-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, jLuc1R+W1m+vfossMLu4ywZp+xWgMR/xPsB8Q8peewEfw4bhqRM3VgRFKaUMWE5s 2ogZ9eikBD1eRZ5IEbVbqw== 0000950129-94-000477.txt : 19940614 0000950129-94-000477.hdr.sgml : 19940614 ACCESSION NUMBER: 0000950129-94-000477 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940331 FILED AS OF DATE: 19940609 FILER: COMPANY DATA: COMPANY CONFORMED NAME: K N ENERGY INC CENTRAL INDEX KEY: 0000054502 STANDARD INDUSTRIAL CLASSIFICATION: 4923 IRS NUMBER: 480290000 STATE OF INCORPORATION: KS FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-06446 FILM NUMBER: 94533527 BUSINESS ADDRESS: STREET 1: P O BOX 281304 STREET 2: 12055 WEST 2ND PLACE CITY: LAKEWOOD STATE: CO ZIP: 80228 BUSINESS PHONE: 3039891740 FORMER COMPANY: FORMER CONFORMED NAME: KN ENERGY INC DATE OF NAME CHANGE: 19920430 FORMER COMPANY: FORMER CONFORMED NAME: KANSAS NEBRASKA NATURAL GAS CO INC DATE OF NAME CHANGE: 19830403 10-Q/A 1 10-Q/A TO KN ENERGY 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q/A (Mark One) /x/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1994 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 1-6446 K N ENERGY, INC. _______________________________________________________________________________ (Exact name of registrant as specified in its charter) Kansas 48-0290000 _______________________________ ___________________ (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 370 Van Gordon Street P.O. Box 281304, Lakewood, Colorado 80228-8304 _________________________________________ ___________________ (Address of principal executive offices) (Zip Code) (303) 989-1740 _______________________________________________________________________________ (Registrant's telephone number, including area code) _______________________________________________________________________________ (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 the issuer's classes of common stock, as of the latest practicable date. Common stock, $5 par value; authorized 25,000,000 shares; outstanding 15,308,462 shares as of April 30, 1994. 2 Form 10-Q K N ENERGY, INC. AND SUBSIDIARIES FORM 10-Q/A QUARTER ENDED MARCH 31, 1994 INDEX PART I FINANCIAL INFORMATION Item 1. Financial Statements
Page Number ----------- Consolidated Balance Sheets (Unaudited) . . . . . . . . . . . . . . . . . . 3-4 Consolidated Statements of Income (Unaudited) . . . . . . . . . . . . . . . 5 Consolidated Statements of Cash Flows (Unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-7 Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . 8-9 SIGNATURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2 3 Form 10-Q CONSOLIDATED BALANCE SHEETS K N Energy, Inc. and Subsidiaries
MARCH DECEMBER 31, 1994 31, 1993 -------- -------- (Unaudited) (Dollars in Thousands) ASSETS CURRENT ASSETS: Cash and Cash Equivalents . . . . . . . . . . . . . . . . . . . . . . . $ 10,453 $ 4,760 Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . 92,405 88,491 Contract Demand Receivables . . . . . . . . . . . . . . . . . . . . . . -- 38,732 Material and Supplies, at Average Cost . . . . . . . . . . . . . . . . 9,097 8,603 Gas in Underground Storage . . . . . . . . . . . . . . . . . . . . . . 2,073 5,836 Prepaid Gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,485 11,689 Exchange Gas and Other . . . . . . . . . . . . . . . . . . . . . . . . 27,121 28,707 ---------- ---------- 153,634 186,818 ---------- ---------- PROPERTY, PLANT AND EQUIPMENT, AT COST: Gas Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 857,221 842,638 Gas and Oil Production . . . . . . . . . . . . . . . . . . . . . . . . 63,248 34,381 ---------- ---------- 920,469 877,019 Less-Accumulated Depreciation, Deple- tion and Amortization . . . . . . . . . . . . . . . . . . . . . . . 377,730 369,957 ---------- ---------- 542,739 507,062 ---------- ---------- DEFERRED CHARGES AND OTHER ASSETS . . . . . . . . . . . . . . . . . . . 27,583 37,389 ---------- ---------- $ 723,956 $ 731,269 ========== ==========
The accompanying notes are an integral part of these balance sheets. 3 4 Form 10-Q CONSOLIDATED BALANCE SHEETS K N Energy, Inc. and Subsidiaries
MARCH DECEMBER 31, 1994 31, 1993 -------- -------- (Unaudited) (Dollars in Thousands) LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Current Maturities of Preferred Stock and Long-Term Debt . . . . . . . . . . . . $ 6,071 $ 3,500 Notes Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,000 47,000 Accounts Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82,022 73,713 Accrued Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,322 10,299 Exchange Gas and Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,679 27,447 ---------- ---------- 142,094 161,959 ---------- ---------- DEFERRED LIABILITIES, CREDITS AND RESERVES: Deferred Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59,708 60,444 Deferred Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48,270 43,692 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,148 21,879 ---------- ---------- 133,126 126,015 ---------- ---------- LONG-TERM DEBT: Sinking Fund Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99,550 99,543 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127,341 132,338 ---------- ---------- 226,891 231,881 ---------- ---------- Preferred Stock Subject to Mandatory Redemption . . . . . . . . . . . . . . . . . 2,286 2,858 ---------- ---------- STOCKHOLDERS' EQUITY: Preferred Stock- Authorized - Class A, 200,000 Shares; Class B, 2,000,000 Shares, All Without Par Value Redeemable Solely at Option of Company at $105 Per Share- Class A, $5.00 Cumulative Series; 70,000 Shares . . . . . . . . . . . . . . 7,000 7,000 ---------- ---------- Common Stock- Authorized - 25,000,000 Shares, Par Value $5 Per Share, Outstanding 15,278,661 and 15,035,031 Shares, Respectively . . . . . . . . . 76,393 75,177 Additional Paid-In Capital . . . . . . . . . . . . . . . . . . . . . . . . . . 32,995 28,907 Retained Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103,334 97,472 ---------- ---------- 212,722 201,556 Treasury Stock, at Cost (6,800 and 0 shares, Respectively) . . . . . . . . . . (163) -- ---------- ---------- Total Common Stockholders' Equity . . . . . . . . . . . . . . . . . . . . . . . 212,559 201,556 ---------- ---------- 219,559 208,556 ---------- ---------- $ 723,956 $ 731,269 ========== ==========
4 5 Form 10-Q CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) K N Energy, Inc. and Subsidiaries
THREE MONTHS ENDED MARCH 31, --------- 1994 1993 ---- ---- (Dollars in Thousands Except Per Share Amounts) OPERATING REVENUES: Gas Services . . . . . . . . . . . . . . . . . . . . . . . . $ 186,429 $ 150,223 Gas and Oil Production . . . . . . . . . . . . . . . . . . . 2,943 1,043 ---------- ---------- Total Operating Revenues . . . . . . . . . . . . . . . . . . 189,372 151,266 ---------- ---------- OPERATING COSTS AND EXPENSES: Gas Purchases . . . . . . . . . . . . . . . . . . . . . . . . 122,795 81,701 Operations and Maintenance . . . . . . . . . . . . . . . . . 35,557 33,351 Depreciation, Depletion and Amortization . . . . . . . . . . 7,691 6,219 Taxes, Other Than Income Taxes . . . . . . . . . . . . . . . 3,091 2,975 ---------- ---------- Total Operating Costs and Expenses . . . . . . . . . . . . . 169,134 124,246 ---------- ---------- OPERATING INCOME . . . . . . . . . . . . . . . . . . . . . . 20,238 27,020 ---------- ---------- OTHER INCOME AND (DEDUCTIONS): Interest Expense . . . . . . . . . . . . . . . . . . . . . . (5,251) (5,642) Other, Net . . . . . . . . . . . . . . . . . . . . . . . . . 96 (91) ---------- ---------- Total Other Income and (Deductions) . . . . . . . . . . . . . (5,155) (5,733) ---------- ---------- INCOME BEFORE INCOME TAXES . . . . . . . . . . . . . . . . . 15,083 21,287 Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . 5,398 7,981 ---------- ---------- NET INCOME . . . . . . . . . . . . . . . . . . . . . . . . . 9,685 13,306 Less-Preferred Stock Dividends . . . . . . . . . . . . . . . 157 203 ---------- ---------- NET INCOME AVAILABLE FOR COMMON STOCK . . . . . . . . . . . . $ 9,528 $ 13,103 ========== ========== AVERAGE COMMON SHARES OUTSTANDING (IN THOUSANDS) . . . . . . 15,193 14,757 ========== ========== EARNINGS PER COMMON SHARE . . . . . . . . . . . . . . . . . . $ 0.63 $ 0.88 ========== ========== DIVIDENDS PER COMMON SHARE . . . . . . . . . . . . . . . . . $ 0.24 $ 0.22 ========== ==========
The accompanying notes are an integral part of these statements. 5 6 Form 10-Q CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) K N ENERGY, INC. AND SUBSIDIARIES
THREE MONTHS ENDED MARCH 31, --------- 1994 1993 ---- ---- (Dollars in Thousands CASH FLOWS FROM OPERATING ACTIVITIES: Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9,685 $ 13,306 Adjustments to Reconcile Net Income to Net Cash from Operating Activities: Depreciation, Depletion and Amortization . . . . . . . . . . . . . . . . . 7,691 6,219 Provisions for Losses on Accounts Receivable . . . . . . . . . . . . . . . 274 476 Deferred Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 207 921 Deferred Purchased Gas Costs . . . . . . . . . . . . . . . . . . . . . . . 6,579 1,428 Other Funds Used During Construction . . . . . . . . . . . . . . . . . . . (73) (33) Changes in Other Working Capital Items . . . . . . . . . . . . . . . . . . . 54,567 7,662 Changes in Non-Current Gas in Underground Storage . . . . . . . . . . . . . . -- 15,352 Changes in Other Assets and Liabilities . . . . . . . . . . . . . . . . . . . 6,681 2,881 ---------- ---------- NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES . . . . . . . . . . . . . . . 85,611 48,212 ---------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . (11,653) (12,761) Other Funds Used During Construction . . . . . . . . . . . . . . . . . . . . 73 33 Proceeds from Sale of Facilities . . . . . . . . . . . . . . . . . . . . . . 73 80 Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 (27) Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (28,730) (18,644) ---------- ---------- NET CASH FLOWS USED IN INVESTING ACTIVITIES . . . . . . . . . . . . . . . . . (40,234) (31,319) ---------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES: Short-Term Debt (Net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . (38,000) (2,000) Long-Term Debt - Retired . . . . . . . . . . . . . . . . . . . . . . . . . . (3,000) (4,015) Common Stock Issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,304 3,417 Treasury Stock - Issued . . . . . . . . . . . . . . . . . . . . . . . . . . . 254 -- - Acquired . . . . . . . . . . . . . . . . . . . . . . . . . . (417) -- Cash Dividends - Common . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,666) (3,265) - Preferred . . . . . . . . . . . . . . . . . . . . . . . . . . (157) (203) Premium on Debt Reacquisition and Issue Costs . . . . . . . . . . . . . . . . (2) (77) ---------- ---------- NET CASH FLOWS USED IN FINANCING ACTIVITIES . . . . . . . . . . . . . . . . . (39,684) (6,143) ---------- ---------- Net Increase in Cash and Cash Equivalents . . . . . . . . . . . . . . . . . . 5,693 10,750 Cash and Cash Equivalents at Beginning of Period . . . . . . . . . . . . . . 4,760 7,962 ---------- ---------- Cash and Cash Equivalents at End of Period . . . . . . . . . . . . . . . . . $ 10,453 $ 18,712 ========== ==========
The accompanying notes are an integral part of these statements. 6 7 Form 10-Q CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) K N ENERGY, INC. AND SUBSIDIARIES
THREE MONTHS ENDED MARCH 31, --------- 1994 1993 ---- ---- (Dollars in Thousands CHANGES IN OTHER WORKING CAPITAL ITEMS SUMMARY: Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . $ (4,188) $ 8,838 Contract Demand Receivables . . . . . . . . . . . . . . . . . . . 38,732 -- Material and Supplies . . . . . . . . . . . . . . . . . . . . . . (494) (978) Gas in Underground Storage . . . . . . . . . . . . . . . . . . . 3,763 (624) Accounts Payable, Accrued Taxes and Other Current Liabilities . . 16,480 305 Exchange Gas, Net . . . . . . . . . . . . . . . . . . . . . . . . (511) (975) Other Current Assets . . . . . . . . . . . . . . . . . . . . . . 785 1,096 ---------- ---------- $ 54,567 $ 7,662 ========== ========== SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash Paid During the Year for: Interest (Net of Amount Capitalized) . . . . . . . . . . . . . $ 8,197 $ 8,823 Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . $ 28 $ 2,262
7 8 Form 10-Q NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. General In the opinion of management, all adjustments necessary for a fair statement of the results for the unaudited interim periods have been made. These adjustments consist only of normal recurring accruals. 2. Reclassification of 1993 Amounts Certain 1993 amounts have been reclassified to conform to the 1994 presentation. 3. Regulatory Matters On March 11, 1994, Rocky Mountain Natural Gas Division of K N Energy, Inc. ("RMNGD") filed an application for a "make whole" rate increase of $2.5 million on an annual basis with the Colorado Public Utilities Commission ("CPUC"). The CPUC approved interim rate relief of $1.5 million which became effective, subject to refund, on April 2, 1994. Pursuant to the request of the CPUC, on April 28, 1994, RMNGD filed a continuation of the March 11, 1994 application, supplementing its request for the $2.5 million "make whole" rate increase. 4. Restructuring and Reorganization As reported in the Company's 1993 Annual Report on Form 10-K, on April 8, 1992, the Federal Energy Regulatory Commission ("FERC") issued Order No. 636 ("Order 636") which requires a fundamental restructuring of interstate natural gas pipelines. K N implemented Order 636 restructured services on October 1, 1993. As a result of Order 636, K N requested, and subsequently received FERC approval to transfer substantially all of its gathering and processing facilities to K N Gas Gathering, Inc., a nonjurisdictional wholly-owned subsidiary of K N. The transfer was effective January 1, 1994. 5. Merger On March 24, 1994, K N announced that it had executed a definitive merger agreement with American Oil and Gas Corporation ("AOG"). Under the terms of the merger agreement, 0.47 of a share of K N common stock would be exchanged tax-free for each outstanding share of AOG common stock. The proposed merger is expected to be accounted for as a pooling of interests, and will require certain approvals by the shareholders of both companies, as well as specific regulatory and lender approvals. Closing is anticipated within 90 to 120 days of the date of the announcement. The Preliminary Form S-4, Joint Proxy Statement/Prospectus was filed by K N with the Securities and Exchange Commission on April 25, 1994. Early termination of the waiting period required under the Hart-Scott-Rodino Antitrust Improvements Act was received by K N and AOG on April 26, 1994. 8 9 Form 10-Q 6. Acquisition On February 1, 1994, the Company's gas and oil development subsidiaries, K N Production Company and GASCO, Inc., acquired gas reserves and production properties located near existing K N operations in western Colorado and in the Moxa Arch region of southwestern Wyoming for a total purchase price of approximately $30 million. The acquired properties have total net reserves of approximately 50 billion cubic feet equivalent of natural gas. On April 20, 1994, the Company entered into a letter of intent to sell a 50 percent interest in substantially all the acquired properties. 7. Deferred Revenues In January 1994, contract demand receivables with a face amount of $41 million were sold to a financial institution. No gain or loss was recorded on the sale. The Company is deferring revenues from certain gas sales agreements associated with these receivables pending final disposition of related gas purchase contracts. 8. Postemployment Benefits In November 1992, FASB issued SFAS 112, which establishes standards of financial accounting and reporting for the estimated cost of benefits provided by an employer to former or inactive employees after employment but before retirement. The Company adopted SFAS 112 on January 1, 1994. Implementation of SFAS 112 had no material effect on the Company's financial position or results of operations. 9. Commitments and Contingent Liabilities See Notes 5, 8 and 11 of Notes to Consolidated Financial Statements on Pages 41-43, 46, 47 and 51 of the 1993 Annual Report on Form 10-K. There have been no material changes to these disclosures except as disclosed in Part II of this report and Notes 5 and 6, above. 9 10 Form 10-Q 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. K N ENERGY, INC. (Registrant) June 9, 1994 /s/ E. Wayne Lundhagen --------------------------------------- E. Wayne Lundhagen Vice President - Finance and Accounting (On Behalf of the Registrant and as Principal Financial and Accounting Officer) 10 -----END PRIVACY-ENHANCED MESSAGE-----