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 January 29, 1998
(Date of earliest event reported)
CalEnergy Company, Inc.
(Exact name of registrant as specified in its charter)
Delaware 1-9874 94-2213782
(State of other (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
On January 29, 1998, the Registrant announced its
revenues and earnings for the fourth quarter and year ended
1997, which earnings included a one-time charge for an asset
valuation impairment under Financial Accounting Standard No.
121 "Accounting for the Impairment of Long-Lived Assets"
relating to the Registrant's assets in Indonesia. A copy of
the press release issued by the Registrant is attached hereto
as Exhibit 1 and is incorporated herein by reference.
Item 7. Financial Statements and Exhibits
Exhibit 1 - Press Release dated January 29, 1998
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: January 29, 1998
Exhibit 1
FOR IMMEDIATE RELEASE
Craig M. Hammett - Senior Vice President, Chief Financial Officer 402-341-4500
Craig S. Allen - Manager, Investor Relations 402-341-4500
CalEnergy Reports a 229% Increase in Revenues
and a 61% Increase in Earnings During 4th Quarter 19971
(excluding one-time charge)
OMAHA, NEBRASKA, January 29, 1998 - CalEnergy Company,
Inc. ("CalEnergy" or "the Company") (NYSE, PCX and LSE
symbol: CE) today reported that total revenues increased 229%
to $628.0 million for the quarter ended December 31, 1997
from $191.0 million for the same period in 1996. Net income
available to common shareholders increased 61% to $34.1
million for the quarter ended December 31, 1997, or $0.43 per
basic common share, compared to $21.2 million, or $0.34 per
basic common share for the same period in 1996, excluding the
effects of an $87 million one-time, fourth quarter charge
regarding the Company's Indonesian projects. Including this
charge, the net loss was $52.9 million for the quarter ended
December 31, 1997, or $0.67 per basic common share.
For the year ended December 31, 1997, revenues increased
294% to $2.3 billion from $576.2 million for the same period
in 1996. Excluding the extraordinary and non-recurring items,
net income available to common shareholders for the year
ended December 31, 1997 increased 50% to $138.8 million, or
$2.06 per basic common share, compared to $92.5 million, or
$1.69 per basic common share for the same period in 1996.
Including the one-time Indonesian charge in the fourth
quarter, the full year 1997 net income before extraordinary
item was $51.8 million or $0.77 per basic common share. In
addition, the year ended December 31, 1997 earnings results
included an extraordinary item in the amount of $135.9
million, or $2.02 per basic common share. The extraordinary
item reflects the so-called "windfall tax" on Northern
Electric ("Northern"), acquired on December 24, 1996,
assessed by the Labour Government in the United Kingdom.
The one-time charge of $87 million for the fourth
quarter of 1997 represents an asset valuation impairment
under Financial Accounting Standard No. 121 "Accounting for
the Impairment of Long-Lived Assets" relating to CalEnergy's
assets in Indonesia. The charge includes all reasonably
estimated asset valuation impairments associated with the
Company's assets in Indonesia and gives effect to the
political risk insurance on such investment. The estimate
assumes there will be no tax benefits associated with the
asset valuation impairment.
-More-
While the situation in Indonesia is very complex and
difficult to predict, the Company intends to continue to take
all actions to require the Government of Indonesia to honor
its contractual obligations. Notwithstanding this intention,
however, CalEnergy believes that the aforementioned asset
valuation impairment is appropriate given the circumstances.
Further, CalEnergy cautions investors to note that 1998
earnings could be reduced by as much as $0.40 per share if
Indonesia were to subsequently take action to abrogate the
Dieng, Patuha and Bali contracts or otherwise expropriate
CalEnergy's entire investment in Indonesia. If lesser actions
than such full contract abrogation were to occur or continued
uncertainty were to persist, there would be a lesser impact
on 1998 earnings. Such reduction in 1998 earnings would
result primarily from the loss of earnings from Dieng Unit 1,
which is nearing completion, and previously anticipated
capitalization of interest on units under development.
CalEnergy is not predicting such an abrogation by the
Indonesian Government; however, the Company wants investors
to be informed of the full extent of potential consequences
of such events, if such events were to occur.
Chairman and Chief Executive Officer David Sokol said,
"While we are troubled by events in Indonesia, we are pleased
with the continued strong operating results of our various
operations elsewhere around the world. Our Northern Electric
subsidiary has performed particularly well in its historic
business and the addition of over 320,000 new gas customer
applications as of January 26, 1998 in the United Kingdom
reflects an increase in Northern's combined gas and electric
customer base by over 20% since the end of 1996. We believe
that Northern's highly advanced information systems
technology positions it to take advantage of the rapidly
deregulating United Kingdom market for gas and electric
supply. We also look forward to applying this technology to
future deregulated markets for gas and electricity in the
U.S. and around the world."
Mr. Sokol added, "The recent economic and currency
problems in Indonesia, coupled with the general currency
problems throughout Asia, have created significant challenges
for our Indonesian development portfolio. We are actively
engaged in pursuing resolution of the status of our
Indonesian projects and protecting the shareholders' economic
interests. CalEnergy's total assets are in excess of $7
billion and our Indonesian investments are less than 5% of
our total assets."
-More-
This press release contains forward-looking statements
made pursuant to the Private Securities Litigation Reform Act
of 1995 ("Reform Act"). Such statements are based on current
expectations and involve a number of known and unknown risks
and uncertainties that could cause the actual results and
performance of the Company to differ materially from any
expected future results or performance, expressed or implied,
by the forward-looking statements. In connection with the
safe harbor provisions of the Reform Act, the Company has
identified important factors that could cause actual results
to differ materially from such expectations, including
development uncertainty, operating uncertainty, uncertainties
relating to doing business outside of the United States,
uncertainties relating to geothermal resources, uncertainties
relating to domestic and international (and in particular,
Indonesian) economic conditions and uncertainties regarding
the impact of regulations, changes in government policy,
industry deregulation and competition. Reference is made to
all of the Company's SEC filings, including the Company's
Report on Form 8-K dated February 25, 1997, incorporated
herein by reference, for a description of such factors. The
Company assumes no responsibility to update forward-looking
information contained herein.
CalEnergy, which manages and owns interests in over
5,000 net MW of power generation facilities in operation,
construction and development worldwide, currently operates 20
generating facilities and also supplies and distributes
electricity and gas to over 1.5 million customers.
-More-
CalEnergy Company, Inc.
Consolidated Operating Results
(in thousands except per share amounts)
Three Months Ended
December 31
1997 1996
--unaudited--
Revenues $ 628,048 $ 190,997
Income (Loss) Before Provision for
Income Taxes and Minority Interest $ (12,066)(1)$ 32,188
Minority Interest(2) $ 16,332 $ 3,055
Net Income (Loss) Available for Common
Shareholders $ (52,922) $ 21,174
Net Income (Loss) Per Basic Common Share(3) $ (0.67) $ 0.34
Basic Shares Outstanding(3) 78,649 62,974
Twelve Months Ended
December 31
1997 1996
Revenues $ 2,270,911 $ 576,195
Income Before Provision for Income Taxes,
Minority Interest and Extraordinary Item $ 196,860(1)$ 140,404
Minority Interest(2) $ 45,993 $ 6,122
Net Income Before Extraordinary Item $ 51,823 $ 92,461
Extraordinary Item, Net of Minority Interest $ (135,850)(4)$ -
Net Income (Loss) Available for Common
Shareholders $ (84,027) $ 92,461
Net Income Per Basic Common Share
Before Extraordinary Item(3) $ 0.77 $ 1.69
Extraordinary Item, Net of Minority Interest
Per Basic Common Share $ (2.02)(4)$ -
Net Income (Loss) Per Basic Common Share(3) $ (1.25) $ 1.69
Basic Shares Outstanding(3) 67,268 54,739
(1) Includes the effect of a non-recurring charge. The non-
recurring charge of $87 million for the fourth quarter of
1997 represents an asset valuation impairment under
Financial Accounting Standard No. 121 "Accounting for the
Impairment of Long-Lived Assets" relating to the Company's
assets in Indonesia. Such charge includes all reasonably
estimated impairments associated with events in Indonesia
and gives effect to the political risk insurance on such
investment. The estimate assumes there will be no tax
benefits associated with the asset valuation impairment.
(2) Reflects minority interest in Northern Electric and
the dividends on convertible preferred securities of
subsidiary trusts.
(3) The Company has adopted Statement of Financial
Accounting Standard No. 128, "Earnings per Share" which
replaces primary earnings per share with basic earnings per
share. Under the previous accounting standard primary
earnings (loss) per share for the three months ended
December 31, 1997 and 1996 would have been ($0.66) and
$0.33, respectively. For the year ending December 31, 1997
and 1996, primary earnings per share before extraordinary
item would have been $0.75 and $1.60, respectively.
(4) Reflects the "windfall tax" on Northern Electric
assessed by the Labour Government in the United Kingdom.
www.calenergy.com
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