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) JULY 26, 1996
NGC CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-11156 75-2386657
(STATE OR OTHER JURISDICTION (COMMISSION (I.R.S. EMPLOYER
OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO.)
13430 NORTHWEST FREEWAY
HOUSTON, TEXAS 77040
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (713) 507-6400
PAGE 1 OF 11
EXHIBIT INDEX - PAGE 4
ITEM 5. OTHER EVENTS
On July 26, 1996, NGC Corporation ("NGC") issued a press release
announcing its 1996 second quarter results. A copy of NGC's press
release is annexed hereto as Exhibit 1 and incorporated herein by
reference.
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SIGNATURES
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.
NGC CORPORATION
(Registrant)
Date: July 31, 1996 /s/ KENNETH E. RANDOLPH
Kenneth E. Randolph
Senior Vice President and
General Counsel
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EXHIBIT INDEX
NO. PAGE
- --- ----
99 Press Release, dated July 26, 1996. 5
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Exhibit 99
NR96-21
NEWS RELEASE
MEDIA CONTACT: Katherine K. Putnam
713/507-3936
ANALYST CONTACT: R. Dean Ayers
713/507-6852
NGC SECOND QUARTER NET INCOME AND EPS TRIPLE
HOUSTON (July 26, 1996) -- NGC Corporation reported net income for the
second quarter of $13.8 million, or $0.12 per share, compared with $4.9 million,
or $0.04 per share, for the second quarter of 1995. Last year's results include
an after-tax charge of $1.1 million, or $0.01 per share, related to damage to a
gas processing plant. Excluding the charge, NGC recorded $6.0 million, or $0.05
per share, in net income in last year's second quarter.
Net income for the first six months was $44.2 million, or $0.37 per
share, almost triple the $15.5 million, or $0.14 per share, for the first six
months of 1995. Last year's results exclude a $45.7 million deferred tax benefit
recorded in the first quarter, related to the acquisition of Trident NGL, Inc.,
and the $1.1 million charge mentioned above recorded in the second quarter.
Including the benefit and charge, reported net income for the first half was
$60.1 million, or $0.54 per share, last year.
NGC Chairman and CEO Chuck Watson said, "Both the gas/electric and
liquids segments performed well in the second quarter and benefited from higher
gas marketing sales margins and improved results in natural gas liquids and
crude oil. Overall, we delivered substantially improved results this quarter,
and net income for the first half is well ahead of reported results for last
year's first half."
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Commenting on NGC's pending merger with Chevron's midstream businesses,
Watson said, "NGC's merger with the natural gas and gas liquids marketing
businesses of Chevron is on target, and we continue to seek Federal Trade
Commission and Securities and Exchange Commission approvals, which we expect to
have in time to close in September."
NGC's second-quarter consolidated operating margin totaled $52.0
million, compared with $43.4 million for the 1995 second quarter. The
improvement reflects better unit margins in the gas marketing segment as well as
higher crude oil and natural gas liquids (NGL) sales volumes and margins.
Operating margin for the first half of 1996 was $142.1 million, almost
double the $74.9 million reported for the same period in 1995. The improved
results are primarily attributable to the acquisition of Trident, improved
results in the NGL and crude oil marketing business and higher unit margins in
the gas marketing segment.
At the business segments, the gas and electric marketing businesses
reported a second-quarter operating margin of $8.3 million, virtually double the
$4.3 million reported for the second quarter last year, due to higher gas
margins. Total natural gas volumes sold in the United States, Canada and the
United Kingdom increased to 6.0 billion cubic feet per day (Bcf/d) from 5.3
Bcf/d for last year's second quarter.
U.S. gas sales volumes were virtually flat from quarter to quarter,
averaging 3.1 Bcf/d compared with 3.2 Bcf/d last year. Gas marketing sales
margins in the second quarter, which reflected the decreased demand typical for
the spring months, doubled those of last year's second quarter. Last year's
second-quarter gas sales margins, however, were unusually low as a result of
reduced market volatility and lower demand.
Electric Clearinghouse, Inc. (ECI), NGC's power marketer, sold 2.1
million megawatt hours during the quarter compared with 0.7 megawatt hours for
the same quarter of 1995. Growth continues in that business with peak-day sales
in July exceeding 2,500 megawatts per hour.
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The liquids segment recorded a 12 percent increase this quarter with an
operating margin of $43.7 million, compared with $39.1 million for the second
quarter of 1995. Key factors behind the improvement are increased sales volumes
and margins in the NGL and crude oil marketing businesses, which is a result of
growth in those businesses as well as volumes added through acquisitions. The
improvement was somewhat offset by slightly lower results in gas processing and
fractionation.
The lower results reported in the gas processing segment reflect a
strong improvement from quarter to quarter at the field plants that was offset
by a decrease at the straddle plants. Higher product prices pushed field plant
processing margins up, while unfavorable economics reduced volumes at the
straddle plants. However, the overall gas processing business does show a slight
increase in this second quarter when hedging activities, which are actually
reported in the NGL marketing business, are taken into account.
Liquids volumes increased 23 percent this quarter to 148.3 thousand
barrels per day (Bbls/d) from 120.4 thousand Bbls/d in the second quarter last
year. Crude oil volumes increased dramatically, more than doubling from 43.3
thousand Bbls/d to 103.5 thousand Bbls/d.
Consolidated operating income for the second quarter was $18.7 million,
compared with last year's $13.1 million, a 43 percent increase which reflects
the higher operating margin that was offset by slightly higher general and
administrative costs and depreciation related to recent acquisitions.
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In the international gas business, NGC's U.K. affiliate, Accord Energy
Limited, and Novagas Clearinghouse Ltd. (NCL), NGC's Canadian affiliate,
contributed $7.2 million in the second quarter, compared with $3.9 million in
the second quarter a year ago. Combined, the companies averaged 3.3 Bcf/d of gas
sales during the quarter, compared with 2.1 Bcf/d during the second quarter of
1995. NCL and Accord were formed in 1994, and NGC owns an approximate 50 percent
interest in and manages each affiliate.
NGC Corporation (NYSE:NGL) is a leading gatherer, processor,
transporter and marketer of energy products and services in North America and
the United Kingdom. Through its "Energy Store," NGC offers a multi-commodity
energy-product-and-services resource that provides natural gas, natural gas
liquids, electricity and crude oil.
###
<PAGE>
NGC CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXPECT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
-------------------------------------- -- ------------------------------------
1996 1995 1996 1995
----------------- -- ----------------- -- ---------------- -- -----------------
<S> <C> <C> <C> <C>
Operating Revenues $ 1,163,151 $ 841,028 $ 2,810,274 $ 1,643,972
Cost of Sales 1,111,156 797,629 2,668,197 1,569,087
----------------- ----------------- ---------------- -----------------
OPERATING MARGIN 51,995 43,399 142,077 74,885
Depreciation 14,935 12,951 29,105 18,577
General and Administrative Expenses 18,337 17,384 40,613 31,855
----------------- ----------------- ---------------- -----------------
OPERATING INCOME 18,723 13,064 72,359 24,453
Interest Expense (9,125) (9,035) (19,778) (12,767)
Equity in Earnings of Unconsolidated
Affiliates 8,148 4,305 12,658 9,163
Other Income and (Deductions), Net (522) (422) (1,394) (1,190)
----------------- ----------------- ---------------- -----------------
INCOME BEFORE INCOME TAXES 17,224 7,912 63,845 19,659
Provision for Income Taxes 3,386 1,902 19,679 4,1112
----------------- ----------------- ---------------- -----------------
NET INCOME $ 13,838 $ 6,0101 $ 44,166 $ 15,5481,2
================= ================= ================ =================
Earnings Per Share of Common Stock and
Common Stock Equivalents Outstanding $0.12 $0.051 $0.37 $0.141,2
================= ================= ================ =================
Average Shares of Common Stock and
Equivalents Outstanding 120,050 117,477 119,355 111,158
================= ================= ================ =================
</TABLE>
1. Excludes a $1.1 million, or $.0.01 charge related to damage to a gas
processing plant.
2. Excludes a deferred tax benefit of $45.7 million or $0.41 per share,
recognized as a result of a merger with Trident NGL, Inc.
<PAGE>
NGC CORPORATION
UNAUDITED OPERATING MARGIN BY SEGMENT
(IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
------------------------------------- -- --------------------------------------
1996 1995 1996 1995
----------------- -- ---------------- --- ---------------- --- -----------------
<S> <C> <C> <C> <C>
Natural Gas and
Electric Power Marketing $ 8,306 $ 4,337 $ 54,422 $ 19,490
----------------- ---------------- ---------------- -----------------
Natural Gas Liquids, Crude Oil and
Gas Transmission Segment:
Natural Gas Processing 22,966 24,442 44,933 33,878
Fractionation 3,787 4,506 5,859 6,567
Natural Gas Liquids and
Crude Oil Marketing 12,271 5,125 26,709 7,799
Natural Gas Gathering and
Transmission and Other 4,665 4,989 10,154 7,151
----------------- ---------------- ---------------- -----------------
43,689 39,062 87,655 55,395
----------------- ---------------- ---------------- -----------------
TOTAL OPERATING MARGIN $ 51,995 $ 43,399 $ 142,077 $ 74,885
================= ================ ================ =================
</TABLE>
<PAGE>
NGC CORPORATION
VOLUMETRIC INFORMATION
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
------------------------------------- -- -------------------------------------
1996 1995 1996 1995
----------------- -- ---------------- --- ---------------- -- -----------------
<S> <C> <C> <C> <C>
Natural Gas Sales (Bcf/d):
U.S.1 3.1 3.2 3.5 3.4
Canada2 2.9 1.8 2.9 1.5
U.K.3 .4 .3 .6 .3
================= ================ ================ =================
Total Daily Gas Sales 6.0 5.3 7.0 5.2
================= ================ ================ =================
Electric Power Marketing:
Megawatts per hour 975 297 1,043 206
Natural Gas Liquids Processed:
Thousand Bbls/d
Gross 78.1 87.3 70.5 65.3
Net 61.4 68.9 54.8 50.3
Natural Gas Liquids Sold:
Thousand Bbls/d 148.3 120.4 153.1 94.0
Fractionation Volumes:
Thousand Bbls/d 116.5 113.7 110.6 78.0
Crude Oil Volumes:
Thousand Bbls/d 103.5 43.3 102.8 44.9
</TABLE>
1. Includes 0.01 Bcf/d in inter-company gas sales for the 1996 and 1995
quarters, respectively.
2. Represents volumes marketed through NGC's Canadian affiliate, NCL.
3. Represents volumes marketed through NGC's U.K. affiliate, Accord.
