-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, jBnN6KlLd0+F6aUT3eeeB9d8QoW4UpxrYQOvh6DzwLVDtLj5lTUHjELePuKbqGAI bqoFZ/pYtDl/uF8tANJg4g== 0000033213-95-000003.txt : 19950517 0000033213-95-000003.hdr.sgml : 19950516 ACCESSION NUMBER: 0000033213-95-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950512 SROS: NYSE SROS: PHLX FILER: COMPANY DATA: COMPANY CONFORMED NAME: EQUITABLE RESOURCES INC /PA/ CENTRAL INDEX KEY: 0000033213 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS TRANSMISSION & DISTRIBUTION [4923] IRS NUMBER: 250464690 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-03551 FILM NUMBER: 95537679 BUSINESS ADDRESS: STREET 1: 420 BLVD OF THE ALLIES CITY: PITTSBURGH STATE: PA ZIP: 15219 BUSINESS PHONE: 4122613000 MAIL ADDRESS: STREET 1: 420 BOULEVARD OF THE ALLIES CITY: PITTSBURGH STATE: PA ZIP: 15219 FORMER COMPANY: FORMER CONFORMED NAME: EQUITABLE GAS CO DATE OF NAME CHANGE: 19841120 10-Q 1 MARCH 1995 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _____________ FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1995 or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _______ TO _______ COMMISSION FILE NUMBER 1-3551 EQUITABLE RESOURCES, INC. (Exact name of registrant as specified in its charter) PENNSYLVANIA 25-0464690 (State of incorporation or organization) (IRS Employer Identification No.) 420 Boulevard of the Allies, Pittsburgh, Pennsylvania 15219 (Address of principal executive offices, including zip code) Registrant's telephone number, including area code: (412) 261-3000 ____________ NONE (Former name, former address and former fiscal year, if changed since last report) ____________ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate the number of shares outstanding of each of issuer's classes of common stock, as of the close of the period covered by this report. Outstanding at Class March 31, 1995 Common stock, no par value 34,694,575 shares EQUITABLE RESOURCES, INC. AND SUBSIDIARIES Index Page No. Part I. Financial Statements: Statements of Consolidated Income for the Three Months Ended March 31, 1995 and 1994 and the Twelve Months Ended March 31, 1995 and 1994 1 Statements of Consolidated Cash Flows for the Three Months Ended March 31, 1995 and 1994 and the Twelve Months Ended March 31, 1995 and 1994 2 Consolidated Balance Sheets, March 31, 1995 and 1994 and December 31, 1994 3 - 4 Long-Term Debt, March 31, 1995 and 1994 5 Notes to Consolidated Financial Statements 6 Gas Produced, Purchased and Sold 7 - 10 Information by Business Segment 11 Management's Discussion and Analysis of Financial Condition and Results of Operations 12 - 17 Part II. Other Information 18 Signature 19 EQUITABLE RESOURCES, INC. AND SUBSIDIARIES Statements of Consolidated Income (Thousands Except Per Share Amounts)
Three Months Ended Twelve Months Ended March 31, March 31, 1995 1994 1995 1994 Operating Revenues . . . $404,691 $439,538 $1,362,433 $1,264,513 Cost of Gas Purchased. . 258,557 281,646 903,816 788,437 Net operating revenues. 146,134 157,892 458,617 476,076 Operating Expenses: Operation . . . . . . . 48,314 50,888 190,225 185,151 Maintenance . . . . . . 6,978 7,128 31,587 30,127 Depreciation and depletion . . . 28,625 22,894 99,078 82,139 Taxes other than income 13,905 16,003 40,146 42,532 Total operating expenses. . . . 97,822 96,913 361,036 339,949 Operating Income . . . . 48,312 60,979 97,581 136,127 Other Income . . . . . . (611) 332 2,220 1,755 Interest Charges . . . . 12,866 9,998 46,773 39,662 Income Before Income Taxes . . . 34,835 51,313 53,028 98,220 Income Taxes . . . . . . 7,081 14,954 904 19,201 Net Income . . . . . . .$ 27,754 $ 36,359 $ 52,124 $ 79,019 Average Common Shares Outstanding. 34,635 34,479 34,554 33,070 Earnings Per Share of Common Stock. . . . . . $.80 $ 1.05 $ 1.51 $ 2.39 Dividends Per Share of Common Stock. . . . . . $.59 $ .57 $ 1.17 $ 1.13
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES Statements of Consolidated Cash Flows (Thousands)
Three Months Ended Twelve Months Ended March 31, March 31, 1995 1994 1995 1994 Cash Flows from Operating Activities: Net Income. . . . . . . . . . $ 27,754 $ 36,359 $ 52,124 $ 79,019 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation and depletion.. . . . 28,625 22,894 99,078 82,139 Deferred income taxes (benefits) . (9,616) 824 (15,499) 3,271 Other - net . . . . . . . 2,543 3,080 1,029 2,129 Changes in other assets and liabilities: Accounts receivable and unbilled revenues (20,161) (62,813) 43,375 (73,672) Gas stored underground. . 11,412 16,648 (2,278) 5,488 Material and supplies . . 2,774 (238) 2,397 (2,536) Deferred purchased gas cost . . . 25,695 7,931 10,022 (17,687) Prepaid expenses and other. . . . (2,657) (4,223) (8,026) (4,738) Regulatory assets . . . . 21 (1,254) (88) (19,204) Accounts payable. . . . . (10,397) 21,219 (52,030) 43,156 Accrued taxes . . . . . . (3,684) 17,203 (16,657) 2,439 Refunds due customers . . 2,792 1,909 8,932 4,883 Customer credit balances. (9,198) (7,560) 1,211 (919) Other - net . . . . . . . 15,542 2,515 18,496 5,959 Total adjustments. . . . 33,691 18,135 89,962 30,708 Net cash provided (used) by operating activities. . . . . 61,445 54,494 142,086 109,727 Cash Flows from Investing Activities: Capital expenditures . . . . (30,724) (24,536) (152,362) (337,357) Proceeds from sale of property. . . . 647 231 1,611 1,077 Net cash used in investing activities . (30,077) (24,305) (150,751) (336,280) Cash Flows from Financing Activities: Issuance of common stock. . . 658 479 1,970 112,701 Purchase of treasury stock . (69) - (464) (10) Dividends paid. . . . . . . . (10,224) (9,827) (40,083) (36,625) Proceeds from issuance of long-term debt. . . . - 43,185 (102) 43,112 Repayments and retirements of long-term debt. . - (1,971) - (1,971) Increase (decrease) in short-term loans . . . . (28,441) (68,700) 55,659 114,700 Net cash provided (used) by financing activities. . . . (38,076) (36,834) 16,980 231,907 Increase (decrease) in cash and cash equivalents (6,708) (6,645) 8,315 5,354 Cash and cash equivalents at beginning of period 23,415 15,037 8,392 3,038 Cash and cash equivalents at end of period . . $ 16,707 $ 8,392 $ 16,707 $ 8,392 Cash paid during the period for: Interest (net of amount capitalized). . . . . $ 13,418 $ 11,786 $ 41,737 $ 35,696 Income taxes . . . . . . . . $ (465) $ (2,281) $ 14,914 $ 24,052
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES Consolidated Balance Sheets (Thousands)
March 31, December 31, 1995 1994 1994 ASSETS Property, Plant and Equipment: Exploration and production (successful efforts method) $ 998,625 $ 917,568 $ 983,328 Natural gas marketing . . . . . . . . . 312,919 298,999 309,579 Natural gas distribution. . . . . . . . 561,455 528,674 552,789 Natural gas transmission. . . . . . . . 389,177 382,062 387,921 Total. . . . . . . . . . . . . . . . 2,262,176 2,127,303 2,233,617 Less accumulated depreciation and depletion 666,217 580,634 637,951 Net property, plant and equipment. 1,595,959 1,546,669 1,595,666 Current Assets: Cash and cash equivalents . . . . . . . 16,707 8,392 23,415 Accounts receivable (less accumulated provision for doubtful accounts: March 31, 1995 $13,224; 1994 $12,995; December 31, 1994, $10,890) . . . . . 199,845 240,383 172,178 Unbilled revenues . . . . . . . . . . 15,954 19,020 25,794 Gas stored underground - current inventory 3,689 1,411 15,101 Material and supplies . . . . . . . . . 10,102 12,499 12,876 Deferred purchased gas cost . . . . . . (805) 9,217 24,890 Prepaid expenses and other . . . . . . 36,226 28,200 33,569 Total current assets . . . . . . . . 281,718 319,122 307,823 Other Assets: Regulatory assets . . . . . . . . . . . 88,366 88,278 88,387 Other . . . . . . . . . . . . . . . . 26,722 26,940 27,246 Total other assets . . . . . . . . . 115,088 115,218 115,633 Total . . . . . . . . . . . . . . $1,922,765 $1,981,009 $2,019,122
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES Consolidated Balance Sheets (Thousands)
March 31, December 31, 1995 1994 1994 CAPITALIZATION AND LIABILITIES Capitalization: Common stockholders' equity: Common stock, no par value, authorized 80,000 shares; shares issued March 31, 1995, 35,329; March 31, 1994, 35,113; December 31, 1994, 35,173 . . . . . . . . . . . . . $ 227,086 $ 223,443 $ 224,963 Retained earnings . . . . . . . . . . . 548,775 537,137 541,476 Treasury stock, shares at cost March 31, 1995, 634; March 31, 1994, 618; December 31, 1994, 632. . . . . . . . . . . . . . . . . . (15,002) (14,538) (14,933) Foreign currency translation. . . . . (1,514) (1,290) (1,504) Total common stockholders' equity. . 759,345 744,752 750,002 Long-term debt . . . . . . . . . . . . . 397,026 422,401 398,282 Total capitalization . . . . . . . 1,156,371 1,167,153 1,148,284 Current Liabilities: Long-term debt payable within one year . 24,500 - 24,500 Short-term loans . . . . . . . . . . . . 240,859 185,200 269,300 Accounts payable . . . . . . . . . . . . 112,997 165,027 123,394 Accrued taxes . . . . . . . . . . . . . . 15,904 32,561 19,588 Accrued interest . . . . . . . . . . . . 11,421 9,832 13,032 Refunds due customers . . . . . . . . . . 25,047 16,115 22,255 Dividends payable . . . . . . . . . . . 10,231 9,828 - Customer credit balances . . . . . . . . 1,229 18 10,427 Other . . . . . . . . . . . . . . . . . . 197 17,083 16,399 Total current liabilities. . . . . 442,385 435,664 498,895 Deferred and Other Credits: Deferred income taxes . . . . . . . . . . 344,875 331,129 326,597 Deferred investment tax credits . . . . . 21,816 22,907 22,082 Other . . . . . . . . . . . . . . . . . . 27,318 24,156 23,264 Total deferred and other credits . 394,009 378,192 371,943 Total . . . . . . . . . . . . . . $1,992,765 $1,981,009 $2,019,122
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES Long-Term Debt (Thousands)
Annual Maturities Debt Maturities After One Year March 31, March 31, 1995 1994 1995 1994 8 1/4% Debentures, due July 1, 1996 (a) $ $ $ 75,000 $ 75,000 7 1/2% Debentures, due July 1, 1999 ($75,000 principal amount net of unamortized original issue discount) (a) 70,675 69,875 9 1/2% Convertible subordinated debentures, due January 15, 2006 851 2,526 9.9% Debentures, due April 15, 2013 (b) 75,000 75,000 Medium-Term Notes: 7.2% to 9.0% Series A, due 1998 thru 2021 100,000 100,000 5.1% to 7.6% Series B, due 1995 thru 2023 24,500 75,500 100,000 Total . . . . . . . . . . . . . $24,500 $ 0 $397,026 $422,401 (a) Not redeemable prior to maturity. (b) Annual sinking fund payments of $3,750,000 are required beginning in 1999.
Equitable Resources, Inc. and Subsidiaries Notes to Consolidated Financial Statements A. The accompanying financial statements should be read in conjunction with th e Company's 1994 Annual Report on Form 10-K. B. In the opinion of the Company, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly the financial position as of March 31, 1995 and 1994 and the results of operations for the three and twelve months then ended and cash flows for the three and twelve months then ended. All of the adjustments are of a normal recurring nature. C. The results of operations for the three-month periods ended March 31, 1995 and 1994 are not indicative of results for a full year because of the seasonal nature of the Company's operations. D. At March 31, 1995, 2,713,000 shares of Common Stock were reserved as follows: 77,000 shares for conversion of the 9 1/2% Convertible Subordinated Debentures, 653,000 shares for issuance under the Key Employee Restricted Stock Option and Stock Appreciation Rights Incentive Compensation Plan, 1,726,000 shares for issuance under the Long-Term Incentive Plan, 76,000 shares for issuance under the Non-Employee Directors' Stock Incentive Plan, and 181,000 shares for issuance under the Company's Dividend Reinvestment and Stock Purchase Plan.
Three Months Ended March 31, 1995 Exploration Natural Gas Natural Gas Natural Gas Intersegment and Production Marketing Distribution Transmission Eliminations Consolidated Gas Produced, Purchased and Sold (MMcf): Produced 17,262 29 532 17,823 Purchased: Other producers 113,481 11,894 1,571 126,946 Inter-segment purchases 958 10,744 5,030 (16,732) Total purchases 958 124,225 16,924 1,571 (16,732) 126,946 Total produced and purchased 18,220 124,225 16,953 2,103 (16,732) 144,769 Deduct: Net increase (decrease) in gas in storage (5,117) (171) (5,288) Extracted natural gas liquids (equivalent gas volumes) 467 1,593 2,060 System use and unaccounted for 131 407 4,210 225 4,973 Total 17,622 122,225 17,860 2,049 (16,732) 143,024 Gas Sales (MMcf): Residential 13,414 13,414 Commercial 1,778 1,778 Industrial and Utility 2,668 1 2,669 Production 17,262 (228) 17,034 Marketing 360 122,225 2,048 (16,504) 108,129 Total 17,622 122,225 17,860 2,049 (16,732) 143,024 Natural Gas Transported (MMcf) 26,593 6,309 30,429 (27,720) 35,611 Oil Produced and Sold (thousands of bls) 511 511 Natural Gas Liquids Sold (thousands of gallons) 15,047 48,233 63,280 Average Selling Price: Residential Gas Sales (per Mcf) $ 9.155 Commercial Gas Sales 9.468 Industrial and Utility Gas Sales 1.883 Produced Natural Gas $ 1.612 Marketed Natural Gas 1.347 $ 1.602 $2.073 Oil (per barrel) 16.256 Natural Gas Liquids (per gallon) .349 .267
Three Months Ended March 31, 1994 Exploration Natural Gas Natural Gas Natural Gas Intersegment and Production Marketing Distribution Transmission Eliminations Consolidated Gas Produced, Purchased and Sold (MMcf): Produced 15,283 15 408 15,706 Purchased: Other producers 80,634 12,593 2,690 95,917 Inter-segment purchases 519 13,455 4,728 307 (19,009) Total purchases 519 94,089 17,321 2,997 (19,009) 95,917 Total produced and purchased 15,802 94,089 17,336 3,405 (19,009) 111,623 Deduct: Net increase (decrease) in gas in storage (5,961) (5,961) Extracted natural gas liquids (equivalent gas volumes) 226 1,267 1,493 System use and unaccounted for 86 380 1,273 135 1,874 Total 15,490 92,442 22,024 3,270 (19,009) 114,217 Gas Sales (MMcf): Residential 15,457 15,457 Commercial 5,183 5,183 Industrial and Utility 1,384 289 (273) 1,400 Production 15,283 (1,678) 13,605 Marketing 207 92,442 2,981 (17,058) 78,572 Total 15,490 92,442 22,024 3,270 (19,009) 114,217 Natural Gas Transported (MMcf) 21,731 3,122 35,331 (34,789) 25,395 Oil Produced and Sold (thousands of bls) 510 510 Natural Gas Liquids Sold (thousands of gallons) 8,442 43,454 51,896 Average Selling Price: Residential Gas Sales (per Mcf) $ 8.393 Commercial Gas Sales 6.753 Industrial and Utility Gas Sales 4.275 $ 4.647 Produced Natural Gas $ 2.520 Marketed Natural Gas 1.884 $2.393 2.818 Oil (per barrel) 12.171 Natural Gas Liquids (per gallon) .272 .247
Twelve Months Ended March 31, 1995 Exploration Natural Gas Natural Gas Natural Gas Intersegment and Production Marketing Distribution Transmission Eliminations Consolidated Gas Produced, Purchased and Sold (MMcf): Produced 64,486 157 1,995 66,638 Purchased: Other producers 422,557 44,933 6,144 473,634 Inter-segment purchases 2,962 45,209 13,265 165 (61,601) Total purchases 2,962 467,766 58,198 6,309 (61,601) 473,634 Total produced and purchased 67,448 467,766 58,355 8,304 (61,601) 540,272 Deduct: Net increase (decrease) in gas in storage 1,085 (352) 733 Extracted natural gas liquids (equivalent gas volumes) 1,787 6,703 8,490 System use and unaccounted for 525 1,629 9,328 358 11,840 Total 65,136 459,434 47,942 8,298 (61,601) 519,209 Gas Sales (MMcf): Residential 27,527 27,527 Commercial 6,276 6,276 Industrial and Utility 14,139 100 (3,303) 10,936 Production 64,486 (5,787) 58,699 Marketing 650 459,434 8,198 (52,511) 415,771 Total 65,136 459,434 47,942 8,298 (61,601) 519,209 Natural Gas Transported (MMcf) 108,588 11,798 118,570 (93,403) 145,553 Oil Produced and Sold (thousands of bls) 1,987 1,987 Natural Gas Liquids Sold (thousands of gallons) 57,637 199,272 256,909 Average Selling Price: Residential Gas Sales (per Mcf) $ 9.388 Commercial Gas Sales 7.774 Industrial and Utility Gas Sales 2.190 Produced Natural Gas $ 1.723 Marketed Natural Gas 1.578 $1.751 $2.084 Oil (per barrel) 15.772 Natural Gas Liquids (per gallon) .316 .267
Twelve Months Ended March 31, 1994 Exploration Natural Gas Natural Gas Natural Gas Intersegment and Production Marketing Distribution Transmission Eliminations Consolidated Gas Produced, Purchased and Sold (MMcf): Produced 55,738 116 1,632 57,486 Purchased: Other producers 267,671 32,453 18,939 319,063 Inter-segment purchases 3,405 43,708 15,349 2,769 (65,231) Total purchases 3,405 311,379 47,802 21,708 (65,231) 319,063 Total produced and purchased 59,143 311,379 47,918 23,340 (65,231) 376,549 Deduct: Net increase (decrease) in gas in storage 630 3,796 4,426 Extracted natural gas liquids (equivalent gas volumes) 2,725 4,429 7,154 System use and unaccounted for 229 1,181 3,565 1,387 6,362 Total 56,189 305,769 43,723 18,157 (65,231) 358,607 Gas Sales (MMcf): Residential 31,410 31,410 Commercial 9,684 9,684 Industrial and Utility 2,629 10,672 (9,842) 3,459 Production 55,738 (2,464) 53,274 Marketing 451 305,769 7,033 (52,473) 260,780 Total Gas Sales 56,189 305,769 43,723 17,705 (64,779) 358,607 Processed Gas Extracted 452 (452) Total 56,189 305,769 43,723 18,157 (65,231) 358,607 Natural Gas Transported (MMcf) 72,390 9,613 109,463 (86,050) 105,416 Oil Produced and Sold (thousands of bls) 2,073 2,073 Natural Gas Liquids Sold (thousands of gallons) 53,667 144,672 198,339 Average Selling Price: Residential Gas Sales (per Mcf) $ 8.577 Commercial Gas Sales 7.000 Industrial and Utility Gas Sales 4.328 $ 5.212 Produced Natural Gas $ 2.309 Marketed Natural Gas 2.075 $ 2.300 2.645 Oil (per barrel) 14.968 Natural Gas Liquids (per gallon) .307 .265
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES Information by Business Segment (Thousands)
Three Months Ended Twelve Months Ended March 31, March 31, 1995 1994 1995 1994 (Thousands) Operating Revenues: Exploration and production . $ 46,344 $ 52,136 $ 190,003 $ 205,510 Natural gas marketing . . 211,005 233,926 867,857 749,707 Natural gas distribution. 162,281 179,673 373,083 370,205 Natural gas transmission 31,645 36,478 111,936 154,281 Sales between segments . (46,584) (62,675) (180,446) (215,190) Total . . . . . . . . $404,691 $439,538 $1,362,433 $1,264,513 Operating Income: Exploration and production . $ 1,731 $ 11,354 $ 21,220 $ 42,700 Natural gas marketing . . 2,247 1,457 4,879 12,106 Natural gas distribution. 32,787 36,762 39,205 48,689 Natural gas transmission 11,547 11,406 32,277 32,632 Total . . . . . . . . . $ 48,312 $ 60,979 $ 97,581 $ 136,127 Capital Expenditures: Exploration and production . .$ 16,384 $ 13,784 $ 87,060 $ 96,602 Natural gas marketing . . 3,327 1,105 17,987 196,147 Natural gas distribution. 9,522 5,975 36,259 26,647 Natural gas transmission. 1,491 3,672 11,056 17,961 Total . . . . . . . . . $ 30,724 $ 24,536 $ 152,362 $ 337,357
Management's Discussion and Analysis of Financial Condition and Results of Operations OVERVIEW Consolidated net income for the quarter ended March 31, 1995 was $27.8 million or $.80 per share, compared with $36.4 million or $1.05 per share for the quarter ended March 31, 1994. The decrease in income is due to a 36 percent decline in average wellhead gas prices and lower retail utility gas sales reflecting 12 percent warmer weather. These decreases were partially offset by a 13 percent increase in natural gas production. Consolidated net income for the twelve months ended March 31, 1995 was $52.1 million or $1.51 per share, compared with $79.0 million or $2.39 per share for the twelve months ended March 31, 1994. The decrease in income is due primarily to a 25 percent decline in average wellhead gas prices, lower margins from the Company's Louisiana Intrastate Gas subsidiary, and lower retail utility gas sales reflecting 13 percent warmer weather. The impact of these items was partially offset by a 16 percent increase in natural gas production. RESULTS OF OPERATIONS EXPLORATION AND PRODUCTION Operating revenues, which are derived primarily from the sale of produced natural gas, oil and natural gas liquids and from contract drilling, were $46.3 million for the quarter ended March 31, 1995, compared with $52.1 million for the quarter ended March 31, 1994. Operating revenues for the twelve months ended March 31, 1995 were $190.0 million compared with $205.5 million for the twelve months ended March 31, 1994. The decrease in revenues for the current periods is due primarily to lower wellhead prices for natural gas which were partially offset by increased production of natural gas and increases in production and prices for natural gas liquids. Three Months Ended Twelve Months Ended March 31, March 31, Exploration and Production 1995 1994 1995 1994 Operating Revenues (thousands): Natural Gas . . . . . . $27,828 $38,506 $111,132 $128,691 Oil . . . . . . . . 8,307 6,207 31,339 31,024 Natural Gas Liquids . . 5,252 2,299 18,197 16,452 Contract Drilling . . . 2,846 3,474 14,799 14,928 Direct Billing Settlements . . . - - 7,815 7,815 Other . 2,111 1,650 6,721 6,600 Total Revenues . $46,344 $52,136 $190,003 $205,510 Sales Quantities: Natural Gas (MMcf). . . 17,262 15,283 64,486 55,738 Oil (MBls). . . . . . . 511 510 1,987 2,073 Natural Gas Liquids (thousands of gallons) . . . 15,047 8,442 57,637 53,667 Gas purchased amounted to $2.8 million for the quarter ended March 31, 1995 compared with $2.7 million for the quarter ended March 31, 1994. Gas purchased for the twelve months ended March 31, 1995 amounted to $10.7 million compared with $15.4 million for the twelve months ended March 31, 1994. The decrease in gas purchased for the twelve month period is due to lower prices. Other operating expenses were $41.8 million for the three months ended March 31, 1995 compared with $38.0 million for the three months ended March 31, 1994. Other operating expenses for the twelve months ended March 31, 1995 were $158.1 million compared with $147.4 million for the twelve months ended March 31, 1994. Increases for the current periods are attributed to increased depreciation and depletion related to the higher level of natural gas production. Operating income was $1.7 million for the three months ended March 31, 1995 compared with $11.4 million for the three months ended March 31, 1994. Operating income for the twelve months ended March 31, 1995 was $21.2 million compared with $42.7 million for the twelve months ended March 31, 1994. The decrease in operating income for the current periods reflects lower wellhead prices for natural gas which was partially offset by increased gas production. Average wellhead natural gas prices continued to decline during the first quarter of 1995. Prices for oil and natural gas liquids rebounded during the first quarter of 1995 reversing the declining trend that began as far back as 1991. While natural gas prices are expected to remain depressed, gas production for 1995 is expected to be 10 to 15 percent higher than 1994 levels which will lessen the impact of lower prices. NATURAL GAS MARKETING Operating revenues, which are derived primarily from the marketing of natural gas, sale of produced natural gas liquids, and intrastate transportation of natural gas in Louisiana, were $211.0 million for the three months ended March 31, 1995 compared with $233.9 million for the three months ended March 31, 1994. The decrease in revenues reflects a 33 percent decrease in the average price of marketed gas partially offset by a 32 percent increase in marketed gas volumes. Operating revenues for the twelve months ended March 31, 1995 were $867.9 million compared with $749.7 million for the twelve months ended March 31, 1994. Increases in marketed gas sales and production of natural gas liquids, reflecting a full year of operations of LIG, were partially offset by a 24 percent decline in the average price of marketed natural gas. Three Months Ended Twelve Months Ended March 31, March 31, Natural Gas Marketing 1995 1994 1995 1994 Operating Revenues (thousands): Natural Gas Marketing $195,755 $221,255 $804,582 $703,071 Natural Gas Liquids . 12,884 10,741 53,256 38,317 Transportation. . . . 2,293 1,887 9,672 8,134 Other . 73 43 347 185 Total Revenues $211,005 $233,926 $867,857 $749,707 Sales Quantities: Marketed Natural Gas (MMcf). . 122,225 92,442 459,434 305,769 Natural Gas Liquids (thousands of gallons) . . . 48,233 43,454 199,272 144,672 Gas purchased amounted to $201.3 million for the three months ended March 31, 1995 compared with $225.4 million for the three months ended March 31, 1994. The decrease in cost of gas purchased is due primarily to the lower prices of gas purchased for marketing. Gas purchased for the twelve months ended March 31, 1995 was $833.3 million compared with $719.4 million for the twelve months ended March 31, 1994. The increase reflects the higher volume of marketed natural gas and requirements for the higher production levels of natural gas liquids partially offset by lower prices for purchased gas. Other operating expenses were $7.5 million for the three months ended March 31, 1995 compared with $7.0 million for the three months ended March 31, 1994. Other operating expenses for the twelve months ended March 31, 1995 were $29.7 million compared with $18.2 million for the twelve months ended March 31, 1994. The increase for the twelve months reflects a full year of operations for LIG. Operating income was $2.2 million for the three months ended March 31, 1995 compared with $1.5 million for the three months ended March 31, 1994. Operating income for the twelve months ended March 31, 1995 was $4.9 million compared with $12.1 million for the twelve months ended March 31, 1994. The decrease for the twelve months is due to lower margins for liquids processing. NATURAL GAS DISTRIBUTION Operating revenues, which are derived from the sale and transportation of natural gas primarily to retail customers at state regulated rates, were $162.3 million for the three months ended March 31, 1995 compared with $179.7 million for the three months ended March 31, 1994. The decrease in revenues is due primarily to lower retail gas sales reflecting weather that was 12 percent warmer than the first quarter of 1994. Operating revenues for the twelve months ended March 31, 1995 were $373.1 million compared with $370.2 million for the twelve months ended March 31, 1994. The increase in revenues is due to increased sales to utilities and higher transportation revenues which were substantially offset by lower retail gas sales reflecting 13 percent warmer weather. Three Months Ended Twelve Months Ended March 31, March 31, Natural Gas Distribution 1995 1994 1995 1994 Operating Revenues (thousands): Residential Gas Sales $122,807 $129,730 $258,433 $269,408 Commercial Gas Sales. 16,834 35,001 48,789 67,784 Industrial and Utility Gas Sales. 5,025 5,917 30,961 11,377 Transportation Service . . . . . 16,292 7,714 30,328 17,210 Other . 1,323 1,311 4,572 4,426 Total Revenues. . . $162,281 $179,673 $373,083 $370,205 Sales Quantities (MMcf): Residential Gas Sales 13,414 15,457 27,527 31,410 Commercial Gas Sales. 1,778 5,183 6,276 9,684 Industrial and Utility Gas Sales. 2,668 1,384 14,139 2,629 Transportation Deliveries. . . . 6,309 3,122 11,798 9,613 Heating Degree Days . 2,796 3,182 5,221 6,012 Gas purchased amounted to $96.7 million for the three months ended March 31, 1995 compared with $107.7 million for the three months ended March 31, 1994. The decrease in gas costs is due primarily to lower retail gas sales. Gas purchased for the twelve months ended March 31, 1995 was $221.9 million compared with $210.4 million for the twelve months ended March 31, 1994. The increase in gas costs reflects the pass-through of higher costs in rates to retail customers and the increase in sales to utility customers partially offset by lower retail gas sales. Other operating expenses were $32.8 million for the three months ended March 31, 1995 compared with $35.2 million for the three months ended March 31, 1994. Other operating expenses for the twelve months ended March 31, 1995 of $112.0 million were substantially unchanged from the $111.1 million for the twelve months ended March 31, 1994. Operating income was $32.8 million for the three months ended March 31, 1995 compared with $36.8 million for the three months ended March 31, 1994. Operating income for the twelve months ended March 31, 1995 was $39.2 million compared with $48.7 million for the twelve months ended March 31, 1994. The decrease in operating income for the current periods is due primarily to lower retail gas sales reflecting the warmer weather. NATURAL GAS TRANSMISSION Operating revenues, which are derived from the interstate transportation and storage of natural gas subject to federal regulation, and the marketing of natural gas, were $31.6 million for the three months ended March 31, 1995 compared with $36.5 million for the three months ended March 31, 1994. The decrease is due primarily to a decrease in the selling price and volume of marketed natural gas. Operating revenues for the twelve months ended March 31, 1995 were $111.9 million compared with $154.3 million for the twelve months ended March 31, 1994. The decrease in revenues reflects the effects of discontinuing merchant sales of gas under the FERC Order 636 restructuring which took effect in the middle of 1993. Three Months Ended Twelve Months Ended March 31, March 31, Natural Gas Transmission 1995 1994 1995 1994 Operating Revenues (thousands): Industrial and Utility Gas Sales. $ 363 $ 1,343 $ 1,329 $ 55,623 Marketed Gas Sales. . 4,245 8,401 17,088 18,601 Transportation Service . . . . . 20,849 21,348 69,459 61,553 Storage Service . . . 4,391 3,933 17,451 12,162 Other . 1,797 1,453 6,609 6,342 Total Revenues. . . $31,645 $36,478 $111,936 $154,281 Sales Quantities (MMcf): Industrial and Utility Gas Sales. . 1 289 100 10,672 Marketed Gas Sales. . 2,048 2,981 8,198 7,033 Transportation Deliveries. . . . 30,429 35,331 118,570 109,463 Gas purchased amounted to $3.3 million for the three months ended March 31, 1995 compared with $ 7.5 million for the three months ended March 31, 1994. The decrease is due primarily to lower marketed gas sales. Gas purchased for the twelve months ended March 31, 1995 was $14.0 million compared with $54.3 million for the twelve months ended March 31, 1994. The decrease in gas costs reflects the elimination of pipeline gas sales pursuant to FERC Order 636 restructuring. Other operating expenses amounted to $16.8 million for the three months ended March 31, 1995 compared with $17.6 million for the three months ended March 31, 1994. Other operating expenses for the twelve months ended March 31, 1995 were $65.6 million compared with $67.4 million for the twelve months ended March 31, 1994. Operating income of $11.5 million for the three months ended March 31, 1995 and $32.3 million for the twelve months ended March 31, 1995 was substantially the same as the 1994 amounts of $11.4 million and $32.7 million, respectively. CAPITAL RESOURCES AND LIQUIDITY Operating Activities Cash required for operations is impacted primarily by the seasonal nature of the Company's distribution operations. Gas purchased for storage during the nonheating season is financed with short-term loans, which are repaid as gas is withdrawn from storage and sold during the heating season. In addition, short-term loans are used to provide other working capital requirements during the nonheating season. Investing Activities The Company's business requires major ongoing expenditures for replacements, improvements, and additions to its distribution, transmission and storage plant, and continuing development and expansion of its resource production activities. A total of $140.9 million has been authorized for the 1995 capital expenditure program, with $71.0 million allocated to exploration and production, $25.2 million for natural gas marketing, $25.1 million for natural gas distribution and $19.6 million for natural gas transmission. Capital expenditures for the three months ended March 31, 1995 were $30.7 million. Short-term loans are also used as interim financing for a portion of capital expenditures. The Company expects to finance its 1995 capital expenditures with cash generated from operations and temporarily with short-term loans. Financing Activities The Company has adequate borrowing capacity to meet its financing requirements. In January 1995, the Company established a five-year revolving Credit Agreement with a group of banks providing $500 million of available credit. The agreement requires a facility fee of one-tenth of one percent. Bank loans and commercial paper, supported by available credit, are used to meet short-term financing requirements. At March 31, 1995, $210.5 million of commercial paper and $30.4 million of bank loans were outstanding at an average interest rate of 6.11 percent. Adequate credit is expected to continue to be available in the future. In April 1995, Columbia Gas filed its bankruptcy reorganization plan, which is subject to approval, that includes settlement of Equitable's producer claims for abrogation of long-term contracts by Columbia. Based upon the plan, Equitable expects to net approximately $25 million of pre-tax income, after pro-rata distribution to claim co-owners. In addition, Equitable will receive approximately $19 million related to direct billing settlements previously approved by the FERC. Balance Sheet Changes The changes in deferred purchased gas cost are due to the timing of pass- through of gas costs to ratepayers. Changes in deferred purchased gas costs generally do not affect results of operations due to regulatory procedures for purchased gas cost recovery in rates. PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits: None (b) Reports on Form 8-K during the quarter ended March 31, 1995: None. Signature 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 thereunto duly authorized. EQUITABLE RESOURCES, INC. (Registrant) s/ Joseph L. Giebel Joseph L. Giebel Vice President - Accounting and Administration Chief Accounting Officer Date: May 12, 1995 EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 3-MOS DEC-31-1995 MAR-31-1995 16,707 0 215,799 13,224 13,791 281,718 2,262,176 666,217 1,992,765 442,385 397,026 212,084 0 0 547,261 1,992,765 404,691 404,691 0 356,379 0 4,591 12,866 34,835 7,081 27,754 0 0 0 27,754 .80 .80
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