PIPELINES / NOVA Corp. Reports 1997 Earnings (Part II of II)
Dividends
NOVA's Board of Directors has approved the payment of a quarterly
dividend of $0.10 per share payable on February 15, 1998 to shareholders of
record as of January 30, 1998.
Capitalization(1)
(unaudited; millions of dollars) Dec. 31 Sept. 30 Dec. 31
1997 % 1997 % 1996 %
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Regulated Businesses(2)
Long-term debt(3) $3,785 67 $3,747 67 $3,774 67
Shareholders' equity 1,880 33 1,851 33 1,885 33
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$5,665 $5,598 $5,659
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Non-regulated Businesses
Long-term debt and
current bank loans(3) $1,415 39 $1,283 36 $1,107 36
Shareholders' equity 2,173 61 2,228 64 1,990 64
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$3,588 $3,511 $3,097
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(1) Includes proportionately consolidated businesses.
(2) Includes NGT, NOVA's proportionate share of Foothills Pipe Lines
Ltd. and the ethylene cost-of-service operations.
(3) Includes current portion and is net of cash available for debt
repayment.
NOVA's total return to shareholders was 15.6 per cent for the year ended
December 31, 1997, compared with a total return of 15.0 per cent for the TSE
100. The majority of NOVA's share price appreciation occurred in the fourth
quarter after the company signaled its intention to reorganize.
FINANCIAL SCHEDULES AND STATEMENTS
Changes in Net Income
(unaudited; millions of dollars except share data)
Increase (Decrease) in Net Income
----------------------------------------
Q4 1997 1997
Compared With Compared With
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Q3 1997 Q4 1996 1996
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NOVA Chemicals
Lower product margins $ (5) $ (29) $ (21)
Higher sales volumes 3 10 10
Higher (lower) equity earnings (6) 32 72
Higher (lower) licensing income 2 3 (5)
Higher interest expense (2) (3) (10)
Unscheduled shutdown (13) (13) (13)
Manufacturing problems - - (7)
Other (9) (14) (15)
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(30) (14) 11
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NOVA Gas Transmission
Increase in investment base - 2 7
Cost Efficiency Incentive 3 (2) 8
Other (1) (3) 4
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2 (3) 19
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NOVA Gas International
Lower equity earnings of NGC (1) (7) (12)
Write-down of assets (85) (85) (85)
Other 1 (2) (3)
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(85) (94) (100)
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Corporate and other 1 6 1
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Decrease in net income $ (112) $ (105) $ (69)
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Consolidated Statement of Income
(unaudited; millions of dollars except share data)
Three Months Ended Year Ended
Dec. 31 Dec. 31
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1997 1996 1997 1996
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Revenue $ 1,208 $ 1,191 $ 4,840 $ 4,686
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Operating costs and expenses
Operating expenses 871 804 3,421 3,317
Depreciation and amortization 126 120 477 431
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997 924 3,898 3,748
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Operating income 211 267 942 938
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Other income (deductions)
Interest expense (104) (97) (384) (372)
Allowance for funds used
during construction 5 2 12 6
Equity in earnings of affiliates 20 35 105 85
Other losses (85) (32) (85) (32)
General and corporate 3 1 (12) (11)
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(161) (91) (364) (324)
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Income before income taxes 50 176 578 614
Income taxes (47) (68) (216) (183)
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Net income $ 3 $ 108 $ 362 $ 431
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Number of common shares
outstanding (millions)
- average 449 467 456 475
- end of period 449 465 449 465
Net income per common share
fully diluted
- before asset write-down $ 0.19 $ 0.30 $ 0.96 $ 0.98
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- after asset write-down $ 0.00 $ 0.23 $ 0.78 $ 0.91
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Condensed Consolidated Balance Sheet Dec. 31 Dec. 31
(unaudited; millions of dollars) 1997 1996
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Assets
Cash $ 171 $ 253
Other current assets 1,210 1,111
Investments and other assets 1,684 1,649
Plant, property and equipment (net) 7,685 7,035
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$ 10,750 $ 10,048
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Liabilities
Current liabilities $ 1,593 $ 927
Long-term debt
- regulated businesses 3,657 3,625
- non-regulated businesses 1,054 1,227
Deferred credits 393 394
Shareholders' equity 4,053 3,875
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$ 10,750 $ 10,048
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Consolidated Statement of Cash Flows
(unaudited; millions of dollars)
Three Months Ended Year Ended
Dec. 31 Dec. 31
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1997 1996 1997 1996
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Operating activities
Net income $ 3 $ 108 $ 362 $ 431
Depreciation and amortization 126 120 477 431
Deferred income taxes 20 (1) (5) 12
Equity in earnings of affiliates (20) (35) (105) (85)
Other losses 85 32 85 32
Other (9) (12) 1 9
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Funds from operations 205 212 815 830
Changes in non-cash
working capital 20 18 123 (306)
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225 230 938 524
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Investing activities
Plant, property and
equipment additions (277) (119) (1,009) (537)
Less long-term debt additions
related to regulated businesses 42 63 267 173
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(235) (56) (742) (364)
Long-term investments and
other assets (32) (105) (134) (452)
Cash from long-term investments 2 6 131 29
Changes in non-cash working capital - (3) - (3)
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(265) (158) (745) (790)
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Financing activities
Preferred shares issued - - 194 -
Common shares issued 4 12 12 31
Common shares repurchased (11) (80) (209) (225)
Long-term debt additions related
to non-regulated business - 126 26 644
Long-term debt repaid (7) (41) (507) (198)
Dividends (47) (46) (190) (175)
Changes in current bank loans 272 27 398 83
Changes in non-cash
working capital - (23) 1 1
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211 (25) (275) 161
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Increase (decrease) in cash 171 47 (82) (105)
Cash at beginning of period - 206 253 358
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Cash at end of period $ 171 $ 253 $ 171 $ 253
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Joint Venture Accounting
NOVA's Proportionate Share of Joint Ventures'
Summarized Financial Information (1)
Three months ended Year Ended
Dec. 31 Dec. 31
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1997 1996 1997 1996
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Revenue $ 25 $ 93 $ 201 $ 566
Operating expenses $ 21 $ 77 $ 186 $ 502
Net income $ 4 $ 11 $ 15 $ 41
Cash flows from :
Operating activities $ 9 $ 11 $ 32 $ 93
Investing activities $ (4) $ (19) $ (21) $ (75)
Financing activities $ (5) $ (1) $ (9) $ (13)
Dec. 31 Dec. 31
1997 1996
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Current assets $ 15 $ 134
Plant, property and equipment 418 528
Investments and other assets 2 15
Current liabilities (6) (134)
Long-term debt (237) (273)
Deferred credits (49) (55)
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Shareholders' equity $ 143 $ 215
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(1) Consists of NOVA's proportionate share of financial statement items
from Foothills Pipe Lines, Novagas Clearinghouse Limited Partnership
and the petrochemical joint ventures. As of April 1, 1997 as part of
the Novagas Clearinghouse Ltd. restructuring, Novagas Clearinghouse
Limited Partnership is no longer proportionately consolidated.
Reconciliation to Accounting Principles
Generally Accepted in the United States
(unaudited; millions of dollars,
except share data)
Three months ended Year Ended
Dec. 31 Dec. 31
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1997 1996 1997 1996
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Net income using Canadian basis $ 3 $ 108 $ 362 $ 431
Add (deduct) adjustments for :
Foreign exchange losses (111) (14) (115) (9)
Equity in earnings (losses)
of affiliates (2) (10) (3) 1
Inventory valuation adjustment 1 2 (5) 5
Prior period adjustment under
Canadian GAAP - - - (9)
Development costs 2 3 4 3
Other (2) - (2) 1
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Net income using U.S. basis $ (109) $ 89 $ 241 $ 423
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Net income per share using U.S.
basis Basic and fully diluted $ (0.24) $ 0.19 $ (0.53) $ 0.89
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Balance sheet using U.S. basis
Dec. 31 Dec. 31
1997 1996
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Current assets $ 1,387 $ 1,261
Investments and other assets 2,369 2,399
Plant, property and equipment 7,257 6,465
Current liabilities (1,767) (775)
Long-term debt (4,474) (4,579)
Deferred credits (831) (887)
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Shareholders' equity $ 3,941 $ 3,884
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