avail itself of such accounting treatment, which will allow
CalEnergy to reduce the future goodwill amortization associated with the
acquisition. Accordingly, CalEnergy's balance sheet goodwill will be reduced
by approximately $132 million, thereby benefiting future year earnings.
"Now that the British Labour government has quantified this one-time
tax, it allows us to account for it so as to eliminate its effects from our
future earnings," stated David L. Sokol, Chairman and Chief Executive Officer.
"In hindsight it was wise of our team to anticipate this proposed tax and to
include its full anticipated impact in our bid for Northern Electric. Now
that this one-time tax has been quantified, it confirms the prudence of our
Northern Electric acquisition and its future benefits to CalEnergy."
CalEnergy, which manages and owns interests in over 5,000 net MW of
power generation facilities in operation, construction and development
worldwide, currently operates 19 generating facilities and also supplies and
distributes electricity to 1.5 million customers.