June 27, 2007
THE MLGW 2006 ANNUAL FINANCIAL REPORT
Well the audited MLGW statement for 2006 has finally been published and is on the MLGW website. Watchdog and friends have begun to look it over and here are the initial findings. It will take some time to really analyze the figures.
• The Electric Division made $70.3 million, up from $66.8 million in 2005. They have total current assets of $432 million and current liabilities of $266 million, a $166 million surplus.
• The Gas Division lost $12.6 million, a swing of $20 million from 2005. Their excess of current assets over current liabilities is $62 million down from $73 million in 2005.
• The Water Division made $7.9 million, up from $7.1 million in 2005. Their excess of current assets over current liabilities is $31 million up from $28 million in 2005.
There are some interesting items in the report. Here are just some.
• Write offs of trade receivables from the three divisions are up $3 million, about 33%.
• Management claimed in the report that the loss in the gas division was due to a 6% decrease in sales. This is clearly not so. The November 2006 statement shows the operating income negative variance of almost $24 Million as compared to 2005. You can see the lower 2006 volumes (MCF) were a small part of the problem, as was the Operating Expenses. The problem is the gas purchasing, and the .05 per ccf negative impact of natural gas sold. In 2006, as compared to 2005, the amount per ccf MLGW billed to the customer increased by .03 /ccf as MLGW's cost for that gas increased by .08 /ccf. They paid too much for the gas and did not recover it in their PGA add on.
• The pilot payment in the gas division was $15.6 million. This makes the total overpayments of pilots to the City of Memphis $45.6 million since starting in 2001. There is clearly a problem here as the City Charter and state laws are being violated. The gas division reserves are being sent to the City illegally.
• There is a history of the Memphis Networx debacle. This shows clearly that MLGW should never have been involved in this high tech business and also shows that transparency is critical in this kind of public/private business. It appears that the executives stripped the company of the investment through high salaries, benefits, perks etc. and the agreement that the MLGW signed did not allow any public disclosure. Further investigation is definitely needed in this affair. We have nothing to lose as we have lost our investment already.
Watchdog and friends will be studying the 2006 statement further and will have further reports as we get information hidden under the figures.
THE MLGW 2006 ANNUAL FINANCIAL REPORT
Well the audited MLGW statement for 2006 has finally been published and is on the MLGW website. Watchdog and friends have begun to look it over and here are the initial findings. It will take some time to really analyze the figures.
• The Electric Division made $70.3 million, up from $66.8 million in 2005. They have total current assets of $432 million and current liabilities of $266 million, a $166 million surplus.
• The Gas Division lost $12.6 million, a swing of $20 million from 2005. Their excess of current assets over current liabilities is $62 million down from $73 million in 2005.
• The Water Division made $7.9 million, up from $7.1 million in 2005. Their excess of current assets over current liabilities is $31 million up from $28 million in 2005.
There are some interesting items in the report. Here are just some.
• Write offs of trade receivables from the three divisions are up $3 million, about 33%.
• Management claimed in the report that the loss in the gas division was due to a 6% decrease in sales. This is clearly not so. The November 2006 statement shows the operating income negative variance of almost $24 Million as compared to 2005. You can see the lower 2006 volumes (MCF) were a small part of the problem, as was the Operating Expenses. The problem is the gas purchasing, and the .05 per ccf negative impact of natural gas sold. In 2006, as compared to 2005, the amount per ccf MLGW billed to the customer increased by .03 /ccf as MLGW's cost for that gas increased by .08 /ccf. They paid too much for the gas and did not recover it in their PGA add on.
• The pilot payment in the gas division was $15.6 million. This makes the total overpayments of pilots to the City of Memphis $45.6 million since starting in 2001. There is clearly a problem here as the City Charter and state laws are being violated. The gas division reserves are being sent to the City illegally.
• There is a history of the Memphis Networx debacle. This shows clearly that MLGW should never have been involved in this high tech business and also shows that transparency is critical in this kind of public/private business. It appears that the executives stripped the company of the investment through high salaries, benefits, perks etc. and the agreement that the MLGW signed did not allow any public disclosure. Further investigation is definitely needed in this affair. We have nothing to lose as we have lost our investment already.
Watchdog and friends will be studying the 2006 statement further and will have further reports as we get information hidden under the figures.
posted by watchdog at
9:22 AM
0 Comments:
Post a Comment
<< Home