-----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, ra2yGVNfquTthQM6p3Ps66tg+Nkgcd+U4QDYt5hZUsUbFKaSCE/AXV0UEpLzuo6y tUdebHnXcsiKmzqm58yq2A== 0000950134-95-001188.txt : 19950517 0000950134-95-001188.hdr.sgml : 19950517 ACCESSION NUMBER: 0000950134-95-001188 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950515 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: K N ENERGY INC CENTRAL INDEX KEY: 0000054502 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS TRANSMISSION & DISTRIBUTION [4923] IRS NUMBER: 480290000 STATE OF INCORPORATION: KS FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-06446 FILM NUMBER: 95539978 BUSINESS ADDRESS: STREET 1: 370 VAN GORDON STREET STREET 2: PO BOX 281304 CITY: LAKEWOOD STATE: CO ZIP: 80228-8304 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 1 FORM 10-Q 1 ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1995 ------------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ----------------- ----------------- Commission File Number 1-6446 ------------ 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 50,000,000 shares; outstanding 27,762,704 shares as of April 30, 1995. 2 Form 10-Q K N ENERGY, INC. AND SUBSIDIARIES FORM 10-Q QUARTER ENDED MARCH 31, 1995 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 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations........................................................ 10 - 12 PART II. OTHER INFORMATION Item 1. Legal Proceedings.............................................................................. 13 Item 4. Submission of Matters to a Vote of Security Holders........................................................................... 13 Item 6. Exhibit 27 - Financial Data Schedule*.......................................................... SIGNATURE................................................................................................. 14
* Included in SEC EDGAR Filing Only. 2 3 Form 10-Q CONSOLIDATED BALANCE SHEETS K N ENERGY, INC. AND SUBSIDIARIES (DOLLARS IN THOUSANDS)
MARCH 31 DECEMBER 31 1995 1994 ---- ---- (UNAUDITED) ASSETS Current Assets: Cash and Cash Equivalents....................................................... $ 26,094 $ 20,613 Accounts Receivable............................................................. 109,856 151,834 Material and Supplies, at Average Cost.......................................... 9,974 12,687 Gas in Underground Storage...................................................... 16,872 31,695 Prepaid Gas..................................................................... 15,269 12,456 Exchange Gas and Other.......................................................... 42,341 50,029 ---------- ---------- 220,406 279,314 ---------- ---------- INVESTMENTS..................................................................... 10,181 9,186 ---------- ---------- PROPERTY, PLANT AND EQUIPMENT, AT COST: Retail Natural Gas Services..................................................... 356,727 358,337 Interstate Transportation and Storage Services.................................. 372,825 371,253 Gathering, Processing and Marketing Services.................................... 554,270 533,226 Gas and Oil Production.......................................................... 51,622 49,578 ---------- ---------- 1,335,444 1,312,394 Less - Accumulated Depreciation, Depletion and Amortization..................... 472,818 461,745 ---------- ---------- 862,626 850,649 ---------- ---------- DEFERRED CHARGES AND OTHER ASSETS............................................... 17,758 33,235 ---------- ---------- $1,110,971 $1,172,384 ========== ==========
3 4 Form 10-Q CONSOLIDATED BALANCE SHEETS K N ENERGY, INC. AND SUBSIDIARIES (DOLLARS IN THOUSANDS)
MARCH 31 DECEMBER 31 1995 1994 ---- ---- (UNAUDITED) LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Current Maturities of Preferred Stock and Long-Term Debt........................ $ 32,006 $ 30,384 Notes Payable................................................................... 46,000 60,000 Accounts Payable................................................................ 67,544 108,755 Accrued Taxes................................................................... 11,115 6,197 Exchange Gas and Other.......................................................... 37,482 50,434 ---------- ---------- 194,147 255,770 ---------- ---------- DEFERRED LIABILITIES, CREDITS AND RESERVES: Deferred Income Taxes........................................................... 95,703 96,054 Deferred Revenues............................................................... 48,030 42,090 Other........................................................................... 24,864 28,194 ---------- ---------- 168,597 166,338 ---------- ---------- LONG-TERM DEBT.................................................................. 321,372 334,644 ---------- ---------- MINORITY INTERESTS IN EQUITY OF SUBSIDIARIES.................................... 14,510 13,231 ---------- ---------- PREFERRED STOCK SUBJECT TO MANDATORY REDEMPTION................................. 1,143 1,715 ---------- ---------- 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 Stockholders' Equity Common Stock - Authorized - 50,000,000 Shares, Par Value $5 Per Share Outstanding - 27,739,146 and 27,617,531 Shares, Respectively............ 138,696 138,088 Additional Paid-in Capital.................................................. 172,537 170,932 Retained Earnings........................................................... 93,499 86,032 Deferred Compensation....................................................... (327) (378) Treasury Stock, at Cost, (9,126 and 44,417 Shares, Respectively)............ (203) (988) ---------- ---------- Total Common Stockholders' Equity............................................... 404,202 393,686 ---------- ---------- Total Stockholders' Equity...................................................... 411,202 400,686 ---------- ---------- $1,110,971 $1,172,384 ========== ==========
The accompanying notes are an integral part of these balance sheets. 4 5 Form 10-Q CONSOLIDATED STATEMENTS OF INCOME (Unaudited) K N ENERGY, INC. AND SUBSIDIARIES (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED MARCH 31 ---------------------- 1995 1994 ---- ---- OPERATING REVENUES: Retail Natural Gas Services..................................................... $ 75,698 $ 79,565 Interstate Transportation and Storage Services.................................. 7,217 5,335 Gathering, Processing and Marketing Services.................................... 206,701 261,166 Gas and Oil Production.......................................................... 2,091 2,904 -------- -------- Total Operating Revenues........................................................ 291,707 348,970 -------- -------- OPERATING COSTS AND EXPENSES: Gas Purchases................................................................... 197,743 262,734 Operations and Maintenance...................................................... 44,933 43,067 Depreciation, Depletion and Amortization........................................ 12,338 12,818 Taxes, Other Than Income Taxes.................................................. 5,201 4,411 -------- -------- Total Operating Costs and Expenses.............................................. 260,215 323,030 -------- -------- OPERATING INCOME................................................................ 31,492 25,940 -------- -------- OTHER INCOME AND (DEDUCTIONS): Interest Expense................................................................ (8,954) (7,302) Minority Interests.............................................................. (577) (185) Other, Net...................................................................... 569 155 -------- -------- Total Other Income and (Deductions)............................................. (8,962) (7,332) -------- -------- INCOME BEFORE INCOME TAXES...................................................... 22,530 18,608 Income Taxes.................................................................... 8,012 6,649 -------- -------- NET INCOME...................................................................... 14,518 11,959 Less - Preferred Stock Dividends................................................ 123 157 -------- -------- EARNINGS AVAILABLE FOR COMMON STOCK............................................. $ 14,395 $ 11,802 ======== ======== Number of Shares Used in Computing Earnings Per Common Share................................................... 28,144 27,718 ======== ======== EARNINGS PER COMMON SHARE....................................................... $ 0.51 $ 0.42 ======== ======== DIVIDENDS PER COMMON SHARE...................................................... $ 0.25 $ 0.13 ======== ========
The accompanying notes are an integral part of these statements of income. 5 6 Form 10-Q CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) K N ENERGY, INC. AND SUBSIDIARIES (IN THOUSANDS)
THREE MONTHS ENDED MARCH 31 ---------------------- 1995 1994 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES: Net Income...................................................................... $ 14,518 $ 11,959 Adjustments to Reconcile Net Income to Net Cash from Operating Activities: Depreciation, Depletion and Amortization..................................... 12,338 12,818 Minority Interests........................................................... 577 185 Provisions for Losses on Accounts Receivable................................. 250 274 Executive Stock Compensation................................................. 51 323 Deferred Purchased Gas Costs................................................. 5,483 6,579 Changes in Other Working Capital Items....................................... 14,840 60,252 Changes in Deferred Revenues................................................. 5,940 4,578 Other, Net................................................................... 5,976 4,780 -------- -------- NET CASH FLOWS FROM OPERATING ACTIVITIES........................................ 59,973 101,748 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital Expenditures............................................................ (14,645) (22,779) Acquisitions, Net of Cash Acquired ............................................. (10,369) (28,730) Other Funds Used During Construction............................................ -- 73 Investments..................................................................... (995) 3 Proceeds from Sale of Facilities................................................ 425 78 (Payments) Collections Under Basket Agreement................................... 715 (322) -------- -------- NET CASH FLOWS USED IN INVESTING ACTIVITIES..................................... (24,869) (51,677) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Short-Term Debt (Net)........................................................... (14,000) (38,000) Long-Term Debt - Issued................................................... -- 1,100 - Retired.................................................. (12,237) (8,091) Common Stock Issued............................................................. 2,213 5,790 Treasury Stock - Issued................................................... 785 254 - Acquired................................................. -- (417) Cash Dividends - Common................................................... (6,928) (3,666) - Preferred................................................ (123) (157) Minority Interests - Contributions............................................ 1,031 933 - Distributions............................................ (329) (218) Premium on Debt Reacquisition and Issue Costs................................... (35) (2) -------- -------- NET CASH FLOWS USED IN FINANCING ACTIVITIES..................................... (29,623) (42,474) -------- -------- Net Increase in Cash and Cash Equivalents....................................... 5,481 7,597 Cash and Cash Equivalents at Beginning of Year.................................. 20,613 14,353 -------- -------- CASH AND CASH EQUIVALENTS AT END OF PERIOD...................................... $ 26,094 $ 21,950 ======== ========
The accompanying notes are an intergral part of these statements of cash flows. 6 7 Form 10-Q CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) K N ENERGY, INC. AND SUBSIDIARIES (IN THOUSANDS)
THREE MONTHS ENDED MARCH 31 ---------------------- 1995 1994 ---- ---- CHANGES IN OTHER WORKING CAPITAL ITEMS SUMMARY (NET OF ACQUISITION EFFECTS): Accounts Receivable............................................................. $41,728 $ 1,962 Contract Demand Receivables ................................................... -- 38,732 Material and Supplies........................................................... 2,713 278 Gas in Underground Storage...................................................... 14,840 12,249 Accounts Payable, Accrued Taxes and Other Current Liabilities................... (49,316) 5,170 Other Current Assets............................................................ 4,875 1,861 ------- ------- $14,840 $60,252 ======= ======= SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash Paid During the Year for: Interest (Net of Amount Capitalized)............................................ $ 9,990 $10,650 ======= ======= Income Taxes.................................................................... $ 9 $ 778 ======= =======
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES On February 16, 1995, K N's gas transmission affiliate, AOG Gas Transmission Company, L.P., acquired natural gas transmission pipeline and storage assets in Texas. In conjunction with the acquisition, liabilities were assumed as follows:
1995 ---- Fair Value of Assets Acquired................................................... $13,440 Cash Paid for Assets............................................................ (10,369) ------- Liabilities Assumed............................................................. $ 3,071 =======
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. Certain prior year amounts have been reclassified to conform with the 1995 presentation. 2. Merger On July 13, 1994, pursuant to the Agreement of Merger dated March 24, 1994, American Oil and Gas Corporation ("AOG") was merged into the Company. As a result of the merger, each outstanding share of common stock of AOG was converted into 0.47 of a share of common stock of K N. In connection with the merger, all the outstanding shares of AOG common stock were converted into approximately 12.2 million shares of K N stock, and the authorized number of shares of K N common stock was increased to 50 million shares. The merger was accounted for as a pooling of interests and, accordingly, the historical consolidated financial statements for periods prior to consummation of the merger have been restated as though the companies had been combined for all periods reported herein. 3. Merger and Restructuring Costs The Company recorded merger and restructuring costs totaling $25.9 million in the third quarter of 1994. Total expected cash expenditures relating to these charges are $23.4 million, of which $3.0 million had not yet been paid as of March 31, 1995. Merger expenses include $12.4 million in investment bankers' and other professional fees, $7.7 million for severance and employee benefit costs for approximately 230 employees who have been or will be terminated through consolidation of administrative and operational staff, and $4.6 million in costs to eliminate duplicative space requirements and equipment, and to write-off the cost of information systems not required subsequent to the merger. Restructuring costs related to the formal restructuring plan of the Company's retail distribution operations total $1.2 million, representing severance and employee benefit costs for terminating approximately 90 retail distribution employees as a result of the restructuring and centralization of customer service functions. 4. Acquisitions On February 16, 1995, the Company acquired natural gas transmission pipeline and storage assets in Texas. The assets include two West Texas pipeline systems, comprised of 347 miles of pipeline and related facilities, which are currently connected to AOG's core pipeline system. In addition, surface facilities, lease rights and approximately 10.8 Bcf of natural gas in storage in a leased, Gulf Coast storage field were acquired. AOG also acquired the remaining 50 percent interest it did not previously own in a 90-mile joint venture pipeline near Midland, Texas. 8 9 Form 10-Q The total price was $80.1 million, subject to closing adjustments. The Company utilized an operating lease and short-term debt financing arrangements to fund the acquisition. 5. Regulatory Matters In January 1995, as a result of an agreement reached with its customers, the Company filed an application with FERC to transfer three storage fields, including approximately 45 Bcf of cushion gas held by K N Interstate Gas Transmission Co. ("KNI"), to a newly created nonjurisdictional affiliate, K N Natural Gas, Inc. ("KNNG"). On May 2, 1995, FERC issued an order approving the storage reorganization filing. With the approval of this transfer, KNI will own only the Huntsman, Nebraska storage facilities, which will remain as jurisdictional facilities and continue to provide storage services. Jurisdictional rates will be restated to reflect this transfer. KNNG will be able to market its cushion gas at market rates from the three storage facilities which were transferred. 6. Treasury Stock In April 1995, K N's Board of Directors authorized the purchase on the open market of up to 500,000 shares of the Company's common stock through December 31, 1996. Any such purchases will be used to fund Company benefit plans and the Company's dividend reinvestment plan. Such a program is in the ordinary course of K N's business and is a continuation of a similar share purchasing program that K N has used in the past. 9 10 Form 10-Q MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS CONSOLIDATED FINANCIAL RESULTS For the first quarter of 1995, K N reported consolidated net income of $14.5 million, or $0.51 per common share, after payment of preferred dividends. This reflects a 21 percent increase in earnings compared with the 1994 first quarter's net income of $12.0 million, or $0.42 per common share. Stringent cost controls (including realized expense savings from the K N-AOG merger), contributions from the February 1995 acquisition of transmission and storage assets in Texas, and the impact of 1994 rate increases (subsequent to the first quarter of 1994) were the key factors to the 1995 earnings improvement. These factors more than offset the adverse effects of mild winter weather and lower natural gas prices. RESULTS OF OPERATIONS First quarter operating results by business segment and consolidated other income and (deductions) and income taxes are discussed below. Segment operating revenues, gas purchases, operations and maintenance expenses and volumetric data cited below are before intersegment eliminations (dollars in millions).
Retail Natural Gas Services 1995 1994 ---- ---- Operating Revenues - Gas Sales $73.3 $77.6 Transportation and Other 2.5 2.0 ----- ----- 75.8 79.6 ----- ----- Operating Costs and Expenses - Gas Purchases 45.4 50.3 Operations and Maintenance 13.6 14.6 Depreciation, Depletion and Amortization 3.2 2.9 Taxes, Other Than Income Taxes 1.9 1.4 ----- ----- 64.1 69.2 ----- ----- Operating Income $11.7 $10.4 ===== ===== Systems Throughput (Trillion Btus) - Gas Sales 13.3 14.9 Transportation 6.2 4.1 ----- ----- 19.5 19.0 ===== ===== System Wide Degree Days 2,823 3,137
As indicated by degree days, the first quarter of 1995 was 10 percent milder than the previous year. The decline in 1995 gas sales revenues and volumes and gas purchases primarily reflects the milder weather. Sales volumes also declined as several commercial customers converted to transportation service. Rate increases on the Rocky Mountain distribution system, subsequent to the first quarter of 1994, and expense reductions due to the centralization of customer service operations more than offset the weather impact. 10 11 Form 10-Q
INTERSTATE TRANSPORTATION AND STORAGE SERVICES 1995 1994 ---- ---- Operating Revenues - Transportation and Storage $15.3 $15.3 Natural Gas Liquids and Other 1.3 0.9 ----- ----- 16.6 16.2 ----- ----- Operating Costs and Expenses - Gas Purchases 1.4 0.8 Operations and Maintenance 7.0 5.7 Depreciation, Depletion and Amortization 2.1 2.1 Taxes, Other Than Income Taxes 0.8 1.1 ----- ----- 11.3 9.7 ----- ----- Operating Income $ 5.3 $ 6.5 ===== ===== Systems Throughput (Trillion Btus) - 38.9 41.3 ===== ===== Natural Gas Liquids (Millions of Gallons) 3.5 3.2 ===== =====
As a part of the 1994 FERC rate case, customers renominated lower levels of firm storage service. Accordingly, the impact of higher rates resulting from the late 1994 rate case settlement was partially offset by lower storage revenues in the 1995 first quarter. Also contributing to the decline in 1995 operating income, compared to the 1994 first quarter, was the favorable resolution in 1994 of certain environmental or legal contingencies. First quarter 1994 operations and maintenance expense was reduced by $1.3 million as reserves for these issues were no longer required.
GATHERING, PROCESSING AND MARKETING SERVICES 1995 1994 ---- ---- Operating Revenues - Gas Sales $178.4 $236.7 Transportation and Gathering 11.4 11.5 Natural Gas Liquids and Other 30.0 27.0 ------ ------ 219.8 275.2 ------ ------ Operating Costs and Expenses - Gas Purchases 174.0 236.4 Operations and Maintenance 23.4 22.5 Depreciation, Depletion and Amortization 5.9 6.3 Taxes, Other Than Income Taxes 2.3 1.6 ------ ------ 205.6 266.8 ------ ------ Operating Income $ 14.2 $ 8.4 ====== ====== System Throughput (Trillion Btus) - Gas Sales 89.1 100.3 Transportation and Gathering 81.6 78.9 ------ ------ 170.7 179.2 ====== ====== Natural Gas Liquids (Millions of Gallons) 92.8 89.5 ====== ======
Although first quarter 1995 gas sales volumes were 11.2 trillion Btus lower than the 1994 first quarter, sales margins were higher due to favorable gas costs and a greater percentage of 1995 sales being made to firm requirements customers. First quarter 1995 results also benefited from the February acquisition of natural gas transmission and storage assets in Texas, lower operations and maintenance expense (excluding expenses of the February acquisition), and an improvement in margins on natural gas liquids due to improved recoveries. 11 12 Form 10-Q
GAS AND OIL PRODUCTION 1995 1994 ---- ---- Operating Revenues - Gas and Oil Sales $2.3 $3.4 Other 0.5 0.4 ---- ---- 2.8 3.8 ---- ---- Operating Costs and Expenses - Operations and Maintenance 1.2 1.3 Depreciation, Depletion and Amortization 1.1 1.6 Taxes, Other Than Income Taxes 0.2 0.3 ---- ---- 2.5 3.2 ---- ---- Operating Income $0.3 $0.6 ==== ==== Gas and Oil Production (Equivalent Bcf) 1.3 1.8 ==== ====
The decline in 1995 operating income reflects low natural gas prices which also resulted in shut-in production. Additionally, the first quarter 1994 results included production from gas and oil reserves acquired in February 1994. In October 1994, the Company sold a 50 percent interest in these properties.
OTHER INCOME AND (DEDUCTIONS) 1995 1994 ---- ---- Interest Expense $(9.0) $(7.3) ===== =====
The increase in first quarter 1995 interest expense is due to the October 1994 sale of $75 million of 8.75% debentures.
INCOME TAXES 1995 1994 ---- ---- Provisions $ 8.0 $ 6.6 ===== ===== Effective Tax Rate 35.6% 35.7%
The effective tax rates for both 1995 and 1994 reflect tax credits on production from gas wells qualifying for non-conventional fuel credit under Section 29 of the Internal Revenue Code. LIQUIDITY AND CAPITAL RESOURCES First quarter 1995 net cash flows from operations were $60.0 million, or $3.0 million below net operating cash flows for the 1994 first quarter, excluding the $41 million of proceeds from the February 1994 sale of contract demand receivables. Short-term debt was $46.0 million at March 31, 1995, compared with short-term borrowings of $60.0 million and $9.0 million at December 31, 1994 and March 31, 1994, respectively. In February 1995, the Company completed the $80.1 million acquisition of natural gas transmission and storage assets in Texas. Approximately $66 million of the acquisition was financed by an operating lease. 12 13 Form 10-Q OTHER INFORMATION Item 1. Legal Proceedings Mystery Bridge Road Environmental Matters. As reported in the Company's Annual Report on Form 10-K, the Company was named as one of four potentially responsible parties ("PRPs") at a U.S. Environmental Protection Agency ("EPA") Superfund site known as the Mystery Bridge Road/U.S. Highway 20 site located near Casper, Wyoming. "Operating Unit Two", which addressed remediation of the soil and free-phase petroleum product, was certified by the EPA as complete in March 1995, and a monitoring phase is now underway. The Company expects the monitoring phase to continue until summer 1996. Westerman, et al. vs. K N Energy, Inc., et al. As reported in the Company's Annual Report on Form 10-K, on December 8, 1994, K N and its wholly-owned subsidiary K N Gas Supply Services, Inc. were sued by gas producers under claims arising from two gas purchase contracts covering gas purchases from wells in the Niobrara Field, Colorado. The parties are awaiting a decision on proper court venue. For information relating to other legal proceedings, see Notes 5 and 6 of Notes to Consolidated Financial Statements on Pages 42-46 of the 1994 Annual Report on Form 10-K and Item 3: Legal Proceedings on Pages 16-20 on the 1994 Annual Report on Form 10-K. Item 4. Submission of Matters to a Vote of Security Holders (a) The Registrant held its Annual Meeting of Shareholders on April 6, 1995. (b) Proxies for the meeting were solicited pursuant to Regulation 14 of the Securities Exchange Act of 1934. There was no solicitation in opposition to management's nominees for directors as listed in the Proxy Statement and all such nominees were elected. 13 14 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) May 15, 1995 /s/ E. Wayne Lundhagen ------------------------------------------- E. Wayne Lundhagen Vice President and Treasurer (On Behalf of the Registrant and as Principal Financial and Accounting Officer) 14 15 INDEX TO EXHIBITS
EXHIBIT NO. EXHIBIT DESCRIPTION PAGE - ----------- ------------------- ---- 27 Financial Data Schedule
EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 3-MOS DEC-31-1995 MAR-31-1995 26,094 0 109,856 0 26,846 220,406 1,335,444 472,818 1,110,971 194,147 321,372 138,696 1,143 7,000 265,506 1,110,971 291,707 291,707 197,743 260,215 0 0 8,954 22,530 8,012 14,518 0 0 0 14,518 0.51 0
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