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ENRON GLOBAL POWER & PIPELINES REPORTS THIRD QUARTER 1996 EARNINGS PER SHARE OF $0.45
FOR IMMEDIATE RELEASE: Tuesday, October 15, 1996
HOUSTON -- Enron Global Power & Pipelines L.L.C. (Ticker Symbol: EPP) today reported earnings per share of $0.45 for the third quarter of 1996, after a one-time Argentine tax charge, compared to $0.43 per share in the third quarter of 1995. Net income for the third quarter of 1996, prior to the $1.4 million retroactive Argentine tax provision, was $12.3 million compared to net income of $9.0 million in the third quarter of 1995. Reported net income in the third quarter of 1996 was $10.9 million, including the retroactive tax increase.
For the first nine months of 1996, EPP’s earnings per share increased 17 percent to $1.41 compared to $1.21 per share for the first nine months of 1995. Reported net income in the first nine months of 1996 was $34.0 million compared to $25.1 million in the first nine months of 1995.
“Our third quarter and year to date results reflect the strong operating performance of all of our power and pipeline assets,” said Rodney L. Gray, chairman, president and chief executive officer. “Our 1996 acquisitions are expected to be strong contributors to EPP’s portfolio. We are pleased with the progress being made by Enron Corp. with several major international projects, including projects which will be offered to EPP pursuant to the terms of the purchase right agreement between Enron and EPP.”
Pipeline Operations
EPP’s pipeline operations include a 33 1/3 percent ownership interest in Compania de Inversiones de Energia S.A. (CIESA), which owns 70 percent of Transportadora de Gas del Sur in Argentina, and an approximate 50 percent ownership interest in the Centragas natural gas pipeline in Colombia. Pipeline operations reported equity earnings of $5.9 million in the third quarter of 1996 compared to $6.3 million in the third quarter of 1995. The third quarter of 1996 includes the $1.4 million retroactive tax charge in Argentina, due to the September increase in the statutory income tax rate from 30 percent to 33 percent retroactive to January 1, 1996. Pipeline earnings also reflect a $1.5 million charge for Colombian income tax on foreign exchange gains. The strengthening of the Colombian peso during the third quarter of 1996 generated an in-country taxable foreign exchange gain resulting from the net U.S. dollar-denominated liabilities of the Centragas project. Any future weakening of the Colombian peso will result in a reduction of local taxes. The combined effect of the Argentine and Colombian tax provisions essentially offset EPP’s higher 1996 earnings from its increased ownership in CIESA during the third quarter and the acquisition of an interest in Centragas in the first quarter.
Power Operations
EPP’s power operations consist of interests in two power plants in the Philippines and one power plant in both Guatemala and the Dominican Republic. Power operations reported a $1.4 million increase in equity earnings to $4.0 million in the third quarter of 1996 compared to $2.6 million in the third quarter of 1995. The increase is primarily due to EPP’s acquisition of a 50 percent interest in the 185-megawatt Dominican Republic power project during the second quarter of 1996.
Enron Global Power & Pipelines, owned 59 percent by Enron Corp., is traded on the New York Stock Exchange under the ticker symbol “EPP”.
For additional information please contact:
Gary Foster
(713)853-4527
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