EARNINGS / IPL Energy Achieves Record 1997 Earnings
TSE, ME SYMBOL: IPL
NASDAQ SYMBOL: IPPIF
JANUARY 27, 1998
CALGARY, ALBERTA--(January 27, 1998) - IPL Energy Inc. today
announced record earnings of $217 million, or $3.15 per common
share, for the year ended December 31, 1997, a 21 percent increase
over the $180 million, or $2.90 per common share, earned in 1996.
Brian F. MacNeill, President and Chief Executive Officer, said
that 1997 was an exceptional year in terms of profitability,
growth and stock market performance. "The results reflect the
early benefits that are beginning to flow from the implementation
of the new strategy to position the company at the forefront of
providing energy delivery and services in a changing North
American energy market."
Both core business units, Energy Transportation and Energy
Distribution, contributed to the higher 1997 earnings.
The contribution from the Energy Transportation unit increased 26
percent to $122 million as the liquids pipeline business continued
to enjoy unprecedented demand for increased transportation
capacity due to higher Western Canadian crude oil production.
Deliveries for the year averaged a record 2.1 million barrels per
day, a 6 percent increase over 1996. The unit also benefitted from
the Cusiana crude oil pipeline project in Colombia which is
substantially completed.
The contribution from the Energy Distribution unit advanced 11
percent to $124 million. The addition of 55,000 new natural gas
customers by The Consumers' Gas Company Ltd., reflecting a
stronger Ontario economy, was more than sufficient to offset the
weather which was 5 percent warmer than in 1996. In addition, the
unit benefitted from the full year impact of the acquisition of
the 15 percent remaining minority interest in Consumers Gas in
December 1996. The results of the unit also reflect the
contribution from the investment in Noverco Inc. in late 1997, as
well as expenditures incurred to date in energy services
initiatives.
Net costs of the Corporate segment, which include financing and
other investing activities, remained essentially unchanged at $29
million.
The increase in earnings in 1997 enabled the company to raise the
quarterly dividend by 6 percent to an annualized rate of $2.18 per
share, starting with the dividend paid September 1, 1997. The
increase is the second in as many years. As reported on January
26, 1998, the Board of Directors declared a quarterly dividend of
$0.545 per common share payable March 1, 1998, to shareholders of
record February 13, 1998.
The progress achieved in 1997 was also reflected in the total
return to shareholders from dividends and share price
appreciation, Mr. MacNeill said. For the year ended December 31,
1997, the total return to an IPL Energy shareholder from an
investment made at the beginning of 1997 reached 71 percent. This
compares with a total return of 37 percent from a composite
investment in the Canadian companies whose business activities and
risk levels are most comparable to IPL Energy, and with a 15
percent return by The Toronto Stock Exchange 300 Composite Index.
Full financial and operating highlights for 1997 are contained in
the annual report to be mailed to shareholders in advance of the
April 30, 1998, annual meeting to be held at 1:30 p.m. in the
Hotel Macdonald, Edmonton, Alberta, Canada.
IPL Energy Inc. is a leader in energy delivery and services,
operating the world's longest crude oil and liquids pipeline
system, and Canada's largest natural gas distribution company
through The Consumers' Gas Company Ltd. which serves 1.4 million
residential, commercial and industrial customers in south central
and eastern Ontario, Quebec and Upper New York State. IPL
Energy's common shares trade on the Toronto and Montreal stock
exchanges in Canada under the symbol "IPL". In the United States
the shares trade on the NASDAQ under "IPPIF".
/T/
IPL Energy Inc.
Highlights(1,2)
(Canadian dollars in millions, except per share amounts)
Three months ended Year ended
December 31, December 31,
1997 1996 1997 1996
---- ---- ---- ----
(unaudited) (audited)
FINANCIAL HIGHLIGHTS
Earnings
Energy Transportation 31.2 27.9 122.5 97.4
Energy Distribution(1) (34.8) (22.6) 124.2 111.8
Corporate (1.6) (8.8) (29.4) (28.9)
--------------------------------------------------------------
Consolidated Earnings (5.2) (3.5) 217.3 180.3
--------------------------------------------------------------
Operating Revenue
Energy Transportation 131.8 133.7 518.1 508.7
Energy Distribution 214.2 193.7 2,001.9 1,949.2
--------------------------------------------------------------
Consolidated Operating
Revenue 346.0 327.4 2,520.0 2,457.9
--------------------------------------------------------------
Cash Provided from
Operating Activities 300.1 252.8 432.0 538.0
Capital Expenditures 245.9 189.1 651.4 560.5
Dividends 40.4 33.3 147.1 125.9
Per Share Amounts(3)
Earnings (0.13) (0.10) 3.15 2.90
Cash Provided from
Operating Activities 4.32 3.99 6.27 8.65
Dividends 0.545 0.515 2.12 2.03
OPERATING HIGHLIGHTS
Energy Transportation(4)
Deliveries (mbpd) 2,259 2,298 2,083 1,970
Barrel miles (billions) 203 204 771 768
Average haul (miles) 977 965 1,014 1,069
Energy Distribution
Gas distribution volumes
(bcf) 46 46 428 429
Number of active
customers 1,362 1,307 1,362 1,307
Degree day deficiency(5)
Actual 115 81 4,011 4,209
Forecast based on
normal weather 125 129 4,003 4,058
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Notes
(1) The highlights of Energy Distribution activities reflect the
results of The Consumers' Gas Company Ltd. and other gas
distribution assets on a quarter lag basis of consolidation for
the three months ended and years ended September 30. Due to the
seasonal nature of gas distribution operations, the amount shown
for the three month period is not indicative of full year results
as this is traditionally a loss quarter.
(2) Certain comparative amounts have been reclassified to conform
to the current year's basis of presentation.
(3) Weighted average number of shares outstanding for 1997 were
68.9 million (1996 - 62.2 million).
(4) Pipeline operating highlights include the statistics of the
16.6 percent owned portion of the mainline system located in the
United States.
(5) Degree day deficiency is a measure of coldness. It is
calculated by accumulating for each day in the fiscal period the
total number of degrees by which the daily mean temperature fell
below 18 degrees Celsius. The figures given are those accumulated
in the Toronto area.
/T/
IPL ENERGY INC.
CONSOLIDATED STATEMENT OF EARNINGS
(audited; Canadian dollars in millions,
except per share amounts)
--------------------------------------------------------------
Year ended December 31, 1997 1996 1995
--------------------------------------------------------------
Operating Revenue 2,520.0 2,457.9 2,322.8
--------------------------------------------------------------
Expenses
Gas costs 1,036.4 1,064.3 1,123.0
Operating and administrative 638.4 576.3 515.8
Depreciation 274.0 237.0 221.5
--------------------------------------------------------------
1,948.8 1,877.6 1,860.3
--------------------------------------------------------------
Operating Income 571.2 580.3 462.5
Investment and Other Income 76.5 31.7 39.1
Interest Expense (276.1) (271.3) (281.8)
--------------------------------------------------------------
Earnings Before Undernoted 371.6 340.7 219.8
Income Taxes (154.3) (138.3) (74.4)
--------------------------------------------------------------
217.3 202.4 145.4
Minority Interest - (22.1) (15.0)
--------------------------------------------------------------
Earnings 217.3 180.3 130.4
--------------------------------------------------------------
Earnings Per Share 3.15 2.90 2.30
--------------------------------------------------------------
--------------------------------------------------------------
CONSOLIDATED STATEMENT OF RETAINED EARNINGS
(audited; Canadian dollars in millions,
except per share amounts)
--------------------------------------------------------------
Year ended December 31, 1997 1996 1995
--------------------------------------------------------------
Retained Earnings at Beginning
of Year 266.5 212.1 198.0
Earnings 217.3 180.3 130.4
Dividends (147.1) (125.9) (116.3)
--------------------------------------------------------------
Retained Earnings at End of Year 336.7 266.5 212.1
--------------------------------------------------------------
Dividends Per Share 2.12 2.03 2.00
--------------------------------------------------------------
--------------------------------------------------------------
IPL ENERGY INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(audited; Canadian dollars in millions)
--------------------------------------------------------------
Year ended December 31, 1997 1996 1995
--------------------------------------------------------------
Cash Provided from
Operating Activities
Earnings 217.3 180.3 130.4
Charges (credits) not
affecting cash:
Depreciation 274.0 237.0 221.5
Deferred income taxes (0.1) 12.6 (14.9)
Minority interest - 22.1 15.0
Other (3.0) 12.8 13.8
Changes in working capital:
Accounts receivable and other (75.5) (82.2) (9.6)
Gas in storage (30.8) 13.9 58.6
Short term borrowings (48.0) 45.4 50.7
Accounts payable and other 92.9 92.0 (2.8)
Interest payable 5.2 4.1 7.3
--------------------------------------------------------------
432.0 538.0 470.0
--------------------------------------------------------------
Investing Activities
Short term investments, net - - 36.4
Long term investments (434.8) (65.0) (19.0)
Acquisition of subsidiaries
and joint ventures (3.6) (168.7) (85.3)
Additions to property, plant
and equipment (651.4) (560.5) (428.7)
Other (11.3) (28.2) (13.6)
--------------------------------------------------------------
(1,101.1) (822.4) (510.2)
--------------------------------------------------------------
Financing Activities
Variable rate financing, net 178.6 152.0 (804.0)
Fixed rate financing, net 359.5 107.4 835.5
Minority interest - (8.6) (8.0)
Capital stock 315.6 141.5 152.4
Dividends (147.1) (125.9) (116.3)
--------------------------------------------------------------
706.6 266.4 59.6
--------------------------------------------------------------
Increase (Decrease) in Cash 37.5 (18.0) 19.4
Cash at Beginning of Year 13.8 31.8 12.4
--------------------------------------------------------------
Cash at End of Year 51.3 13.8 31.8
--------------------------------------------------------------
--------------------------------------------------------------
IPL ENERGY INC.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(audited; Canadian dollars in millions)
--------------------------------------------------------------
December 31, 1997 1996
--------------------------------------------------------------
ASSETS
Current Assets
Cash 51.3 13.8
Accounts receivable and other 436.6 361.1
Gas in storage 309.9 279.1
--------------------------------------------------------------
797.8 654.0
Long Term Investments 517.3 177.1
Deferred Charges and Other 142.1 123.0
Property, Plant and Equipment, Net 5,215.0 4,807.0
--------------------------------------------------------------
6,672.2 5,761.1
--------------------------------------------------------------
--------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short term borrowings 398.8 446.8
Accounts payable and other 493.3 400.4
Interest payable 70.9 65.7
Current portion of long term liabilities 409.4 92.1
-------------------------------------------------------------
1,372.4 1,005.0
Long Term Debt 3,166.4 2,939.0
Deferred Credits 59.8 47.5
Deferred Income Taxes 374.2 373.6
-------------------------------------------------------------
4,972.8 4,365.1
-------------------------------------------------------------
Shareholders' Equity
Capital stock
Issued - 74,164,000 common shares
(1996 - 67,490,000) 1,441.8 1,126.2
Retained earnings 336.7 266.5
Foreign currency translation adjustment 12.9 3.3
Reciprocal shareholding (92.0) -
-------------------------------------------------------------
1,699.4 1,396.0
-------------------------------------------------------------
6,672.2 5,761.1
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