SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
Date of Report (Date of earliest event reported)
February 7, 1996
NORAM ENERGY CORP.
(Exact name of Registrant as specified in its charter)
Delaware 1-3751 72-0120530
(State or other (Commission (IRS Employer
jurisdiction File Number) Identification No.)
of incorporation)
NorAm Energy Corp.
1600 Smith
Houston, Texas 77002
(Address of principal executive offices) (Zip Code)
(713) 654-5699
(Registrant's telephone number, including area code)
Page 1 of 3 Pages<PAGE>
Item 5. Other Events
NorAm Energy Corp. hereby incorporates by reference
herein the following press release:
Press Release issued on February 7, 1996 and attached
hereto as Exhibit 99.
Item 7. Financial Statement, Pro Forma Financial Information
and Exhibits
(a) Financial Statements -- None.
(b) Pro Forma Financial Information -- None.
(c) Exhibits -- EX-99.
Page 2 of 3 Pages<PAGE>
Signature
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this report on
Form 8-K to be signed on its behalf by the undersigned
hereunto duly authorized.
NORAM ENERGY CORP.
By: /s/ Jack W. Ellis
Name: Jack W. Ellis
Title: Vice President &
Controller
Date: February 7, 1996
Page 3 of 3 Pages<PAGE>
EXHIBIT 99
For more information, contact
Randy Burkhalter, NorAm Energy Corp.
(713) 654-7502
NorAm Energy Reports 43% Increase in Earnings For 1995
Houston, TX -- February 7, 1996 -- NorAm Energy Corp. today
reported net income, after preferred dividends, of $57.7 million
for 1995, up 43% from $40.3 million in 1994. Earnings per share
were $0.47 on an average of 123.9 million shares outstanding,
compared to $0.33 on an average of 122.4 million shares
outstanding last year.
Fourth quarter net income, after preferred dividends, was
$33.0 million, or $0.26 per share, compared to $19.2 million, or
$0.16 per share for the same period last year. Results for fourth
quarter 1994 included an expense of $2.1 million or $0.02 per
share, related to the settlement of litigation brought against
the company by the Resolution Trust Corporation.
"During 1995, we made a lot of progress toward developing
and implementing our strategic plan and were able to achieve a
significant earnings increase and debt reduction for the third
consecutive year. We also strengthened our core businesses and
developed new profit opportunities. Our progress over the last<PAGE>
2
several years was reflected in our stock price, which increased
65% during the year," said Milt Honea, Chairman, President and
Chief Executive Officer.
For the entire year, weather was 4% colder than 1994 but 2%
warmer than normal. For the fourth quarter, weather was 29%
colder than last year and 6% colder than normal.
Operating income from the Distribution segment was $178.0
million for 1995 compared to $162.1 million last year. The
increase was due primarily to higher revenues from rate relief in
several jurisdictions and increased industrial sales, as well as
colder weather.
Distribution operating income for the fourth quarter
increased 33% to $76.0 million compared to $57.1 million in 1994.
The colder weather accounted for approximately $14.5 million of
the increase in income over last year. Increased rates from Arkla
and Minnegasco also contributed to the positive variance.
Distribution throughput for the year increased 10% to 576.2
billion cubic feet (Bcf) from 524.2 Bcf last year, due in large
part to increased industrial sales.
The Trading and Transportation Group, which includes the
company's two interstate pipelines, gathering and wholesale gas
and electric marketing, reported operating income of $116.6
million for 1995 compared to $108.1 million last year. <PAGE>
3
Gas marketing sales volumes were up 61% to 512.8 million
MMBtu in 1995 compared to 317.9 million MMBtu in 1994.
Fourth quarter operating income for the Trading and
Transportation Group was up 32% to $35.6 million from $27.0
million last year. Higher pipeline transportation volumes and
margins, primarily from NGT, more than offset the non-recurrence
of a $7.0 million benefit resulting from the final approval of
two rate cases in 1994.
"We are pleased with the significant achievements made by
all of our business units. In Distribution, we obtained rate
relief in several of our service territories, including weather
normalization in Arkansas and final approval of a 1993 rate case
in Minnesota. Our Trading and Transportation Group completed a
settlement of the NGT rate case, which will yield rates more
closely aligned with services offered. In addition to the 61%
increase in sales volumes, NorAm Energy Services made inroads
into the southeastern United States with the opening of a
regional office in Miami, Florida. Our NorAm Field Services Group
gathered 233 Bcf of natural gas in spite of price sensitive gas
quantities shut in by producers early in the year of
approximately 24 Bcf of mid-continent gas," stated Honea.
"NorAm is also well prepared to take advantage of
opportunities from the eventual unbundling of gas and electric
services at the residential and commercial level. Marketing at <PAGE>
4
the retail level is an area of increasing emphasis in our
strategic plan and we are working hard to position the company to
provide new, unregulated services to our customers," continued
Honea.
Interest expense has declined each quarter this year and
totaled $157.9 million for 1995 compared to $169.4 million for
1994. The company's strong cash flows and finance initiatives
enabled it to retire $85.3 million of debt in 1995 and reduce its
embedded cost of debt to 8.8% from 9.2% last year. Interest
expense for the fourth quarter of 1995 was $39.7 million compared
to $42.4 million for the same period in 1994.
"Financial flexibility is a high priority. We were able to
refinance some debt this year and significantly reduce interest
expense. We expect to do the same in 1996 and 1997 given the
current interest rate environment. We are also very confident of
our ability not only to continue to reduce debt, but also to
invest in the future of the company," said Honea.
NorAm Energy Corp. (NYSE: NAE), is the nation's third
largest natural gas utility serving nearly 3 million customers
through its Entex, Arkla and Minnegasco distribution divisions.
NorAm Energy is also a major natural gas pipeline and energy
marketer providing supply, gathering, storage, transportation and
wholesale electric services through NorAm Trading and
Transportation Group. This group includes NorAm Gas Transmission,<PAGE>
5
Mississippi River Transmission, NorAm Field Services and NorAm
Energy Services. NorAm Energy Management is the company's retail
energy supplier, providing total energy portfolios to industrial
and large commercial customers.
(###)<PAGE>
NORAM ENERGY CORP. AND SUBSIDIARIES
(Unaudited)
(millions of dollars except per share amounts)
Fourth Quarter Year-to-Date
1995 1994 1995 1994
OPERATING INCOME (LOSS) BY BUSINESS UNIT
Distribution $ 76.0 $ 57.1 $ 178.0 $ 162.1
Trading & Transportation 35.6 27.0 116.6 108.1
Other (2.4) - (7.3) (5.3)
Total Operating Income 109.2 84.1 287.3 264.9
Interest Expense, Net 39.7 42.4 157.9 169.4
Other Expense 2.7 3.9 8.4 9.8
Income From Continuing Operations Before 66.8 37.8 121.0 85.7
Income Taxes
Provision for Income Taxes 31.9 14.0 55.4 34.4
Income From Continuing Operations 34.9 23.8 65.6 51.3
Discontinued Operations, Less Taxes (1) - (2.1) - (2.1)
Extraordinary Item, Less Taxes (2) - (0.6) (0.1) (1.1)
Net Income 34.9 21.1 65.5 48.1
Preferred Dividend Requirement 1.9 1.9 7.8 7.8
Balance Available to Common Stock $ 33.0 $ 19.2 $ 57.7 $ 40.3
Per Share Data:
Continuing Operations $ 0.26 $ 0.18 $ 0.47 $ 0.36
Discontinued Operations, Less Taxes - (0.02) - (0.02)
Extraordinary Item, Less Taxes - 0.00 0.00 (0.01)
Earnings Per Common Share $ 0.26 $ 0.16 $ 0.47 $ 0.33
Average Common Shares
Outstanding (in thousands) 124,654 122,492 123,868 122,424
(1) Principally settlement of litigation related to University Savings
Association brought against the Company by the Resolution Trust
Corporation.
(2) Loss on reacquisition of debt.
Schedule of Debt: December 31 December 31
1995 1994
Short-Term (including current maturities) $ 128.8 $ 274.6
Long-Term 1,474.9 1,414.4
Total $ 1,603.7 $ 1,689.0
<PAGE>
NORAM ENERGY CORP. AND SUBSIDIARIES
Operating Statistics
NATURAL GAS THROUGHPUT Fourth Quarter Year-to-Date
1995 1994 1995 1994
(million MMBtu)
TRADING & TRANSPORTATION
NGT
Sales 12.5 6.9 46.9 40.7
Transportation 170.7 135.1 628.1 567.3
Less: Elimination (12.0) (6.2) (44.9) (37.4)
Total Throughput 171.2 135.8 630.1 570.6
MRT
Sales 9.9 8.1 35.7 25.6
Transportation 111.3 73.1 395.1 307.2
Less: Elimination (9.9) (8.1) (35.7) (25.6)
Total Throughput 111.3 73.1 395.1 307.2
NES
Sales 159.9 81.9 512.8 317.9
Transportation - - - -
Total Throughput 159.9 81.9 512.8 317.9
TRADING & TRANSPORTATION
GROUP CONSOLIDATED
Sales 141.9 65.3 441.9 228.1
Transportation 268.0 198.4 974.3 831.8
Less: Elimination (21.9) (14.3) (80.6) (63.0)
Total Throughput 388.0 249.4 1,335.6 996.9
DISTRIBUTION (BCF)
ARKLA
Sales 27.6 23.7 84.1 84.4
Transportation 8.3 7.5 30.7 31.8
Total Throughput 35.9 31.2 114.8 116.2
ENTEX
Sales 79.0 64.2 288.8 242.1
Transportation 7.6 8.8 28.2 31.5
Total Throughput 86.6 73.0 317.0 273.6
MINNEGASCO
Sales 45.9 37.4 132.5 129.0
Transportation 3.7 3.0 11.9 5.4
Total Throughput 49.6 40.4 144.4 134.4
DISTRIBUTION GROUP CONSOLIDATED
Sales 152.5 125.3 505.4 455.5
Transportation 19.6 19.3 70.8 68.7
Total Throughput 172.1 144.6 576.2 524.2
<PAGE>
CONTACT INVESTOR RELATIONS
Randy Burkhalter (713) 654-7502
NORAM ENERGY CORP. AND SUBSIDIARIES
(Unaudited)
(thousands of dollars except per share amounts)
QUARTER ENDED DECEMBER 31 1995 1994
Operating Revenues $968,078 $734,261 (1)
Income From Continuing Operations Before $ 66,748 $ 37,758
Income Taxes
Income From Continuing Operations $ 34,889 $ 23,836
Loss From Discontinued Operations, - (2,102)
Less Taxes (2)
Income Before Extraordinary Item 34,889 21,734
Extraordinary Item, Less Taxes (3) - (606)
Net Income 34,889 21,128
Preferred Dividend Requirement 1,950 1,950
Balance Available to Common Stock $ 32,939 $ 19,178
Per Share Data:
Income From Continuing Operations $ 0.26 $ 0.18
Loss From Discontinued Operations, - (0.02)
Less Taxes
Extraordinary Item, Less Taxes - 0.00
Net Income $ 0.26 $ 0.16
Weighted Average Common Shares Outstanding 124,654 122,492
(000's)
TWELVE MONTHS ENDED DECEMBER 31
Operating Revenues $2,964,679 $2,857,902 (1)
Income From Continuing Operations Before $ 120,908 $ 85,663
Income Taxes
Income From Continuing Operations $ 65,529 $ 51,291
Loss From Discontinued Operations, - (2,102)
Less Taxes (2)
Income Before Extraordinary Item 65,529 49,189
Extraordinary Item, Less Taxes (3) (52) (1,123)
Net Income 65,477 48,066
Preferred Dividend Requirement 7,800 7,800
Balance Available to Common Stock $ 57,677 $ 40,266
Per Share Data:
Income From Continuing Operations $ 0.47 $ 0.36
Loss From Discontinued Operations, - (0.02)
Less Taxes
Extraordinary Item, Less Taxes 0.00 (0.01)
Net Income $ 0.47 $ 0.33
Weighted Average Common Shares Outstanding 123,868 122,424
(000's)
(1) Operating revenues for 1994 have been restated to include certain
nonregulated revenues which previously were presented net of related
expenses and reported below the operating income line.
(2) Principally settlement of litigation related to University Savings
Association brought against the Company by the Resolution Trust
Corporation.
(3) Loss on reacquisition of debt.
