-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DjZGeYm7u6w3J+wr/RJX1+ie6aqpWgFizRhD6n1bLEk8+Y2/BL7vkpGoZhkFxC+J cUrbMPd84HILv9izRDlbKg== 0000033213-95-000012.txt : 19951201 0000033213-95-000012.hdr.sgml : 19951201 ACCESSION NUMBER: 0000033213-95-000012 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951114 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: 95592442 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 SEPT 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 SEPTEMBER 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 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 September 30, 1995 Common stock, no par value 34,980,707 shares EQUITABLE RESOURCES, INC. AND SUBSIDIARIES Index Page No. PART I. FINANCIAL STATEMENTS: Statements of Consolidated Income for the Three Months Ended September 30, 1995 and 1994, the Nine Months Ended September 30, 1995 and 1994 and the Twelve Months Ended September 30, 1995 and 1994 1 Statements of Consolidated Cash Flows for the Three Months Ended September 30, 1995 and 1994, the Nine Months Ended September 30, 1995 and 1994, and the Twelve Months Ended September 30, 1995 and 1994 2 Consolidated Balance Sheets, September 30, 1995 and 1994 and December 31, 1994 3 - 4 Long-Term Debt, September 30, 1995 and 1994 5 Notes to Consolidated Financial Statements 6 Gas Produced, Purchased and Sold 7 - 12 Information by Business Segment 13 Management's Discussion and Analysis of Financial Condition and Results of Operations 14 - 21 PART II. OTHER INFORMATION 22 SIGNATURE 23
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES Statements of Consolidated Income (Thousands Except Per Share Amounts) Three Months Ended Nine Months Ended Twelve Months Ended September 30, September 30, September 30, 1995 1994 1995 1994 1995 1994 Operating Revenues........... $ 270,992 $297,712 $ 992,217 $ 1,053,372 $ 1,336,125 $ 1,397,820 Cost of Gas Purchased ....... 171,604 200,089 648,882 703,066 872,721 920,217 --------- -------- ----------- ----------- ----------- ----------- Net operating revenues.... 99,388 97,623 343,335 350,306 463,404 477,603 --------- -------- ----------- ----------- ----------- ----------- Operating Expenses: Operation ................ 45,369 46,983 143,303 143,115 192,987 192,345 Maintenance .............. 6,443 8,327 19,644 23,174 28,207 31,590 Depreciation and depletion 26,726 23,265 84,151 68,593 108,905 90,286 Taxes other than income .. 6,392 6,201 28,435 31,544 39,135 43,119 --------- -------- ----------- ----------- ----------- ----------- Total operating expenses 84,930 84,776 275,533 266,426 369,234 357,340 --------- -------- ----------- ----------- ----------- ----------- Operating Income ............ 14,458 12,847 67,802 83,880 94,170 120,263 Other Income ................. (1,427) 810 (1,591) 1,318 254 2,761 Interest Charges ............ 12,674 11,387 38,218 32,316 49,807 42,536 --------- -------- ----------- ----------- ----------- ----------- Income Before Income Taxes .. 357 2,270 27,993 52,882 44,617 80,488 Income Taxes (Benefits) ..... (1,327) (111) (283) 8,085 409 10,474 --------- -------- ----------- ----------- ----------- ----------- Net Income ................ $ 1,684 $ 2,381 $ 28,276 $ 44,797 $ 44,208 $ 70,014 ========= ======== =========== =========== =========== =========== Average Common Shares Outstanding........ 34,846 34,526 34,733 34,503 34,686 34,492 ====== ====== ====== ====== ====== ====== Earnings Per Share of Common Stock............... $.05 $.07 $.81 $1.30 $1.27 $2.03 ==== ==== ==== ===== ===== ===== Dividends Per Share of Common Stock............... $.29 $.28 $.88 $.85 $1.18 $1.14 ==== ==== ==== ==== ===== =====
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES Statements of Consolidated Cash Flows (Thousands) Three Months Ended Nine Months Ended Twelve Months Ended September 30, September 30, September 30, 1995 1994 1995 1994 1995 1994 Cash Flows from Operating Activities: Net income............................... $ 1,684 $ 2,381 $ 28,276 $ 44,797 $ 44,208 $ 70,014 -------- -------- --------- -------- --------- -------- Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and depletion............ 26,726 23,265 84,151 68,593 108,905 90,286 Deferred income taxes (benefits)...... 6,560 5,826 (7,637) 1,902 (14,598) (4,444) Other - net........................... (2,577) (1,893) (341) 1,462 (237) 2,773 Changes in other assets and liabilities: Accounts receivable and unbilled revenues 30,019 28,277 29,758 32,743 (2,262) (13,357) Gas stored underground.............. (5,668) (7,666) 1,879 2,848 1,989 13,236 Material and supplies............... (2,224) 1,324 (1,190) (1,244) (561) (2,493) Deferred purchased gas cost......... (13,958) (16,726) 12,571 (14,358) 19,187 (10,545) Prepaid expenses and other.......... (13,406) (7,133) (18,865) (6,794) (21,663) 4,308 Regulatory assets................... 109 (290) (1,319) (2,877) 195 (11,951) Accounts payable.................... (6,696) (23,997) (14,664) (30,793) (4,285) (20,377) Accrued taxes....................... (3,605) (7,822) (9,141) (5,772) 861 (2,812) Refunds due customers............... (5,656) 3,139 (6,704) 7,103 (5,758) 7,955 Customer credit balances............ 7,692 4,458 (690) (1,781) 3,940 (1,703) Other - net......................... (1,519) (690) 7,040 7,637 4,872 11,160 -------- -------- --------- -------- --------- -------- Total adjustments................... 15,797 72 74,848 58,669 90,585 62,036 -------- -------- --------- -------- --------- -------- Net cash provided by operating activities...................... 17,481 2,453 103,124 103,466 134,793 132,050 -------- -------- --------- -------- --------- -------- Cash Flows from Investing Activities: Capital expenditures..................... (26,954) (40,070) (81,944) (100,576) (127,542) (134,327) Proceeds from sale of property........... 3,468 290 4,221 805 4,611 1,147 -------- -------- --------- -------- --------- -------- Net cash used in investing activities (23,486) (39,780) (77,723) (99,771) (122,931) (133,180) --------- --------- --------- -------- --------- -------- Cash Flows from Financing Activities: Issuance of common stock................. 536 425 1,738 1,299 2,230 1,362 Purchase of treasury stock............... (7) 0 (81) 0 (476) (10) Dividends paid........................... (10,312) (9,839) (30,774) (29,501) (40,959) (39,323) Proceeds from issuance of long-term debt. 0 0 17,878 43,185 17,776 43,112 Repayments and retirements of long-term debt (14,500) 0 (14,500) (1,971) (14,500) (1,971) Increase (decrease) in short-term loans.. 51,878 50,100 6,652 (15,900) 37,952 5,500 -------- -------- --------- -------- --------- -------- Net cash provided (used) by financing activities............ 27,595 40,686 (19,087) (2,888) 2,023 8,670 -------- -------- --------- -------- --------- -------- Increase in cash and cash equivalents....... 21,590 3,359 6,314 807 13,885 7,540 Cash and cash equivalents at beginning of period 8,139 12,485 23,415 15,037 15,844 8,304 -------- --------- -------- --------- -------- -------- Cash and cash equivalents at end of period.. $ 29,729 $ 15,844 $ 29,729 $ 15,844 $ 29,729 $ 15,844 ======== ======== ========= ======== ========= ======== Cash paid during the period for: Interest (net of amount capitalized)..... $ 7,601 $ 12,287 $ 36,979 $ 30,980 $ 46,104 $ 37,764 ======== ======== ========= ======== ========= ======== Income taxes............................. $ 4,725 $ 2,952 $ 12,266 $ 9,463 $ 15,350 $ 14,215 ======== ======== ========= ======== ========= ========
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES Consolidated Balance Sheets (Thousands) September 30, December 31, 1995 1994 1994 ASSETS Property, Plant and Equipment: Exploration and production (successful efforts method).. $ 1,012,384 $ 962,272 $ 983,328 Natural gas marketing................................... 321,576 302,302 309,579 Natural gas distribution................................ 576,716 543,088 552,789 Natural gas transmission................................ 391,047 386,120 387,921 ------------- ------------ ------------- Total.............................................. 2,301,723 2,193,782 2,233,617 Less accumulated depreciation and depletion .......... 719,190 621,312 637,951 ------------- ------------ ------------- Net property, plant and equipment.................. 1,582,533 1,572,470 1,595,666 ------------- ------------ ------------- Current Assets: Cash and cash equivalents............................... 29,729 15,844 23,415 Accounts receivable (less accumulated provision for doubtful accounts: September 30, 1995 $9,912; 1994 $10,986; December 31, 1994, $10,890)........................... 163,486 159,110 172,178 Unbilled revenues ...................................... 5,706 6,746 25,794 Gas stored underground - current inventory ............. 13,222 15,211 15,101 Material and supplies .................................. 14,066 13,505 12,876 Deferred purchased gas cost ............................ 12,319 31,506 24,890 Prepaid expenses and other ............................. 52,434 30,771 33,569 ------------- ------------ ------------- Total current assets............................... 290,962 272,693 307,823 ------------- ------------ ------------- Other Assets: Regulatory assets ...................................... 89,706 89,901 88,387 Other................................................... 46,857 27,604 27,246 ------------- ------------ ------------- Total other assets ................................... 136,563 117,505 115,633 ------------- ------------ ------------- Total.............................................. $ 2,010,058 $ 1,962,668 $ 2,019,122 ============= ============ =============
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES Consolidated Balance Sheets (Thousands) September 30, December 31, 1995 1994 1994 CAPITALIZATION AND LIABILITIES Capitalization: Common stockholders' equity: Common stock, no par value, authorized 80,000 shares; shares issued September 30, 1995, 35,383; September 30, 1994, 35,153; December 31, 1994, 35,173........................... $ 222,982 $ 224,437 $ 224,963 Retained earnings ..................................... 538,978 535,729 541,476 Treasury stock, shares at cost September 30, 1995, 402; September 30, 1994, 618; December 31, 1994, 632......................... (9,514) (14,538) (14,933) Foreign currency translation........................... (832) (807) (1,504) -------------- ------------- ------------- Total common stockholders' equity................. 751,614 744,821 750,002 Long-term debt........................................... 415,313 408,117 398,282 -------------- ------------- ------------- Total capitalization............................ 1,166,927 1,152,938 1,148,284 -------------- ------------- ------------- Current Liabilities: Long-term debt payable within one year................... 10,000 14,500 24,500 Short-term loans......................................... 275,952 238,000 269,300 Accounts payable......................................... 108,730 113,015 123,394 Accrued taxes............................................ 10,447 9,586 19,588 Accrued interest......................................... 11,991 11,360 13,032 Refunds due customers.................................... 15,551 21,309 22,255 Deferred income taxes.................................... 2,391 6,245 4,444 Customer credit balances................................. 9,737 5,797 10,427 Other.................................................... 12,759 12,936 11,955 -------------- ------------- ------------- Total current liabilities....................... 457,558 432,748 498,895 -------------- ------------- ------------- Deferred and Other Credits: Deferred income taxes.................................... 334,774 329,159 326,597 Deferred investment tax credits.......................... 21,266 22,363 22,082 Other.................................................... 29,533 25,460 23,264 -------------- ------------- ------------- Total deferred and other credits................ 385,573 376,982 371,943 -------------- ------------- ------------- Total........................................ $ 2,010,058 $ 1,962,668 $ 2,019,122 ============== ============= =============
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES Long-Term Debt (Thousands) Annual Maturities Debt Maturities After One Year September 30, September 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) (b)...... 71,103 70,266 9 1/2% Convertible subordinated debentures, due January 15, 2006.............. 710 2,351 9.9% Debentures, due April 15, 2013 (c)............... 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..... 10,000 14,500 75,500 85,500 6.8% to 7.6% Series C, due 2007 thru 2018..... 18,000 -------- -------- ---------- ---------- Total....................................... $ 10,000 $ 14,500 $ 415,313 $ 408,117 ======== ======== ========== ========== (a) The 8 1/4% Debentures will be retired using proceeds from issuance of the remaining Medium-Term Notes--Series C. (b) Not redeemable prior to maturity. (c) 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 September 30, 1995 and 1994 and the results of operations for the three, nine and twelve months then ended and cash flows for the three, nine and twelve months then ended. All of the adjustments are of a normal recurring nature. C. The results of operations for the three- and nine-month periods ended September 30, 1995 and 1994 are not indicative of results for a full year because of the seasonal nature of the Company's operations. D. In September 1995 and 1994, the Pennsylvania Public Utility Commission (PUC) approved Equitable Gas Company's collection of $18.8 million and $7.8 million, respectively, related to the direct billing settlement with Kentucky West Virginia Gas Company, an affiliate, for the recovery of higher NGPA prices on natural gas produced between 1978 and 1983 as approved by the Federal Energy Regulatory Commission in 1989. The 1995 amount includes $11.0 million for accelerated collection of amounts that would have otherwise been approved by the PUC, and recognized in income, in later years. As a result of the PUC approvals, net income for the periods ended September 30, 1995 and 1994 includes approximately $11.1 milion and $4.7 million, respectively, related to the settlement. Approximately $18 million from the settlement remains to be recovered in future gas cost filings with the PUC over the next three years. E. At September 30, 1995, 2,652,000 shares of Common Stock were reserved as follows: 65,000 shares for conversion of the 9 1/2% Convertible Subordinated Debentures, 631,000 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 154,000 shares for issuance under the Company's Dividend Reinvestment and Stock Purchase Plan. F. 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. As of September 30, 1995, $18 million of Medium-Term Notes--Series C have been issued. Proceeds from issuance of the remaining amount available under the shelf registration will be used to retire the 8 1/4% Debentures due July 1, 1996. G. In July 1995, the Company acquired all of the outstanding stock of Independent Energy Corporation (IEC) in exchange for 232,564 shares of the Company's common stock. The Company used shares held in treasury for the acquisition which is being accounted for as a pooling of interests. IEC is engaged in the development, construction, operation and ownership of private power and cogeneration projects.
THREE MONTHS ENDED SEPTEMBER 30, 1995 Exploration Natural Gas Natural Gas Natural Gas Intersegment and Production Marketing Distribution Transmission Eliminations Consolidated Gas Produced, Purchased and Sold (MMcf): Produced .................................... 14,102 43 592 14,737 ------ ------- ------ ------- ------- ------- Purchased: Other producers........................... 115,506 8,757 2,095 126,358 Inter-segment purchases .................. 728 11,606 2,390 (14,724) ------ ------- ------ ------- ------- Total purchases ....................... 728 127,112 11,147 2,095 (14,724) 126,358 ------ ------- ------ ------- ------- ------- Total produced and purchased ........ 14,830 127,112 11,190 2,687 (14,724) 141,095 Deduct: Net increase (decrease) in gas in storage. 3,233 (277) 2,956 Extracted natural gas liquids (equivalent gas volumes) .............. 448 1,678 2,126 System use and unaccounted for............ 138 407 2,020 (339) 2,226 ------ ------- ------ ------- ------- ------- Total................................ 14,244 125,027 5,937 3,303 (14,724) 133,787 ====== ======= ====== ======= ======= ======= Gas Sales (MMcf): Residential.................................. 1,904 1,904 Commercial................................... 397 397 Industrial and Utility....................... 3,636 2 (2,378) 1,260 Production................................... 14,102 (28) 14,074 Marketing.................................... 142 125,027 3,301 (12,318) 116,152 ------ ------- ------ ------- ------- ------- Total................................ 14,244 125,027 5,937 3,303 (14,724) 133,787 ====== ======= ====== ======= ======= ======= Natural Gas Transported (MMcf).................. 38,171 2,135 27,999 (19,869) 48,436 ======= ====== ======== ======= ======= Oil Produced and Sold (thousands of bls)........ 482 482 ====== ======= Natural Gas Liquids Sold (thousands of gallons) 16,199 51,011 67,210 ======= ====== ====== Average Selling Price: Residential Gas Sales (per Mcf)............. $ 11.239 Commercial Gas Sales........................ 9.023 Industrial and Utility Gas Sales............ 1.743 Produced Natural Gas........................ $ 1.432 Marketed Natural Gas........................ 1.155 $1.471 $1.768 Oil (per barrel)............................ 16.060 Natural Gas Liquids (per gallon)............ .294 .260
THREE MONTHS ENDED SEPTEMBER 30, 1994 Exploration Natural Gas Natural Gas Natural Gas Intersegment and Production Marketing Distribution Transmission Eliminations Consolidated Gas Produced, Purchased and Sold (MMcf): Produced .................................... 15,640 41 544 16,225 ------ ------- ------ -------- ------- ------- Purchased: Other producers........................... 106,161 12,371 1,678 120,210 Inter-segment purchases .................. 609 13,909 2,187 (1) (16,704) ------ ------- ------ -------- ------- Total purchases ....................... 609 120,070 14,558 1,677 (16,704) 120,210 ------ ------- ------ -------- ------- ------- Total produced and purchased ........ 16,249 120,070 14,599 2,221 (16,704) 136,435 Deduct: Net increase (decrease) in gas in storage. 3,365 (181) 3,184 Extracted natural gas liquids (equivalent gas volumes)............... 460 1,716 2,176 System use and unaccounted for............ 130 405 697 219 1,451 ------ ------- ------ -------- ------- ------- Total................................ 15,659 117,949 10,537 2,183 (16,704) 129,624 ====== ======= ====== ======== ======= ======= Gas Sales (MMcf): Residential.................................. 1,925 1,925 Commercial................................... 1,246 1,246 Industrial and Utility....................... 7,366 30 (3,068) 4,328 Production................................... 15,640 (1,292) 14,348 Marketing.................................... 19 117,949 2,153 (12,344) 107,777 ------ ------- ------ -------- ------- ------- Total................................ 15,659 117,949 10,537 2,183 (16,704) 129,624 ====== ======= ====== ======== ======= ======= Natural Gas Transported (MMcf).................. 29,965 1,163 36,335 (26,854) 40,609 ======= ====== ======== ======= ======= Oil Produced and Sold (thousands of bls)........ 493 493 ====== ======= Natural Gas Liquids Sold (thousands of gallons) 14,241 52,132 66,373 ====== ====== ======= Average Selling Price: Residential Gas Sales (per Mcf)............. $10.872 Commercial Gas Sales........................ 6.153 Industrial and Utility Gas Sales............ 2.120 $7.767 Produced Natural Gas........................ $ 1.710 Marketed Natural Gas........................ 1.789 $1.770 1.981 Oil (per barrel)............................ 16.604 Natural Gas Liquids (per gallon)............ .292 .262
NINE MONTHS ENDED SEPTEMBER 30, 1995 Exploration Natural Gas Natural Gas Natural Gas Intersegment and Production Marketing Distribution Transmission Eliminations Consolidated Gas Produced, Purchased and Sold (MMcf): Produced..................................... 48,928 105 1,684 50,717 ------ ------- ------ --------- ------- ------- Purchased: Other producers........................... 347,487 27,849 5,114 380,450 Inter-segment purchases................... 2,454 38,980 9,314 (50,748) ------ ------- ------ --------- ------- Total purchases........................ 2,454 386,467 37,163 5,114 (50,748) 380,450 ------ ------- ------ --------- ------- ------- Total produced and purchased ........ 51,382 386,467 37,268 6,798 (50,748) 431,167 Deduct: Net increase (decrease) in gas in storage. 340 (277) 63 Extracted natural gas liquids (equivalent gas volumes)............... 1,400 4,921 6,321 System use and unaccounted for............ 414 1,236 2,290 (235) 3,705 ------ ------- ------ --------- ------- ------- Total................................ 49,568 380,310 34,638 7,310 (50,748) 421,078 ====== ======= ====== ========= ======= ======= Gas Sales (MMcf): Residential.................................. 19,388 19,388 Commercial................................... 2,756 2,756 Industrial and Utility....................... 12,494 3 (6,087) 6,410 Production................................... 48,928 (336) 48,592 Marketing.................................... 640 380,310 7,307 (44,325) 343,932 ------ ------- ------ --------- ------- ------- Total................................ 49,568 380,310 34,638 7,310 (50,748) 421,078 ====== ======= ====== ========= ======= ======= Natural Gas Transported (MMcf).................. 95,693 11,570 86,193 (69,795) 123,661 ======= ====== ========= ======= ======= Oil Produced and Sold (thousands of bls)........ 1,493 1,493 ====== ======= Natural Gas Liquids Sold (thousands of gallons) 47,333 149,035 196,368 ======= ======= ======= Average Selling Price: Residential Gas Sales (per Mcf)............. $9.465 Commercial Gas Sales........................ 9.357 Industrial and Utility Gas Sales............ 1.864 Produced Natural Gas........................ $ 1.513 Marketed Natural Gas........................ 1.506 $1.553 $1.899 Oil (per barrel)............................ 16.532 Natural Gas Liquids (per gallon)............ .323 .268
NINE MONTHS ENDED SEPTEMBER 30, 1994 Exploration Natural Gas Natural Gas Natural Gas Intersegment and Production Marketing Distribution Transmission Eliminations Consolidated Gas Produced, Purchased and Sold (MMcf): Produced..................................... 45,074 103 1,419 46,596 ------ ------- ------ -------- ------- ------- Purchased: Other producers........................... 284,073 33,247 5,745 323,065 Inter-segment purchases................... 1,753 36,699 9,255 409 (48,116) ------ ------- ------ -------- ------- Total purchases........................ 1,753 320,772 42,502 6,154 (48,116) 323,065 ------ ------- ------ -------- ------- ------- Total produced and purchased ........ 46,827 320,772 42,605 7,573 (48,116) 369,661 Deduct: Net increase (decrease) in gas in storage. 226 (181) 45 Extracted natural gas liquids (equivalent gas volumes)............... 1,049 4,825 5,874 System use and unaccounted for............ 341 1,193 2,086 285 3,905 ------ ------- ------ -------- ------- ------- Total................................ 45,437 314,754 40,293 7,469 (48,116) 359,837 ====== ======= ====== ======== ======= ======= Gas Sales (MMcf): Residential.................................. 21,692 21,692 Commercial................................... 8,162 8,162 Industrial and Utility....................... 10,439 416 (3,433) 7,422 Production................................... 45,074 (4,982) 40,092 Marketing.................................... 363 314,754 7,053 (39,701) 282,469 ------ ------- ------ -------- ------- ------- Total................................ 45,437 314,754 40,293 7,469 (48,116) 359,837 ====== ======= ====== ======== ======= ======= Natural Gas Transported (MMcf).................. 77,944 6,071 100,472 (83,369) 101,118 ======= ====== ======== ======= ======= Oil Produced and Sold (thousands of bls)........ 1,480 1,480 ====== ======= Natural Gas Liquids Sold (thousands of gallons) 35,552 147,095 182,647 ======= ======= ======= Average Selling Price: Residential Gas Sales (per Mcf)............. $8.796 Commercial Gas Sales........................ 6.565 Industrial and Utility Gas Sales............ 2.552 $4.678 Produced Natural Gas........................ $ 2.077 Marketed Natural Gas........................ 1.876 $2.035 2.429 Oil (per barrel)............................ 14.376 Natural Gas Liquids (per gallon)............ .283 .254
TWELVE MONTHS ENDED SEPTEMBER 30, 1995 Exploration Natural Gas Natural Gas Natural Gas Intersegment and Production Marketing Distribution Transmission Eliminations Consolidated Gas Produced, Purchased and Sold (MMcf): Produced..................................... 66,361 145 2,136 68,642 ------- -------- ------- ------- -------- -------- Purchased: Other producers........................... 453,124 40,234 6,632 499,990 Inter-segment purchases................... 3,224 50,201 13,022 63 (66,510) ------- -------- ------- ------- -------- Total purchases........................ 3,224 503,325 53,256 6,695 (66,510) 499,990 ------- -------- ------- ------- -------- -------- Total produced and purchased......... 69,585 503,325 53,401 8,831 (66,510) 568,632 Deduct: Net increase (decrease) in gas in storage. 355 (277) 78 Extracted natural gas liquids (equivalent gas volumes)............... 1,897 6,473 8,370 System use and unaccounted for............ 553 1,645 6,595 (252) 8,541 ------- -------- ------- ------- -------- -------- Total................................ 67,135 495,207 46,451 9,360 (66,510) 551,643 ======= ======== ======= ======= ======== ======== Gas Sales (MMcf): Residential.................................. 27,266 27,266 Commercial................................... 4,275 4,275 Industrial and Utility....................... 14,910 (25) (6,230) 8,655 Production................................... 66,361 (2,591) 63,770 Marketing.................................... 774 495,207 9,385 (57,689) 447,677 ------- -------- ------- ------- -------- -------- Total................................ 67,135 495,207 46,451 9,360 (66,510) 551,643 ======= ======== ======= ======= ======== ======== Natural Gas Transported (MMcf).................. 121,475 14,110 109,193 (86,898) 157,880 ======== ======= ======= ======== ======== Oil Produced and Sold (thousands of bls)........ 1,999 1,999 ======= ======== Natural Gas Liquids Sold (thousands of gallons) 62,813 196,433 259,246 ======== ======== ======== Average Selling Price: Residential Gas Sales (per Mcf)............. $9.465 Commercial Gas Sales........................ 9.160 Industrial and Utility Gas Sales............ 1.912 Produced Natural Gas........................ $ 1.540 Marketed Natural Gas........................ 1.568 $1.575 $1.917 Oil (per barrel)............................ 16.331 Natural Gas Liquids (per gallon)............ .326 .273
TWELVE MONTHS ENDED SEPTEMBER 30, 1994 Exploration Natural Gas Natural Gas Natural Gas Intersegment and Production Marketing Distribution Transmission Eliminations Consolidated Gas Produced, Purchased and Sold (MMcf): Produced..................................... 59,892 140 2,090 62,122 ------- -------- ------- ------- -------- -------- Purchased: Other producers........................... 356,958 45,968 7,836 410,762 Inter-segment purchases................... 2,654 49,040 10,780 785 (63,259) ------- -------- ------- ------- -------- Total purchases........................ 2,654 405,998 56,748 8,621 (63,259) 410,762 ------- -------- ------- ------- -------- -------- Total produced and purchased......... 62,546 405,998 56,888 10,711 (63,259) 472,884 Deduct: Net increase (decrease) in gas in storage. (207) (79) (286) Extracted natural gas liquids (equivalent gas volumes)............... 1,841 7,987 9,828 System use and unaccounted for............ 341 1,994 3,950 226 6,511 ------- -------- ------- ------- -------- -------- Total................................ 60,364 396,017 53,145 10,564 (63,259) 456,831 ======= ======== ======= ======= ======== ======== Gas Sales (MMcf): Residential.................................. 31,156 31,156 Commercial................................... 10,986 10,986 Industrial and Utility....................... 11,003 714 (3,720) 7,997 Production................................... 59,892 (4,982) 54,910 Marketing.................................... 472 396,017 9,850 (54,557) 351,782 ------- -------- ------- ------- -------- -------- Total................................ 60,364 396,017 53,145 10,564 (63,259) 456,831 ======= ======== ======= ======= ======== ======== Natural Gas Transported (MMcf).................. 106,602 8,717 130,671 (113,836) 132,154 ======== ======= ======= ======== ======== Oil Produced and Sold (thousands of bls)........ 1,994 1,994 ======= ======== Natural Gas Liquids Sold (thousands of gallons) 50,812 198,797 249,609 ======= ======== ======== Average Selling Price: Residential Gas Sales (per Mcf)............. $8.740 Commercial Gas Sales........................ 6.705 Industrial and Utility Gas Sales............ 2.654 $3.178 Produced Natural Gas........................ $ 2.134 Marketed Natural Gas........................ 1.871 $2.080 2.402 Oil (per barrel)............................ 14.353 Natural Gas Liquids (per gallon)............ .287 .255
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES Information by Business Segment (Thousands) Three Months Ended Nine Months Ended Twelve Months Ended September 30, September 30, September 30, 1995 1994 1995 1994 1995 1994 (Thousands) OPERATING REVENUES: Exploration and production.. $ 57,080 $ 52,730 $ 147,523 $ 148,268 $ 195,050 $ 200,029 Natural gas marketing....... 200,399 225,355 638,640 685,178 844,240 884,540 Natural gas distribution.... 36,052 46,024 261,989 285,498 366,966 394,370 Natural gas transmission ... 25,660 25,321 82,290 87,673 111,386 120,233 Sales between segments ..... (48,199) (51,718) (138,225) (153,245) (181,517) (201,352) ---------- --------- --------- ---------- ---------- --------- Total.................. $ 270,992 $ 297,712 $ 992,217 $1,053,372 $1,336,125 $1,397,820 =========== ========= ========= ========== ========== ========= OPERATING INCOME (LOSS): Exploration and production.. $ 14,296 $ 10,906 $ 13,416 $ 26,469 $ 17,790 $ 33,573 Natural gas marketing ...... (74) 983 3,905 2,680 5,314 4,242 Natural gas distribution.... (6,192) (4,121) 26,829 32,368 37,641 47,374 Natural gas transmission ... 6,428 5,079 23,652 22,363 33,425 35,074 ---------- --------- --------- ---------- ---------- --------- Total.................. $ 14,458 $ 12,847 $ 67,802 $ 83,880 $ 94,170 $ 120,263 ========== ========= ========= ========== ========== ========= CAPITAL EXPENDITURES: Exploration and production.. $ 7,679 $ 27,020 $ 38,085 $ 64,426 $ 58,119 $ 85,400 Natural gas marketing....... 6,258 1,868 12,158 4,662 23,261 6,512 Natural gas distribution.... 10,590 8,935 26,297 22,524 36,485 29,654 Natural gas transmission.... 2,427 2,247 5,404 8,964 9,677 12,761 ---------- --------- --------- ---------- ---------- --------- Total.................. $ 26,954 $ 40,070 $ 81,944 $ 100,576 $ 127,542 $ 134,327 ========== ========= ========= ========== ========== ==========
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW Consolidated net income for the quarter ended September 30, 1995 was $1.7 million or $.05 per share, compared with $2.4 million or $.07 per share for the quarter ended September 30, 1994. Earnings for 1995 include $6.5 million or $.19 per share, resulting from the Pennsylvania Public Utility Commission's approval for accelerated collection of gas costs as described in Note D to the consolidated financial statements. The decrease in income, excluding the effect of the accelerated collection of gas costs, is due to a 16 percent decline in average wellhead gas prices, lower margins for natural gas marketing and lower earnings from distribution operations. Consolidated net income for the nine months ended September 30, 1995 was $28.3 million or $.81 per share, compared with $44.8 million or $1.30 per share for the nine months ended September 30, 1994. The decrease in income, excluding the effect of the accelerated collection of gas costs, is due to a 27 percent decline in average wellhead gas prices, lower margins from natural gas marketing and lower retail gas sales reflecting 10 percent warmer weather. The impact of these items was partially offset by a 9 percent increase in natural gas production. Consolidated net income for the twelve months ended September 30, 1995 was $44.2 million or $1.27 per share, compared with $70.0 million or $2.03 per share for the twelve months ended September 30, 1994. The decrease in income, excluding the effect of the accelerated collection of gas costs 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 an 11 percent increase in natural gas production. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) 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 $57.1 million for the quarter ended September 30, 1995 compared with $52.7 million for the quarter ended September 30, 1994. The 1995 period includes $11.0 million of additional revenue from direct bill settlements as described in Note D to the consolidated financial statements. The decrease in operating revenue, excluding the effect of the additional revenue from the direct bill settlements, is due primarily to a 16 percent decline in average wellhead gas prices and a 10 percent decline in natural gas production. Operating revenues for the nine months ended September 30, 1995 were $147.5 million compared with $148.3 million for the nine months ended September 30, 1994. Operating revenues for the twelve months ended September 30, 1995 were $195.1 million compared with $200.0 million for the twelve months ended September 30, 1994. The decrease in revenues for the nine-month and twelve-month periods, excluding the effect of the additional revenue from the direct bill settlements, is due primarily to lower wellhead prices for natural gas partially offset by increased production of natural gas, higher oil prices and increased production and prices for natural gas liquids. 3 MONTHS ENDED 9 MONTHS ENDED 12 MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, EXPLORATION AND PRODUCTION 1995 1994 1995 1994 1995 1994 OPERATING REVENUES (THOUSANDS): Natural Gas.......... $20,196 $26,748 $74,048 $93,635 $102,223 $127,829 Oil.................. 7,741 8,186 24,683 21,277 32,645 28,620 Natural Gas Liquids.. 4,765 4,158 15,295 10,064 20,475 14,600 Contract Drilling.... 4,272 4,509 9,975 11,045 14,357 15,089 Direct Billing Settlements 18,807 7,815 18,807 7,815 18,807 7,815 Other................ 1,299 1,314 4,715 4,432 6,543 6,076 ------- ------- ------- ------- -------- ------- Total Revenues..... $57,080 $52,730 $147,523 $148,268 $195,050 $200,029 ====== ====== ======= ======= ======= ======= SALES QUANTITIES: Natural Gas (MMcf)... 14,102 15,640 48,928 45,074 66,361 59,892 Oil (MBls)........... 482 493 1,493 1,480 1,999 1,994 Natural Gas Liquids . (thousands of gallons) 16,199 14,241 47,333 35,552 62,813 50,812 Gas purchased of $2.4 million for the quarter ended September 30, 1995 and $7.8 million for the nine months ended September 30, 1995 was substantially the same as the 1994 amounts of $2.3 million and $8.0 million, respectively. Gas purchased for the twelve months ended September 30, 1995 amounted to $10.4 million compared with $12.5 million for the twelve months ended September 30, 1994. The decrease in gas purchased for the twelve month period is due to lower prices partially offset by higher requirements reflecting increased production of natural gas liquids. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) Other operating expenses were $40.4 million for the quarter ended September 30, 1995 compared with $39.5 million for the quarter ended September 30, 1994. The increase for the quarter is due to increased depreciation and depletion reflecting higher depletion rates. Other operating expenses for the nine months ended September 30, 1995 were $126.3 million compared with $113.8 million for the nine months ended September 30, 1994. Other operating expenses for the twelve months ended September 30, 1995 were $166.9 million compared with $154.1 million for the twelve months ended September 30, 1994. Increases for the nine and twelve month periods are attributed to increased depreciation and depletion reflecting the higher level of natural gas production and higher depletion rates. Operating income was $14.3 million for the quarter ended September 30, 1995 compared with $10.9 million for the quarter ended September 30, 1994. Operating income for the nine months ended September 30, 1995 was $13.4 million compared with $26.5 million for the nine months ended September 30, 1994. Operating income for the twelve months ended September 30, 1995 was $17.8 million compared with $33.5 million for the twelve months ended September 30, 1994. The decrease in operating income for the current periods, excluding the effect of the additional revenue from the direct billing settlements, reflects lower wellhead prices for natural gas partially offset by increased gas production for the nine- and twelve-month periods. 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 $200.4 million for the quarter ended September 30, 1995 compared with $225.4 million for the quarter ended September 30, 1994. The decrease in revenues is due to a 17 percent decline in the average price of marketed gas which was partially offset by a 6 percent increase in marketed gas volumes. Operating revenues for the nine months ended September 30, 1995 were $638.6 million compared with $685.2 million for the nine months ended September 30, 1994. The decrease in revenues is due to a 24 percent decrease in the average price of marketed gas, partially offset by a 21 percent increase in marketed gas volumes and higher production and prices for natural gas liquids. Operating revenues for the twelve months ended September 30, 1995 were $844.2 million compared with $884.5 million for the twelve months ended September 30, 1994. A 24 percent decline in the average price of marketed gas and decreased production of natural gas liquids were partially offset by a 25 percent increase in marketed gas volumes and higher prices for natural gas liquids. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) 3 MONTHS ENDED 9 MONTHS ENDED 12 MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, NATURAL GAS MARKETING 1995 1994 1995 1994 1995 1994 OPERATING REVENUES (THOUSANDS): Natural Gas Marketing $183,923 $208,712 $590,465 $640,409 $780,138 $823,888 Natural Gas Liquids.. 13,263 13,655 39,953 37,431 53,635 50,786 Transportation....... 3,076 2,887 7,786 7,131 9,921 9,599 Other................ 137 101 436 207 546 267 ------- ------- ------- ------- ------- ------- Total Revenues..... $200,399 $225,355 $638,640 $685,178 $844,240 $884,540 ======= ======= ======= ======= ======= ======= SALES QUANTITIES: Marketed Natural Gas (MMcf) 125,027 117,949 380,310 314,754 495,207 396,017 Natural Gas Liquids (thousands of gallons) 51,011 52,132 149,035 147,095 196,433 198,797 Gas purchased was $191.9 million for the quarter ended September 30, 1995 compared with $216.9 million for the quarter ended September 30, 1994. The decrease in gas purchased reflects lower gas prices partially offset by an increase in purchased volumes. Gas purchased for the nine months ended September 30, 1995 amounted to $611.3 million compared with $660.8 million for the nine months ended September 30, 1994. Gas purchased for the twelve months ended September 30, 1995 was $807.9 million compared with $852.1 million for the twelve months ended September 30, 1994. The decrease in gas purchased for the nine- and twelve-month periods reflects lower prices for purchased gas partially offset by higher volumes of marketed gas and higher requirements for liquids production. Other operating expenses were $8.5 million for the quarter ended September 30, 1995 compared with $7.5 million for the quarter ended September 30, 1994. Other operating expenses were $23.4 million for the nine months ended September 30, 1995 compared with $21.7 million for the nine months ended September 30, 1994. Other operating expenses for the twelve months ended September 30, 1995 were $31.0 million compared with $28.2 million for the twelve months ended September 30, 1994. The increase for the current periods reflects marketing operations in Canada which began in October 1994 and marketing and administrative expenses associated with the gas storage service to begin in early 1996. Operating results for the quarter ended September 30, 1995 were a loss of $74,000 compared with income of $1.0 million for the quarter ended September 30, 1994. The decrease is due to lower margins for marketed gas sales. Operating income for the nine months ended September 30, 1995 was $3.9 million compared with $2.7 million for the nine months ended September 30, 1994. Operating income for the twelve months ended September 30, 1995 was $5.3 million compared with $4.2 million for the twelve months ended September 30, 1994. The increase in operating income for the nine- and twelve-month periods reflects higher margins from liquids processing, partially offset by 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 $36.1 million for the quarter ended September 30, 1995 compared with $46.0 million for the quarter ended September 30, 1994. The decrease in revenues is due primarily to a decrease in industrial sales, which was partially offset by an increase in utility sales which are at lower rates, and the effect of commercial customers switching from gas sales to transportation service. Operating revenues for the nine months ended September 30, 1995 were $262.0 million compared with $285.5 million for the nine months ended September 30, 1994. Operating revenues for the twelve months ended September 30, 1995 were $367.0 million compared with $394.4 million for the twelve months ended September 30, 1994. The decrease in revenues for the nine- and twelve-month periods is due to the effect of commercial customers switching from gas sales to transportation service, lower retail gas sales reflecting warmer weather and a change in the mix of industrial and utility gas sales. 3 MONTHS ENDED 9 MONTHS ENDED 12 MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, NATURAL GAS DISTRIBUTION 1995 1994 1995 1994 1995 1994 OPERATING REVENUES (THOUSANDS): Residential Gas Sales. $21,399 $20,928 $183,509 $190,803 $258,062 $272,298 Commercial Gas Sales.. 3,582 7,667 25,788 53,583 39,161 73,666 Industrial and Utility Gas Sales 6,339 15,615 23,293 26,643 28,503 29,201 Transportation Service 3,360 703 25,312 10,885 36,177 14,581 Other................. 1,372 1,111 4,087 3,584 5,063 4,624 ------ ------ ------ ------ ------ ------ Total Revenues...... $36,052 $46,024 $261,989 $285,498 $366,966 $394,370 ====== ====== ======= ======= ======= ======= SALES QUANTITIES (MMCF): Residential Gas Sales. 1,904 1,925 19,388 21,692 27,266 31,156 Commercial Gas Sales.. 397 1,246 2,756 8,162 4,275 10,986 Industrial and Utility Gas Sales 3,636 7,366 12,494 10,439 14,910 11,003 Transportation Deliveries 2,135 1,163 11,570 6,071 14,110 8,717 Heating Degree Days... 79 90 3,530 3,916 6,005 5,609 Gas purchased amounted to $18.9 million for the quarter ended September 30, 1995 compared with $28.0 million for the quarter ended September 30, 1994. Gas purchased for the nine months ended September 30, 1995 amounted to $153.5 million compared with $169.1 million for the nine months ended September 30, 1994. Gas purchased for the twelve months ended September 30, 1995 was $217.3 million compared with $232.9 million for the twelve months ended September 30, 1994. The decrease in gas costs for the current periods is due to lower gas sales, partially offset by the pass-through of higher costs in rates to retail customers. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) Other operating expenses of $23.4 million for the quarter ended September 30, 1995 were substantially the same as the $22.1 million for the quarter ended September 30, 1994. Other operating expenses were $81.7 million for the nine months ended September 30, 1995 compared with $84.0 million for the nine months ended September 30, 1994. Other operating expenses were $112.1 million for the twelve months ended September 30, 1995 compared with $114.1 million for the twelve months ended September 30, 1994. The decrease in operating expenses for the nine- and twelve- month periods is due primarily to lower gross receipts tax attributable to the decrease in retail revenues. Operating results for the quarter ended September 30, 1995 were a loss of $6.2 million compared with a loss of $4.1 million for the quarter ended September 30, 1994. Operating income was $26.8 million for the nine months ended September 30, 1995 compared with $32.4 million for the nine months ended September 30, 1994. Operating income for the twelve months ended September 30, 1995 was $37.6 million compared with $47.4 million for the twelve months ended September 30, 1994. The decrease in operating income for the current periods is due primarily to lower margins reflecting lower gas sales. 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, of $25.7 million for the quarter ended September 30, 1995 were substantially the same as the $25.3 million for the quarter ended September 30, 1994. Operating revenues for the nine months ended September 30, 1995 amounted to $82.3 million compared with $87.7 million for the nine months ended September 30, 1994. Operating revenues for the twelve months ended September 30, 1995 were $111.4 million compared with $120.2 million for the twelve months ended September 30, 1994. The decrease in revenues for the nine- and twelve-month periods is due primarily to lower selling prices for marketed natural gas. 3 MONTHS ENDED 9 MONTHS ENDED 12 MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, NATURAL GAS TRANSMISSION 1995 1994 1995 1994 1995 1994 OPERATING REVENUES (THOUSANDS): Industrial and Utility Gas Sales $ 363 $ 233 $ 1,089 $ 1,946 $ 1,452 $ 2,269 Marketed Gas Sales... 5,837 4,265 13,873 17,129 17,988 23,661 Transportation Service 14,197 14,864 49,996 51,234 68,720 71,872 Storage Service...... 3,581 4,360 12,324 12,654 16,663 16,215 Other................ 1,682 1,599 5,008 4,710 6,563 6,216 ------ ------ ------- ------ -------- ------- Total Revenues..... $25,660 $25,321 $82,290 $87,673 $111,386 $120,233 ====== ====== ====== ====== ======= ======= SALES QUANTITIES (MMCF): Industrial and Utility Gas Sales 2 30 3 416 (25) 714 Marketed Gas Sales... 3,301 2,153 7,307 7,053 9,385 9,850 Transportation Deliveries 27,999 36,335 86,193 100,472 109,193 130,671 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) Gas purchased amounted to $4.6 million for the quarter ended September 30, 1995 compared with $3.4 million for the quarter ended September 30, 1994. The increase in gas costs for the quarter is due to an increase in marketed gas sales. Gas purchased for the nine months ended September 30, 1995 amounted to $10.7 million compared with $15.0 million for the nine months ended September 30, 1994. Gas purchased for the twelve months ended September 30, 1995 was $13.9 million compared with $19.9 million for the twelve months ended September 30, 1994. The decrease in gas costs for the nine- and twelve-month periods reflects lower prices for marketed gas. Other operating expenses were $14.7 million for the quarter ended September 30, 1995 compared with $16.9 million for the quarter ended September 30, 1994. Other operating expenses were $48.1 million for the nine months ended September 30, 1995 compared with $50.3 million for the nine months ended September 30, 1994. Other operating expenses for the twelve months ended September 30, 1995 were $64.2 million compared with $65.2 million for the twelve months ended September 30, 1994. The decrease for the current periods is due to lower provisions for rate refunds reflecting final FERC approved rates that went into effect July 1, 1995. Operating income was $6.4 million for the quarter ended September 30, 1995 compared with $5.1 million for the quarter ended September 30,1994. Operating income was $23.5 million for the nine months ended September 30, 1995 compared with $22.4 million for the nine months ended September 30, 1994. Operating income increased for the three- and nine-month periods due to provisions made in the 1994 periods for rate refunds. Operating income for the twelve months ended September 30, 1995 amounted to $33.3 million compared with $35.1 million for the twelve months ended September 30, 1994. The decrease in income is due to lower marketed natural gas sales. 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. Capital expenditures for the nine months ended September 30, 1995 were $81.9 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. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) CAPITAL RESOURCES AND LIQUIDITY 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 September 30, 1995, $223.0 million of commercial paper and $53.0 million of bank loans were outstanding at an average interest rate of 5.9 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 also receive approximately $19 million related to direct billing settlements previously approved by the FERC. The expected after tax cash proceeds from these settlements is approximately $35 million. In October 1995, the Company sold 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. The Company has reached an agreement, subject to final terms and conditions at closing, for the sale of Appalachian gas properties which produce non-conventional fuels. The Company will retain an interest in the properties that will increase as certain financial targets are met. Anticipated proceeds to the Company, after taxes and fees, will be approximately $110 million. The proceeds to be received from the Columbia Gas bankruptcy settlement and the sales of properties described above will be used to restructure about $150 million of long- and short-term debt. A portion of the proceeds may be used to repurchase up to one million shares of the Company's outstanding stock. 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. The increase in prepaid expenses and other current assets reflects higher prepayment of federal income taxes. The Company is currently assessing the valuation of its long-lived assets using the methodology prescribed in Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of". It is the Company's intention to complete this study and record any writedown of assets in the fourth quarter of 1995. PART II. OTHER INFORMATION Item 5. Other Information Effective September 11, 1995, Clifford L. Alexander, Jr. resigned as a member of the Board of Directors of the Company due to other commitments. Mr. Alexander was a director since 1987. The Company has begun a search to fill the vacancy. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits: None. (b) Reports on Form 8-K during the quarter ended September 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) Dan C. Eaton Vice President - Strategic & Financial Planning Date: November 14, 1995 EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 3-MOS DEC-31-1995 SEP-30-1995 29,729 0 169,192 9,912 27,288 290,962 2,301,723 719,190 2,010,058 457,558 415,313 213,468 0 0 538,146 2,010,058 270,992 270,992 0 256,534 0 747 12,674 357 (1,327) 1,684 0 0 0 1,684 .05 .05
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