0000033213-95-000004.txt : 19950818 0000033213-95-000004.hdr.sgml : 19950818 ACCESSION NUMBER: 0000033213-95-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950811 SROS: NYSE SROS: PHLX FILER: COMPANY DATA: COMPANY CONFORMED NAME: EQUITABLE RESOURCES INC /PA/ CENTRAL INDEX KEY: 0000033213 STANDARD INDUSTRIAL CLASSIFICATION: 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: 95561595 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 JUNE 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 JUNE 30, 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 (IRS Employer or organization) 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 June 30, 1995 Common stock, no par value 34,716,939 shares EQUITABLE RESOURCES, INC. AND SUBSIDIARIES Index Part I. Financial Statements: Statements of Consolidated Income for the Three Months Ended June 30, 1995 and 1994, the Six Months Ended June 30, 1995 and 1994 and the Twelve Months Ended June 30, 1995 and 1994 Statements of Consolidated Cash Flows for the Three Months Ended June 30, 1995 and 1994, the Six Months Ended June 30, 1995 and 1994, and the Twelve Months Ended June 30, 1995 and 1994 Consolidated Balance Sheets, June 30, 1995 and 1994 and December 31, 1994 Long-Term Debt, June 30, 1995 and 1994 Notes to Consolidated Financial Statements Gas Produced, Purchased and Sold Information by Business Segment Management's Discussion and Analysis of Financial Condition and Results of Operations Part II. Other Information Signature
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES Statements of Consolidated Income (Thousands Except Per Share Amounts) Three Months Ended Six Months Ended Twelve Months Ended June 30, June 30, June 30, 1995 1994 1995 1994 1995 1994 Operating Revenues $316,534 $316,122 $721,225 $755,660 $1,362,845 $1,372,853 Cost of Gas Purchased 218,721 221,331 477,278 502,977 901,206 887,865 Net operating revenues 97,813 94,791 243,947 252,683 461,639 484,988 Operating Expenses: Operation 49,620 45,244 97,934 96,132 194,601 190,363 Maintenance 6,223 7,719 13,201 14,847 30,091 30,862 Depreciation and depletion 28,800 22,434 57,425 45,328 105,444 87,770 Taxes other than income 8,138 9,340 22,043 25,343 38,944 43,790 Total operating expenses 92,781 84,737 190,603 181,650 369,080 352,785 Operating Income 5,032 10,054 53,344 71,033 92,559 132,203 Other Income 447 176 (164) 508 2,491 2,076 Interest Charges 12,678 10,931 25,544 20,929 48,520 41,960 Income (Loss) Before Income Taxes (7,199) (701) 27,636 50,612 46,530 92,319 Income Taxes (Benefits) (6,037) (6,758) 1,044 8,196 1,625 16,074 Net Income (Loss) $ (1,162) $ 6,057 $ 26,592 $ 42,416 $ 44,905 $ 76,245 Average Common Shares Outstanding 34,703 34,506 34,666 34,492 34,601 33,780 Earnings (Loss) Per Share of Common Stock $(.03) $.18 $.77 $1.23 $1.30 $2.26 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 Six Months Ended Twelve Months Ended June 30, June 30, June 30, 1995 1994 1995 1994 1995 1994 Cash Flows from Operating Activities: Net income (loss) $ (1,162) $ 6,057 $ 26,592 $ 42,416 $ 44,905 $ 76,245 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation and depletion 28,800 22,434 57,425 45,328 105,444 87,770 Deferred income taxes (benefits) (4,581) (4,748) (14,197) (3,924) (15,332) 744 Other - net (307) 275 2,236 3,355 447 2,672 Changes in other assets and liabilities: Accounts receivable and unbilled revenues 19,900 67,279 (261) 4,466 (4,004) (34,494) Gas stored underground (3,865) (6,134) 7,547 10,514 (9) 21,276 Material and supplies (1,740) (2,330) 1,034 (2,568) 2,987 (4,799) Deferred purchased gas cost 834 (5,563) 26,529 2,368 16,419 (17,966) Prepaid expenses and other (2,802) 4,562 (5,459) 339 (15,390) (5,685) Regulatory assets (1,449) (1,333) (1,428) (2,587) (204) (18,750) Accounts payable 2,429 (28,015) (7,968) (6,796) (21,586) (231) Accrued taxes (1,852) (15,153) (5,536) 2,050 (3,356) 1,850 Refunds due customers (3,840) 2,055 (1,048) 3,964 3,037 8,864 Customer credit balances 816 1,321 (8,382) (6,239) 706 205 Other - net (6,983) 5,812 8,559 8,327 5,701 2,684 Total adjustments 25,360 40,462 59,051 58,597 74,860 44,140 Net cash provided by operating activities 24,198 46,519 85,643 101,013 119,765 120,385 Cash Flows from Investing Activities: Capital expenditures (24,266) (35,970) (54,990) (60,506) (140,658) (155,355) Proceeds from sale of property 106 284 753 515 1,433 1,042 Net cash used in investing activities (24,160) (35,686) (54,237) (59,991) (139,225) (154,313) Cash Flows from Financing Activities: Issuance of common stock 544 395 1,202 874 2,119 113,053 Purchase of treasury stock (5) - (74) - (469) (10) Dividends paid (10,238) (9,835) (20,462) (19,662) (40,486) (37,974) Proceeds from issuance 17,878 - 17,878 43,185 17,776 43,112 of long-term debt Repayments and retirements - - - (1,971) - (1,971) of long-term debt Increase (decrease) in (16,785) 2,700 (45,226) (66,000) 36,174 (96,600) short-term loans Net cash provided (used) by financing activities (8,606) (6,740) (46,682) (43,574) 15,114 19,610 Increase (decrease) in cash and cash equivalents (8,568) 4,093 (15,276) (2,552) (4,346) (14,318) Cash and cash equivalents at beginning of period 16,707 8,392 23,415 15,037 12,485 26,803 Cash and cash equivalents at end of period $ 8,139 $ 12,485 $ 8,139 $ 12,485 $ 8,139 $ 12,485 Cash paid during the period for: Interest (net of amount capitalized) $15,960 $ 6,097 $29,378 $ 18,693 $51,600 $ 37,886 Income taxes $ 8,006 $ 8,792 $ 7,541 $ 6,511 $14,128 $ 19,469
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES Consolidated Balance Sheets (Thousands) June 30, December 31, 1995 1994 1994 ASSETS Property, Plant and Equipment: Exploration and production (successful efforts method) $1,010,688 $ 940,296 $ 983,328 Natural gas marketing 315,461 300,486 309,579 Natural gas distribution 568,316 534,558 552,789 Natural gas transmission 390,497 384,460 387,921 Total 2,284,962 2,159,800 2,233,617 Less accumulated depreciation and depletion 694,479 601,153 637,951 Net property, plant and equipment 1,590,483 1,558,647 1,595,666 Current Assets: Cash and cash equivalents 8,139 12,485 23,415 Accounts receivable (less accumulated provision for doubtful accounts: June 30, 1995 $12,708; 1994 $13,079; December 31, 1994, $10,890) 194,069 189,802 172,178 Unbilled revenues 2,346 2,238 25,794 Gas stored underground - current inventory 7,554 7,545 15,101 Material and supplies 11,842 14,829 12,876 Deferred purchased gas cost (1,639) 14,780 24,890 Deferred income taxes 9,569 2,210 (4,444) Prepaid expenses and other 39,028 23,638 33,569 Total current assets 270,908 267,527 303,379 Other Assets: Regulatory assets 89,815 89,611 88,387 Other 30,844 26,664 27,246 Total other assets 120,659 116,275 115,633 Total $1,982,050 $1,942,449 $2,014,678
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES Consolidated Balance Sheets (Thousands) June 30, December 31, 1995 1994 1994 CAPITALIZATION AND LIABILITIES Capitalization: Common stockholders' equity: Common stock, no par value, authorized 80,000 shares; shares issued June 30, 1995, 35,352; June 30, 1994, 35,139; December 31, 1994, 35,173 $ 227,670 $ 224,004 $ 224,963 Retained earnings 547,606 543,187 541,476 Treasury stock, shares at cost June 30, 1995, 635; June 30, 1994, 618; December 31, 1994, 632 (15,007) (14,538) (14,933) Foreign currency translation (1,200) (1,278) (1,504) Total common stockholders' equity 759,069 751,375 750,002 Long-term debt 415,195 422,425 398,282 Total capitalization 1,174,264 1,173,800 1,148,284 Current Liabilities: Long-term debt payable within one year 24,500 - 24,500 Short-term loans 224,074 187,900 269,300 Accounts payable 115,426 137,012 123,394 Accrued taxes 14,052 17,408 19,588 Accrued interest 7,395 12,988 13,032 Refunds due customers 21,207 18,170 22,255 Customer credit balances 2,045 1,339 10,427 Other 10,161 11,763 11,955 Total current liabilities 418,860 386,580 494,451 Deferred and Other Credits: Deferred income taxes 339,854 334,527 326,597 Deferred investment tax credits 21,542 22,635 22,082 Other 27,530 24,907 23,264 Total deferred and other credits 388,926 382,069 371,943 Total $1,982,050 $1,942,449 $2,014,678
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES Long-Term Debt (Thousands) Annual Maturities Debt Maturities After One Year June 30, June 30, 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) 70,884 70,066 9 1/2% Convertible subordinated debentures, due January 15, 2006 811 2,359 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 6.8% to 7.6% Series C, due 2007 thru 2018 18,000 Total $24,500 $ $415,195 $422,425 (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 the 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 June 30, 1995 and 1994 and the results of operations for the three, six and twelve months then ended and cash flows for the three, six and twelve months then ended. All of the adjustments are of a normal recurring nature. C. The results of operations for the three- and six-month periods ended June 30, 1995 and 1994 are not indicative of results for a full year because of the seasonal nature of the Company's operations. D. At June 30, 1995, 2,688,000 shares of Common Stock were reserved as follows: 74,000 shares for conversion of the 9 1/2% Convertible Subordinated Debentures, 644,000 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 168,000 shares for issuance under the Company's Dividend Reinvestment and Stock Purchase Plan. E. The Company filed a shelf registration with the Securities and Exchange Commission effective June 4, 1994 to issue $100 million of Medium-Term Notes--Series C to be used to retire short-term loans. As of June 30, 1995, $18 million of Medium-Term Notes-- Series C have been issued.
Three Months Ended June 30, 1995 Exploration Natural Gas Natural Gas Natural Gas Intersegment and Production Marketing Distribution Transmission Eliminations Consolidated Gas Produced, Purchased and Sold (MMcf): Produced 17,564 33 560 18,157 Purchased: Other producers 122,209 13,417 1,448 137,074 Inter-segment purchases 768 12,921 1,894 (15,583) Total purchases 768 135,130 15,311 1,448 (15,583) 137,074 Total produced and purchased 18,332 135,130 15,344 2,008 (15,583) 155,231 Deduct: Net increase (decrease) in gas in storage 2,224 171 2,395 Extracted natural gas liquids (equivalent gas volumes) 485 1,650 2,135 System use and unaccounted for 145 422 2,279 (121) 2,725 Total 17,702 133,058 10,841 1,958 (15,583) 147,976 Gas Sales (MMcf): Residential 4,070 4,070 Commercial 581 581 Industrial and Utility 6,190 6,190 Production 17,564 (80) 17,484 Marketing 138 133,058 1,958 (15,503) 119,651 Total 17,702 133,058 10,841 1,958 (15,583) 147,976 Natural Gas Transported (MMcf) 30,929 3,126 27,765 (22,206) 39,614 Oil Produced and Sold 500 (thousands of bls) 500 Natural Gas Liquids Sold (thousands of gallons) 16,087 49,791 65,878 Average Selling Price: Residential Gas Sales (per Mcf) $9.657 Commercial Gas Sales 9.246 Industrial and Utility Gas Sales 1.927 N/A Produced Natural Gas $1.482 Marketed Natural Gas 2.283 $1.584 $1.936 Oil (per barrel) 17.270 Natural Gas Liquids (per gallon) .328 .277
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Three Months Ended June 30, 1994 Exploration Natural Gas Natural Gas Natural Gas Intersegment and Production Marketing Distribution Transmission Eliminations Consolidated Gas Produced, Purchased and Sold (MMcf): Produced 14,151 47 467 14,665 Purchased: Other producers 97,278 8,283 1,377 106,938 Inter-segment purchases 625 9,335 2,340 103 (12,403) Total purchases 625 106,613 10,623 1,480 (12,403) 106,938 Total produced and purchased 14,776 106,613 10,670 1,947 (12,403) 121,603 Deduct: Net increase (decrease) in gas in storage 2,822 2,822 Extracted natural gas liquids (equivalent gas volumes) 363 1,842 2,205 System use and unaccounted for 125 408 116 (69) 580 Total 14,288 104,363 7,732 2,016 (12,403) 115,996 Gas Sales (MMcf): Residential 4,310 4,310 Commercial 1,733 1,733 Industrial and Utility 1,689 97 (92) 1,694 Production 14,151 (2,012) 12,139 Marketing 137 104,363 1,919 (10,299) 96,120 Total 14,288 104,363 7,732 2,016 (12,403) 115,996 Natural Gas Transported (MMcf) 26,248 1,786 28,806 (21,726) 35,114 Oil Produced and Sold (thousands of bls) 477 477 Natural Gas Liquids Sold (thousands of gallons) 12,869 51,509 64,378 Average Selling Price: Residential Gas Sales (per Mcf) $9.314 Commercial Gas Sales 6.298 Industrial and Utility Gas Sales 3.026 $3.814 Produced Natural Gas $2.006 Marketed Natural Gas 1.876 $2.016 2.326 Oil (per barrel) 14.432 Natural Gas Liquids (per gallon) .280 .253
Six Months Ended June 30, 1995 Exploration Natural Gas Natural Gas Natural Gas Intersegment and Production Marketing Distribution Transmission Eliminations Consolidated Gas Produced, Purchased and Sold (MMcf): Produced 34,826 62 1,092 35,980 Purchased: Other producers 235,690 25,311 3,019 264,020 Inter-segment purchases 1,726 23,665 6,924 (32,315) Total purchases 1,726 259,355 32,235 3,019 (32,315) 264,020 Total produced and purchased 36,552 259,355 32,297 4,111 (32,315) 300,000 Deduct: Net increase (decrease) in gas in storage (2,893) (2,893) Extracted natural gas liquids (equivalent gas volumes) 952 3,243 4,195 System use and unaccounted for 276 829 6,489 104 7,698 Total 35,324 255,283 28,701 4,007 (32,315) 291,000 Gas Sales (MMcf): Residential 17,484 17,484 Commercial 2,359 2,359 Industrial and Utility 8,858 1 8,859 Production 34,826 (308) 34,518 Marketing 498 255,283 4,006 (32,007) 227,780 Total 35,324 255,283 28,701 4,007 (32,315) 291,000 Natural Gas Transported (MMcf) 57,522 9,435 58,194 (49,926) 75,225 Oil Produced and Sold (thousands of bls) 1,011 1,011 Natural Gas Liquids Sold (thousands of gallons) 31,134 98,024 129,158 Average Selling Price: Residential Gas Sales (per Mcf) $9.272 Commercial Gas Sales 9.413 Industrial and Utility Gas Sales 1.914 N/A Produced Natural Gas $ 1.546 Marketed Natural Gas 1.606 $1.593 $2.006 Oil (per barrel) 16.758 Natural Gas Liquids (per gallon) .338 .272
Six Months Ended June 30, 1994 Exploration Natural Gas Natural Gas Natural Gas Intersegment and Production Marketing Distribution Transmission Eliminations Consolidated Gas Produced, Purchased and Sold (MMcf): Produced 29,434 62 875 30,371 Purchased: Other producers 177,912 20,876 4,067 202,855 Inter-segment purchases 1,144 22,790 7,068 410 (31,412) Total purchases 1,144 200,702 27,944 4,477 (31,412) 202,855 Total produced and purchased 30,578 200,702 28,006 5,352 (31,412) 233,226 Deduct: Net increase (decrease) in gas in storage (3,139) (3,139) Extracted natural gas liquids (equivalent gas volumes) 589 3,109 3,698 System use and unaccounted for 211 788 1,389 66 2,454 Total 29,778 196,805 29,756 5,286 (31,412) 230,213 Gas Sales (MMcf): Residential 19,767 19,767 Commercial 6,916 6,916 Industrial and Utility 3,073 386 (365) 3,094 Production 29,434 (3,690) 25,744 Marketing 344 196,805 4,900 (27,357) 174,692 Total 29,778 196,805 29,756 5,286 (31,412) 230,213 Natural Gas Transported (MMcf) 47,979 4,908 64,137 (56,515) 60,509 Oil Produced and Sold (thousands of bls) 987 987 Natural Gas Liquids Sold (thousands of gallons) 21,311 94,963 116,274 Average Selling Price: Residential Gas Sales (per Mcf) $8.594 Commercial Gas Sales 6.639 Industrial and Utility Gas Sales 3.589 $4.438 Produced Natural Gas $2.272 Marketed Natural Gas 1.881 $2.194 2.625 Oil (per barrel) 13.263 Natural Gas Liquids (per gallon) .277 .250
Twelve Months Ended June 30, 1995 Exploration Natural Gas Natural Gas Natural Gas Intersegment and Production Marketing Distribution Transmission Eliminations Consolidated Gas Produced, Purchased and Sold (MMcf): Produced 67,899 143 2,088 70,130 Purchased: Other producers 447,488 50,067 6,215 503,770 Inter-segment purchases 3,105 48,795 12,819 62 (64,781) Total purchases 3,105 496,283 62,886 6,277 (64,781) 503,770 Total produced and purchased 71,004 496,283 63,029 8,365 (64,781) 573,900 Deduct: Net increase (decrease) in gas in storage 487 (181) 306 Extracted natural gas liquids (equivalent gas volumes) 1,909 6,511 8,420 System use and unaccounted for 545 1,643 11,491 306 13,985 Total 68,550 488,129 51,051 8,240 (64,781) 551,189 Gas Sales (MMcf): Residential 27,287 27,287 Commercial 5,124 5,124 Industrial and Utility 18,640 3 (3,211) 15,432 Production 67,899 (3,855) 64,044 Marketing 651 488,129 8,237 (57,715) 439,302 Total 68,550 488,129 51,051 8,240 (64,781) 551,189 Natural Gas Transported (MMcf) 113,269 13,138 117,529 (93,883) 150,053 Oil Produced and Sold (thousands of bls) 2,010 2,010 Natural Gas Liquids Sold (thousands of gallons) 60,855 197,554 258,409 Average Selling Price: Residential Gas Sales (per Mcf) $9.440 Commercial Gas Sales 8.440 Industrial and Utility Gas Sales 2.027 N/A Produced Natural Gas $ 1.602 Marketed Natural Gas 1.665 $1.649 $1.993 Oil (per barrel) 16.463 Natural Gas Liquids (per gallon) .326 .273
Twelve Months Ended June 30, 1994 Exploration Natural Gas Natural Gas Natural Gas Intersegment and Production Marketing Distribution Transmission Eliminations Consolidated Gas Produced, Purchased and Sold (MMcf): Produced 58,058 122 1,822 60,002 Purchased: Other producers 324,445 37,467 10,243 372,155 Inter-segment purchases 3,295 44,786 13,691 1,103 (62,875) Total purchases 3,295 369,231 51,158 11,346 (62,875) 372,155 Total produced and purchased 61,353 369,231 51,280 13,168 (62,875) 432,157 Deduct: Net increase (decrease) in gas in storage 2,177 (2,383) (206) Extracted natural gas liquids (equivalent gas volumes) 2,610 6,271 8,881 System use and unaccounted for 211 1,589 3,615 336 5,751 Total 58,532 361,371 45,488 15,215 (62,875) 417,731 Gas Sales (MMcf): Residential 31,336 31,336 Commercial 10,173 10,173 Industrial and Utility 3,979 6,289 (5,793) 4,475 Production 58,058 (3,696) 54,362 Marketing 474 361,371 8,952 (53,412) 317,385 Total Gas Sales 58,532 361,371 45,488 15,241 (62,901) 417,731 Processed Gas Extracted (26) 26 Total 58,532 361,371 45,488 15,215 (62,875) 417,731 Natural Gas Transported (MMcf) 98,638 9,148 117,403 (93,820) 131,369 Oil Produced and Sold (thousands of bls) 2,032 2,032 Natural Gas Liquids Sold (thousands of gallons) 52,140 196,181 248,321 Average Selling Price: Residential Gas Sales (per Mcf) $8.686 Commercial Gas Sales 6.839 Industrial and Utility Gas Sales 3.766 $4.430 Produced Natural Gas $ 2.227 Marketed Natural Gas 1.873 $2.210 2.576 Oil (per barrel) 14.169 Natural Gas Liquids (per gallon) .292 .262
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES Information by Business Segment (Thousands) Three Months Ended Six Months Ended Twelve Months Ended June 30, June 30, June 30, 1995 1994 1995 1994 1995 1994 (Thousands) Operating Revenues: Exploration and production $ 44,099 $ 43,402 $ 90,443 $ 95,538 $ 190,700 $ 202,390 Natural gas marketing 227,236 225,897 438,241 459,823 869,196 860,761 Natural gas distribution 63,656 59,801 225,937 239,474 376,938 377,558 Natural gas transmission 24,985 25,874 56,630 62,352 111,047 140,804 Sales between segments (43,442) (38,852) (90,026) (101,527) (185,036) (208,660) Total $316,534 $316,122 $721,225 $755,660 $1,362,845 $1,372,853 Operating Income (Loss): Exploration and production $ (2,611) $ 4,209 $ (880) $ 15,563 $ 14,400 $ 37,923 Natural gas marketing 1,732 240 3,979 1,697 6,371 10,684 Natural gas distribution 234 (273) 33,021 36,489 39,712 45,564 Natural gas transmission 5,677 5,878 17,224 17,284 32,076 38,032 Total $ 5,032 $ 10,054 $ 53,344 $ 71,033 $ 92,559 $ 132,203 Capital Expenditures: Exploration and production $ 14,022 $ 23,804 $ 30,406 $ 37,588 $ 77,278 $ 105,218 Natural gas marketing 2,573 1,507 5,900 2,612 19,053 6,182 Natural gas distribution 6,185 7,614 15,707 13,589 34,830 27,944 Natural gas transmission 1,486 3,045 2,977 6,717 9,497 16,011 Total $ 24,266 $ 35,970 $ 54,990 $ 60,506 $ 140,658 $ 155,355
Management's Discussion and Analysis of Financial Condition and Results of Operations OVERVIEW Consolidated net loss for the quarter ended June 30, 1995 was $1.2 million or $.03 per share, compared with income of $6.1 million or $.18 per share for the quarter ended June 30, 1994. The decrease in income is due to a 26 percent decline in average wellhead gas prices, higher interest expense and increased depreciation and depletion expense which were partially offset by higher production of natural gas and oil, improved operating results from intrastate pipeline operations and higher oil prices. Consolidated net income for the six months ended June 30, 1995 was $26.6 million or $.77 per share, compared with $42.4 million or $1.23 per share for the six months ended June 30, 1994. The decrease in income is due to a 32 percent decline in average wellhead gas prices and lower retail gas sales reflecting warmer weather, partially offset by an 18 percent increase in natural gas production. Consolidated net income for the twelve months ended June 30, 1995 was $44.9 million or $1.30 per share, compared with $76.2 million or $2.26 per share for the twelve months ended June 30, 1994. The decrease in income is due primarily to a 28 percent decline in average wellhead gas prices, lower margins from natural gas marketing, and lower retail utility gas sales reflecting 13 percent warmer weather. The impact of these items was partially offset by a 17 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, of $44.1 million for the quarter ended June 30, 1995 were substantially the same as the $43.4 million for the quarter ended June 30, 1994. Increased production of natural gas, oil and natural gas liquids, and higher oil prices were offset by a 26 percent decline in average wellhead gas prices. Operating revenues for the six months ended June 30, 1995 were $90.4 million compared with $95.5 million for the six months ended June 30, 1994. Operating revenues for the twelve months ended June 30, 1995 were $190.7 million compared with $202.4 million for the twelve months ended June 30, 1994. The decrease in revenues for the six-month and twelve-month periods is due primarily to lower wellhead prices for natural gas which were partially offset by increased production of natural gas, higher oil prices and increased production and prices for natural gas liquids.
Three Months Ended Six Months Ended Twelve Months Ended June 30, June 30, June 30, Exploration and Production 1995 1994 1995 1994 1995 1994 Operating Revenues (thousands): Natural Gas $26,024 $28,381 $53,852 $66,887 $108,775 $129,306 Oil 8,635 6,884 16,942 13,091 33,090 28,791 Natural Gas Liquids 5,278 3,607 10,530 5,906 19,868 15,220 Contract Drilling 2,857 3,062 5,703 6,536 14,594 15,160 Direct Billing Settlements - - - - 7,815 7,815 Other 1,305 1,468 3,416 3,118 6,558 6,098 Total Revenues $44,099 $43,402 $90,443 $95,538 $190,700 $202,390 Sales Quantities: Natural Gas (MMcf) 17,564 14,151 34,826 29,434 67,899 58,058 Oil (MBls) 500 477 1,011 987 2,010 2,032 Natural Gas Liquids (thousands of gallons) 16,087 12,869 31,134 21,311 60,855 52,140
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) Gas purchased of $2.6 million for the quarter ended June 30, 1995 and $5.4 million for the six months ended June 30, 1995 was substantially the same as the 1994 amounts of $2.9 million and $5.6 million, respectively. Gas purchased for the twelve months ended June 30, 1995 amounted to $10.3 million compared with $13.9 million for the twelve months ended June 30, 1994. The decrease in gas purchased for the twelve month period is due to lower prices offset by higher requirements reflecting increased production of natural gas liquids. Other operating expenses were $44.1 million for the quarter ended June 30, 1995 compared with $36.3 million for the quarter ended June 30, 1994. Other operating expenses for the six months ended June 30, 1995 were $85.9 million compared with $74.3 million for the six months ended June 30, 1994. Other operating expenses for the twelve months ended June 30, 1995 were $166.0 million compared with $150.6 million for the twelve months ended June 30, 1994. Increases for the current periods are attributed to increased depreciation and depletion related to the higher level of natural gas production and higher depletion rates. Operating results for the quarter ended June 30, 1995 were a loss of $2.6 million compared with income of $4.2 million for the quarter ended June 30, 1994. Operating results for the six months ended June 30, 1995 were a loss of $.9 million compared with income of $15.6 million for the six months ended June 30, 1994. Operating income for the twelve months ended June 30, 1995 was $14.4 million compared with $37.9 million for the twelve months ended June 30, 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 six months of 1995. Prices for oil and natural gas liquids rebounded during the first six months 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 5 to 10 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 $227.2 million for the quarter ended June 30, 1995 compared with $225.9 million for the quarter ended June 30, 1994. The increase in revenues is due to a 27 percent increase in marketed gas volumes substantially offset by a 21 percent decrease in the average price of marketed gas. Operating revenues for the six months ended June 30, 1995 were $438.2 million compared with $459.8 million for the six months ended June 30, 1994. The decrease in revenues is due to a 27 percent decline in the average price of marketed gas which was partially offset by a 30 percent increase in marketed gas volumes and higher production and prices for natural gas liquids. Operating revenues for the twelve months ended June 30, 1995 were $869.2 million compared with $860.8 million for the twelve months ended June 30, 1994. A 35 percent increase in marketed gas sales and higher prices for natural gas liquids were partially offset by a 25 percent decline in the average price of marketed natural gas. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Three Months Ended Six Months Ended Twelve Months Ended June 30, June 30, June 30, Natural Gas Marketing 1995 1994 1995 1994 1995 1994 Operating Revenues (thousands): Natural Gas Marketing $210,787 $210,442 $406,542 $431,697 $804,927 $798,700 Natural Gas Liquids 13,806 13,035 26,690 23,776 54,027 51,352 Transportation 2,417 2,357 4,710 4,244 9,732 10,491 Other 226 63 299 106 510 218 Total Revenues $227,236 $225,897 $438,241 $459,823 $869,196 $860,761 Sales Quantities: Marketed Natural Gas (MMcf) 133,058 104,363 255,283 196,805 488,129 361,371 Natural Gas Liquids (thousands of gallons) 49,791 51,509 98,024 94,963 197,554 196,181
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) Gas purchased of $218.1 million for the quarter ended June 30, 1995 was substantially the same as the $218.5 million for the quarter ended June 30, 1994. An increase in purchase volumes was offset by lower prices. Gas purchased for the six months ended June 30, 1995 amounted to $419.3 million compared with $443.9 million for the six months ended June 30, 1994. The decrease reflects lower prices for purchased gas partially offset by higher volume of marketed gas and higher requirements for liquids production. Gas purchased for the twelve months ended June 30, 1995 was $832.8 million compared with $825.9 million for the twelve months ended June 30, 1994. The increase reflects the higher volume of marketed natural gas partially offset by lower prices for purchased gas. Other operating expenses of $7.4 million for the quarter ended June 30, 1995 and $14.9 million for the six months ended June 30, 1995 were substantially the same as the 1994 amounts of $7.2 million and $14.2 million, respectively. Other operating expenses for the twelve months ended June 30, 1995 were $30.0 million compared with $24.2 million for the twelve months ended June 30, 1994. Operating income was $1.7 million for the quarter ended June 30, 1995 compared with $.2 million for the quarter ended June 30, 1994. Operating income for the six months ended June 30, 1995 was $4.0 million compared with $1.7 million for the six months ended June 30, 1994. The increase in operating income for the three-month and six-month periods reflects higher margins for liquids processing. Operating income for the twelve months ended June 30, 1995 was $6.4 million compared with $10.7 million for the twelve months ended June 30, 1994. The decrease for the twelve months is due to lower margins for marketed gas sales. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) 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 $63.6 million for the quarter ended June 30, 1995 compared with $59.8 million for the quarter ended June 30, 1994. The increase in revenues is due primarily to increased industrial and utility gas sales partially offset by the effect of commercial customers moving from gas sales to transportation service. Operating revenues for the six months ended June 30, 1995 were $225.9 million compared with $239.5 million for the six months ended June 30, 1994. The decrease in revenues is due to lower retail gas sales reflecting warmer weather and the effect of commercial customers moving from gas sales to transportation service. Operating revenues for the twelve months ended June 30, 1995 were $376.9 million compared with $377.6 million for the twelve months ended June 30, 1994. Increased sales to utilities and higher transportation revenues were offset by lower retail gas sales reflecting 13 percent warmer weather and the effect of commercial customers moving from gas sales to transportation service. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Three Months Ended Six Months Ended Twelve Months Ended June 30, June 30, June 30, Natural Gas Distribution 1995 1994 1995 1994 1995 1994 Operating Revenues (thousands): Residential Gas Sales $39,303 $40,145 $162,110 $169,875 $257,591 $272,182 Commercial Gas Sales 5,372 10,915 22,206 45,916 43,246 69,575 Industrial and Utility Gas Sales 11,929 5,111 16,954 11,028 37,779 14,984 Transportation Service 5,660 2,468 21,952 10,182 33,520 16,366 Other 1,392 1,162 2,715 2,473 4,802 4,451 Total Revenues $63,656 $59,801 $225,937 $239,474 $376,938 $377,558 Sales Quantities (MMcf): Residential Gas Sales 4,070 4,310 17,484 19,767 27,287 31,336 Commercial Gas Sales 581 1,733 2,359 6,916 5,124 10,173 Industrial and Utility Gas Sales 6,190 1,689 8,858 3,073 18,640 3,979 Transportation Deliveries 3,126 1,786 9,435 4,908 13,138 9,148 Heating Degree Days 655 644 3,451 3,826 5,232 6,033
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) Gas purchased amounted to $38.0 million for the quarter ended June 30, 1995 compared with $33.4 million for the quarter ended June 30, 1994. The increase in gas costs is due primarily to higher industrial and utility gas sales and the pass-through of higher costs in rates to retail customers. Gas purchased for the six months ended June 30, 1995 amounted to $134.7 million compared with $141.1 million for the six months ended June 30, 1994. The decrease in gas costs is due to lower retail gas sales partially offset by increased industrial and utility gas sales and the pass-through of higher costs in rates to retail customers. Gas purchased for the twelve months ended June 30, 1995 was $226.5 million compared with $217.7 million for the twelve months ended June 30, 1994. The increase in gas costs reflects the pass-through of higher costs in rates to retail customers and the increase in sales to industrial and utility customers partially offset by lower retail gas sales. Other operating expenses were $25.4 million for the quarter ended June 30, 1995 compared with $26.7 million for the quarter ended June 30, 1994. Other operating expenses were $58.2 million for the six months ended June 30, 1995 compared with $61.9 million for the six months ended June 30, 1994. Other operating expenses were $110.7 million for the twelve months ended June 30, 1995 compared with $114.3 million for the twelve months ended June 30, 1994. The decrease in operating expenses for the six-month and twelve-month periods is due primarily to lower gross receipts tax reflecting the decrease in retail revenues. Operating income was $.2 million for the quarter ended June 30, 1995 compared with a loss of $.3 million for the quarter ended June 30, 1994. The increase in operating income is due primarily to higher industrial and utility gas sales and lower operating expenses. Operating income was $33.0 million for the six months ended June 30, 1995 compared with $36.5 million for the six months ended June 30, 1994. Operating income for the twelve months ended June 30, 1995 was $39.7 million compared with $45.6 million for the twelve months ended June 30, 1994. The decrease in operating income for the six and twelve month periods is due primarily to lower retail gas sales reflecting warmer weather. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) 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 $25.0 million for the quarter ended June 30, 1995 compared with $25.9 million for the quarter ended June 30, 1994. Operating revenues for the six months ended June 30, 1995 amounted to $56.6 million compared with $62.4 million for the six months ended June 30, 1994. The decrease in revenues for the three-month and six-month periods is due to lower selling prices for marketed natural gas. Operating revenues for the twelve months ended June 30, 1995 were $111.0 million compared with $140.8 million for the twelve months ended June 30, 1994. The decrease in revenues reflects the effects of discontinuing merchant sales of gas as a result of FERC Order 636 restructuring and lower selling prices for marketed natural gas. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued)
Three Months Ended Six Months Ended Twelve Months Ended June 30, June 30, June 30, Natural Gas Transmission 1995 1994 1995 1994 1995 1994 Operating Revenues (thousands): Industrial and Utility Gas Sales $ 363 $ 370 $ 726 $ 1,713 $ 1,322 $ 27,862 Marketed Gas Sales 3,791 4,463 8,036 12,864 16,416 23,064 Transportation Service 14,950 15,022 35,799 36,370 69,387 68,831 Storage Service 4,352 4,361 8,743 8,294 17,442 14,867 Other 1,529 1,658 3,326 3,111 6,480 6,180 Total Revenues $24,985 $25,874 $56,630 $62,352 $111,047 $140,804 Sales Quantities (MMcf): Industrial and Utility Gas Sales - 97 1 386 3 6,289 Marketed Gas Sales 1,958 1,919 4,006 4,900 8,237 8,952 Transportation Deliveries 27,765 28,806 58,194 64,137 117,529 117,403
Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) Gas purchased amounted to $2.8 million for the quarter ended June 30, 1995 compared with $4.2 million for the quarter ended June 30, 1994. Gas purchased for the six months ended June 30, 1995 amounted to $6.1 million compared with $11.6 million for the six months ended June 30, 1994. The decrease in gas costs for the three-month and six-month periods is due to lower prices for gas purchased for marketing. Gas purchased for the twelve months ended June 30, 1995 was $12.6 million compared with $34.8 million for the twelve months ended June 30, 1994. The decrease in gas costs reflects the elimination of pipeline gas sales pursuant to FERC Order 636 restructuring and lower prices for gas purchased for marketing. Other operating expenses of $16.6 million for the quarter ended June 30, 1995, $33.4 million for the six months ended June 30, 1995 and $66.4 million for the twelve months ended June 30, 1995 were substantially the same as the 1994 amounts of $15.8 million, $33.4 million and $67.9 million, respectively. Operating income of $5.7 million for the quarter ended June 30, 1995 and $17.1 million for the six months ended June 30, 1995 were substantially the same as the 1994 amounts of $5.9 million and $17.3 million, respectively. Operating income for the twelve months ended June 30, 1995 amounted to $32.0 million compared with $38.1 million for the twelve months ended June 30,1994. The decrease in income is due to income generated in the 1994 period as a result of FERC Order 636 restructuring. 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 six months ended June 30, 1995 were $55.0 million. Management's Discussion and Analysis of Financial Condition and Results of Operations (Continued) 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 June 30, 1995, $223.0 million of commercial paper and $1.1 million of bank loans were outstanding at an average interest rate of 6.0 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 by the bankruptcy court, 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. In June 1995, the Company offered for sale all of its gas and oil properties in the Northern Appalachian Basin areas of New York, Pennsylvania and West Virginia. The properties comprise less than 4 percent of the exploration and production segment's total gas and oil production and reserves. The Company operates the majority of these properties, with its working interest averaging approximately 25 percent. 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 June 30, 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/ Dan C. Eaton ------------------------------------- Dan C. Eaton Vice President - Strategic & Financial Planning Date: August 11, 1995 EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 3-MOS DEC-31-1995 JUN-30-1995 8,139 0 196,415 12,708 19,396 270,908 2,284,962 694,479 1,982,050 418,860 415,195 212,663 0 0 546,406 1,982,050 316,534 316,534 0 311,502 0 1,469 12,678 (7,199) (6,037) (1,162) 0 0 0 (1,162) (.03) (.03)