<PAGE> 1
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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 June 30, 1996.
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 0-1284-2
UNITED CITIES GAS COMPANY
-------------------------
(Exact name of registrant as specified in its charter)
Illinois and Virginia 36-1801540
--------------------- ----------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
5300 Maryland Way, Brentwood, TN 37027
-------------------------------- -----
(Address of principal (Zip Code)
executive offices)
(615) 373-5310
--------------
Registrant's telephone number, including area code
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. [X] Yes [ ] No
At July 31, 1996, 13,127,555 shares of the common stock of the
Registrant were outstanding.
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<PAGE> 2
UNITED CITIES GAS COMPANY AND SUBSIDIARIES
Quarterly Report on Form 10-Q
For the Quarter Ended June 30, 1996
Table of Contents
<TABLE>
<CAPTION>
Item Page
Number Number
------ ------
PART I -- FINANCIAL INFORMATION
<S> <C> <C>
1 Financial Statements:
Consolidated Statements of Income (Unaudited) for the Three, Six 3
and Twelve Months Ended June 30, 1996 and June 30, 1995.
Consolidated Statements of Cash Flows (Unaudited) for the Three, Six 4
and Twelve Months Ended June 30, 1996 and June 30, 1995.
Consolidated Balance Sheets at June 30, 1996 (Unaudited) and 5
December 31, 1995.
Consolidated Statements of Capitalization at June 30, 1996 6
(Unaudited) and December 31, 1995.
Notes to Consolidated Financial Statements. 7
2 Management's Discussion and Analysis of Financial Condition 9
and Results of Operations.
PART II -- OTHER INFORMATION
1 Legal Proceedings. 14
4 Submission of Matters to a Vote of Security Holders. 14
6 Exhibits and Reports on Form 8-K. 14
List of Exhibits. 15
Signature 16
</TABLE>
2
<PAGE> 3
UNITED CITIES GAS COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED TWELVE MONTHS ENDED
JUNE 30, JUNE 30, JUNE 30,
------------------ ---------------- ------------------
(Unaudited, in thousands, except per share amounts) 1996 1995 1996 1995 1996 1995
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
UTILITY OPERATING REVENUES...................................... $60,698 $42,246 $205,407 $148,252 $329,015 $256,693
Natural gas cost............................................. 39,872 24,023 133,675 85,945 206,906 148,879
------- ------- -------- -------- -------- --------
UTILITY OPERATING MARGIN........................................ 20,826 18,223 71,732 62,307 122,109 107,814
------- ------- -------- -------- -------- --------
OTHER UTILITY OPERATING EXPENSES:
Operations and maintenance................................... 15,097 14,524 31,347 29,764 63,410 57,423
Depreciation and amortization................................ 3,922 3,708 8,168 7,372 15,916 14,371
Federal and state income taxes............................... (1,862) (2,430) 6,802 4,448 6,403 3,416
Other taxes.................................................. 3,148 2,978 6,618 6,397 12,521 11,579
------- ------- -------- -------- -------- --------
Total other utility operating expenses..................... 20,305 18,780 52,935 47,981 98,250 86,789
------- ------- -------- -------- -------- --------
UTILITY OPERATING INCOME (LOSS)................................. 521 (557) 18,797 14,326 23,859 21,025
OTHER UTILITY INCOME, NET OF TAX................................ 95 215 234 173 717 37
------- ------- -------- -------- -------- --------
616 (342) 19,031 14,499 24,576 21,062
------- ------- -------- -------- -------- --------
UTILITY INTEREST EXPENSE:
Interest on long-term debt................................... 3,221 2,980 6,537 6,017 12,552 12,149
Other interest expense....................................... 245 490 671 1,191 1,747 2,438
------- ------- -------- -------- -------- --------
Total utility interest expense............................. 3,466 3,470 7,208 7,208 14,299 14,587
------- ------- -------- -------- -------- --------
UTILITY INCOME (LOSS)........................................... (2,850) (3,812) 11,823 7,291 10,277 6,475
------- ------- -------- -------- -------- --------
OTHER INCOME (LOSS):
Operations of UCG Energy Corporation-
Revenues.................................................. 19,890 4,444 38,562 16,827 56,168 35,485
Operating expenses........................................ (19,804) (4,015) (34,408) (12,777) (47,256) (26,834)
Interest expense.......................................... (340) (283) (703) (521) (1,374) (909)
Depreciation and amortization............................. (993) (1,007) (1,907) (1,991) (4,294) (3,819)
Other income, net......................................... 459 372 1,990 1,313 3,007 1,659
Federal and state income taxes............................ 299 185 (1,342) (1,082) (2,378) (2,119)
------- ------- -------- -------- -------- --------
(489) (304) 2,192 1,769 3,873 3,463
------- ------- -------- -------- -------- --------
Operations of United Cities Gas Storage Company-
Revenues.................................................. 882 1,145 3,871 3,028 8,286 5,398
Operating expenses........................................ (224) (527) (2,616) (1,840) (5,681) (3,076)
Interest expense.......................................... (191) (275) (413) (506) (872) (966)
Depreciation.............................................. (98) (92) (196) (184) (380) (368)
Federal and state income taxes............................ (142) (97) (250) (193) (522) (384)
------- ------- -------- -------- -------- --------
227 154 396 305 831 604
------- ------- -------- -------- -------- --------
COMMON STOCK EARNINGS (LOSS).................................... ($3,112) ($3,962) $14,411 $9,365 $14,981 $10,542
======= ======= ======== ======== ======== ========
COMMON STOCK EARNINGS (LOSS) PER SHARE.......................... ($0.24) ($0.35) $1.11 $0.86 $1.17 $0.99
======= ======= ======== ======== ======== ========
AVERAGE NUMBER OF COMMON SHARES OUTSTANDING..................... 13,053 11,197 13,007 10,937 12,819 10,700
======= ======= ======== ======== ======== ========
COMMON STOCK DIVIDENDS PER SHARE................................ $.255 $.255 $.51 $.51 $1.02 $1.015
======= ======= ======== ======== ======== ========
</TABLE>
3
<PAGE> 4
UNITED CITIES GAS COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED TWELVE MONTHS ENDED
JUNE 30, JUNE 30, JUNE 30,
------------------ ---------------- ------------------
(Unaudited, in thousands) 1996 1995 1996 1995 1996 1995
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Common stock earnings (loss)..................................... ($3,112) ($3,962) $14,411 $9,365 $14,981 $10,542
------- ------- ------- ------- ------- -------
Adjustments to reconcile common stock earnings (loss)to net
cash provided by (used in) operating activities:
Depreciation and amortization................................... 5,013 4,807 10,271 9,547 20,590 18,558
Deferred taxes.................................................. (46) 7 (92) 13 1,675 1,458
Investment tax credits, net..................................... (90) (91) (180) (182) (345) (367)
Investment income from Woodward Marketing, L.L.C................ (116) (155) (1,383) (729) (1,989) (729)
Changes in current assets and current liabilities:
Receivables................................................... 31,077 20,073 24,379 27,111 (13,919) 3,493
Materials and supplies........................................ (147) (124) (217) (363) 412 229
Gas in storage................................................ (12,218) (7,293) (2,851) 8,445 (1,488) 2,964
Gas costs to be billed in the future.......................... 3,444 (1,901) 7,876 2,823 5,297 (2,019)
Prepayments and other......................................... (1,245) (1,391) (402) (326) (58) 564
Accounts payable.............................................. (6,099) (845) (4,236) (8,903) 4,811 (3,116)
Customer deposits and advance payments........................ 49 6 (4,551) (3,208) (3,438) 2,334
Accrued interest.............................................. (3,085) (2,542) (341) (339) 265 (264)
Supplier refunds due customers................................ (2,518) (1,487) 394 4,135 (2,728) 2,562
Accrued taxes................................................. (4,834) (4,902) 8,181 428 5,798 (193)
Other, net.................................................... 528 (1,228) 2,346 (2,527) 3,741 (2,639)
------- ------- ------- ------- ------- -------
Total adjustments........................................... 9,713 2,934 39,194 35,925 18,624 22,835
------- ------- ------- ------- ------- -------
Net cash provided by (used in) operating activities....... 6,601 (1,028) 53,605 45,290 33,605 33,377
------- ------- ------- -------- ------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property - utility................................... (7,365) (8,085) (14,360) (17,798) (31,722) (34,660)
Additions to property - non-utility............................... (1,368) (1,219) (2,975) (2,367) (5,534) (5,149)
Investment in Woodward Marketing, L.L.C., net..................... 427 (832) 642 (832) 642 (832)
------- ------- ------- ------- ------- -------
Net cash used in investing activities..................... (8,306) (10,136) (16,693) (20,997) (36,614) (40,641)
------- ------- ------- ------- ------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Short-term borrowings - net....................................... 1,101 (5,109) (22,909) (33,236) (3,548) 2,332
Proceeds from issuance of long-term debt.......................... - - - - 27,000 -
Proceeds from issuance of common stock............................ 973 20,400 1,556 21,710 3,160 24,347
Long-term debt retirements........................................ (8,384) (835) (11,661) (5,333) (12,675) (7,488)
Dividends paid.................................................... (2,764) (2,391) (5,509) (4,758) (10,957) (9,409)
------- ------- ------- ------- ------- -------
Net cash provided by (used in) financing activities....... (9,074) 12,065 (38,523) (21,617) 2,980 9,782
------- ------- ------- -------- ------- -------
NET INCREASE (DECREASE) IN CASH AND TEMPORARY INVESTMENTS........... (10,779) 901 (1,611) 2,676 (29) 2,518
CASH AND TEMPORARY INVESTMENTS AT BEGINNING OF PERIOD............... 16,170 4,519 7,002 2,744 5,420 2,902
------- ------- ------- ------- ------- -------
CASH AND TEMPORARY INVESTMENTS AT END OF PERIOD..................... $5,391 $5,420 $5,391 $5,420 $5,391 $5,420
======= ======= ======= ======= ======= =======
CASH PAID DURING THE PERIOD FOR:
Interest, net of amounts capitalized.............................. $7,215 $6,570 $8,629 $8,574 $16,219 $16,726
======= ======= ======= ======= ======= =======
Income taxes...................................................... $2,959 $2,901 $3,237 $5,069 $6,791 $5,927
======= ======= ======= ======= ======= =======
NONCASH INVESTING AND FINANCING ACTIVITIES:
Dividends reinvested.............................................. $514 $444 $1,021 $804 $2,016 $1,447
======= ======= ======= ======= ======= =======
Debt incurred to acquire assets of Harrell Propane, Inc........... - - - $1,250 - $1,250
======= ======= ======= ======= ======= =======
Debt incurred to acquire assets of Duncan Gas Service............. - - $2,957 - $2,957 -
======= ======= ======= ======= ======= =======
Common stock issued in investment in Woodward Marketing, L.L.C.... - $5,000 - $5,000 - $5,000
======= ======= ======= ======= ======= =======
Increase in common stock equity due to acquisition of Monarch Gas - - $2,434 - $2,434 -
======= ======= ======= ======= ======= =======
</TABLE>
4
<PAGE> 5
UNITED CITIES GAS COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31
1996 1995
---- ----
(In thousands) (UNAUDITED)
<S> <C> <C>
ASSETS
UTILITY PLANT:
Plant in service, at cost...................................... $461,777 $445,058
Less-accumulated depreciation................................ 167,521 157,968
-------- --------
294,256 287,090
-------- --------
NON-UTILITY PROPERTY:
Property, plant, and equipment................................. 73,559 67,423
Less-accumulated depreciation................................ 20,898 19,501
-------- --------
52,661 47,922
-------- --------
CURRENT ASSETS:
Cash and temporary investments................................. 5,391 7,002
Receivables, less allowance for uncollectible accounts
of $1,747 in 1996 and $1,352 in 1995......................... 30,138 54,517
Materials and supplies......................................... 5,131 4,914
Gas in storage................................................. 19,494 16,643
Gas costs to be billed in the future........................... 7,837 15,713
Prepayments and other.......................................... 2,430 2,028
-------- --------
70,421 100,817
-------- --------
DEFERRED CHARGES:
Unamortized debt discount and expense, net..................... 2,841 2,896
Investment in Woodward Marketing, L.L.C., net.................. 7,561 7,012
Non-compete agreements,net.................................... 3,570 3,259
Other deferred charges......................................... 11,870 11,381
-------- --------
25,842 24,548
-------- --------
$443,180 $460,377
======== ========
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
Common stock equity............................................ $158,963 $146,071
Long-term debt................................................. 158,192 163,160
-------- --------
317,155 309,231
-------- --------
CURRENT LIABILITIES:
Current portion of long-term obligations....................... 5,419 9,155
Notes payable.................................................. 9,404 32,313
Accounts payable for gas costs................................. 21,413 24,433
Other accounts payable......................................... 3,668 4,884
Accrued taxes.................................................. 12,601 4,420
Customer deposits and advance payments......................... 7,527 12,078
Accrued interest............................................... 3,271 3,612
Supplier refunds due customers................................. 6,848 6,454
Other.......................................................... 10,839 8,580
-------- --------
80,990 105,929
-------- --------
DEFERRED CREDITS:
Accumulated deferred income tax................................ 31,645 31,599
Deferred investment tax credits................................ 4,118 4,281
Income taxes due customers..................................... 5,067 5,190
Other.......................................................... 4,205 4,147
-------- --------
45,035 45,217
-------- --------
$443,180 $460,377
======== ========
</TABLE>
5
<PAGE> 6
UNITED CITIES GAS COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CAPITALIZATION
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
------------------ ----------------
(In thousands, except share amounts) (UNAUDITED)
<S> <C> <C> <C> <C>
COMMON STOCK EQUITY:
Common stock without par value, authorized
40,000,000 shares, outstanding 13,102,913 in
1996 and 12,727,280 in 1995......................... $105,812 $101,735
Capital surplus....................................... 22,462 22,462
Retained earnings..................................... 30,689 21,874
-------- --------
Total common stock equity........................... 158,963 50.1% 146,071 47.2%
-------- ----- -------- -----
LONG-TERM DEBT:
First mortgage bonds ................................. 115,000 125,000
Medium term notes, 6.20% through 6.67%, due 2000
through 2025....................................... 22,000 22,000
Senior secured storage term notes, 7.45%, due in
installments through 2007.......................... 9,645 9,926
Rental property adjustable rate term notes due in
installments through 1999.......................... 5,275 5,691
Rental property fixed rate term note, 7.90%, due in
installments through 2013.......................... 2,292 2,292
Propane term note, 6.99%, due in installments
through 2002....................................... 4,875 5,000
Other long-term obligations due in installments
through 2004....................................... 4,524 2,406
-------- --------
163,611 172,315
Less-current requirements......................... 5,419 9,155
-------- --------
Total long-term debt, excluding amounts due
within one year............................... 158,192 49.9% 163,160 52.8%
-------- ----- -------- -----
TOTAL CAPITALIZATION...................................... $317,155 100.0% $309,231 100.0%
======== ===== ======== =====
</TABLE>
6
<PAGE> 7
UNITED CITIES GAS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The accompanying unaudited financial statements reflect all
adjustments (which are of a normal recurring nature) that are, in the opinion
of management, necessary for a fair statement of the results for the interim
periods presented. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to SEC rules and
regulations. The statements should be read in conjunction with the Summary of
Significant Accounting Policies and Notes to Consolidated Financial Statements
included in the Company's annual report for the year ended December 31, 1995.
The Company's business is seasonal in nature resulting in greater
earnings during the winter months. The results of operations for the three and
six month periods ended June 30, 1996, are not necessarily indicative of the
results to be expected for the full year.
Effective January 1, 1996, the Company adopted Statement of Financial
Accounting Standards No. 121 (SFAS 121), "Accounting for the Impairment of
Long-Lived Assets and Long-Lived Assets to be Disposed Of." This statement
imposes stricter criteria for regulatory assets by requiring that such assets
be probable of future recovery at each balance sheet date. Because of the
regulatory structure in which the Company operates, the adoption of SFAS 121
did not have a material effect on the results of operations, financial
condition or cash flows of the Company.
Effective January 1, 1996, the Company adopted Statement of Financial
Accounting Standards No. 123, "Accounting for Stock-Based Compensation." For
fiscal years beginning after December 15, 1995, this statement requires new
disclosures in the notes to the financial statements about stock-based
compensation plans based on the fair value of equity instruments granted.
Companies also may base the recognition of compensation cost for instruments
issued under stock-based compensation plans on these fair values. The Company
did not change the method of accounting for these plans.
Effective January 1, 1996, United Cities Propane Gas of Tennessee,
Inc., (UCPT), a subsidiary of UCG Energy Corporation, purchased substantially
all of the propane assets of Duncan Gas Service for approximately $4,310,000.
In addition, UCPT entered into a ten-year non-compete agreement with the prior
owners for $250,000, to be paid over a ten-year period. This acquisition added
approximately 2,000 customers in the Johnson City, Tennessee area.
Effective May 17, 1996, the Company received an annual rate increase
of $410,000 in the state of Iowa. Included in the rate increase was the
recovery of $1,787,000 over a ten-year period related to the Company's
agreement with Union Electric Company (Union Electric) whereby Union Electric
agreed to assume responsibility for the Company's continuing investigation and
environmental response action obligations as outlined in the feasibility study
pertaining to a manufactured gas plant site in Keokuk, Iowa.
On June 28, 1996, Monarch Gas Company (Monarch) was merged into the
Company. The merger was accounted for as a pooling of interests in which the
Company issued 207,366 shares of the Company's common stock in exchange for the
common stock of Monarch. In addition, the Company entered into five-year
non-compete agreements with the prior owners of Monarch totaling $400,000. The
merger added approximately 2,900 customers in the Vandalia, Illinois area. The
Company has not restated prior years' financial statements due to
immateriality.
On July 19, 1996, the Company and Atmos Energy Corporation (Atmos)
entered into a definitive agreement whereby the Company will be merged with and
into Atmos, with Atmos as the surviving corporation. Under the definitive
agreement, one share of Atmos stock will be exchanged for each share of the
Company's stock. The transaction is expected to be accounted for as a pooling
of interests. Subject to approval by the shareholders of both companies and
the appropriate regulatory bodies, the transaction is expected to be completed
by March 31, 1997. Atmos is based in Dallas, Texas, and currently provides
natural gas service to approximately 673,000 customers in Texas, Colorado,
Kansas, Missouri, Louisiana and Kentucky.
7
<PAGE> 8
On August 1, 1996, Southern Union Company (Southern Union) filed a
Schedule 13D with the Securities and Exchange Commission reporting that it
owned 6.5% of the Company's outstanding common stock. On August 6, 1996, the
Company and Atmos filed a joint complaint with the Missouri Public Service
Commission against Southern Union alleging that Southern Union's purchases of
the Company's common stock violated a Missouri statute which requires prior
approval of the Missouri Public Service Commission for any public utility in
Missouri to acquire the stock of another public utility in Missouri. The
complaint asks for a declaration, among other things, that the purchases of the
Company's stock by Southern Union be declared null and void and that Southern
Union be prohibited from further purchases of the Company's stock.
Certain reclassifications were made conforming prior year's financial
statements with 1996 financial statement presentation.
8
<PAGE> 9
UNITED CITIES GAS COMPANY AND SUBSIDIARIES
Item 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
OVERVIEW
The Company's 1996 second quarter common stock loss was
$3,112,000 compared to the second quarter 1995 loss of $3,962,000.
The loss per common share in the second quarter of 1996 was $.24 on an
additional 1,856,000 average number of shares outstanding compared to
the loss of $.35 for the comparable period in 1995. Common stock
earnings for the six month period ended June 30, 1996, were
$14,411,000 compared to $9,365,000 for the six month period ended June
30, 1995. Common stock earnings per share increased from $.86 in the
six month period in 1995 to $1.11 in the six month period in 1996.
Average shares outstanding increased by 2,070,000 for the six month
period ended June 30, 1996. Common stock earnings for the twelve
month period ended June 30, 1996, were $14,981,000 compared to
$10,542,000 for the twelve month period ended June 30, 1995. Common
stock earnings per share increased from $.99 in the twelve month
period in 1995 to $1.17 in the twelve month period in 1996. Average
shares outstanding increased by 2,119,000 for the twelve month period
ended June 30, 1996.
The following table summarizes certain information regarding
the operation of each segment of the Company's business for the
periods ended June 30:
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED TWELVE MONTHS ENDED
------------------- ---------------- -------------------
1996 1995 1996 1995 1996 1995
---- ---- ---- ---- ---- ----
(Unaudited, in thousands)
<S> <C> <C> <C> <C> <C> <C>
OPERATING REVENUES:
Utility......................................... $60,698 $42,246 $205,407 $148,252 $329,015 $256,693
------- ------- -------- -------- -------- --------
Subsidiaries:
UCG Energy Corporation-
Propane Division............................ 3,124 1,825 19,992 10,843 33,801 20,548
Rental Division............................. 1,049 1,586 2,168 3,117 5,010 6,309
Utility Services Division................... 15,717 1,033 16,402 2,867 17,357 8,628
------- ------- -------- -------- -------- --------
Total UCG Energy Corporation.............. 19,890 4,444 38,562 16,827 56,168 35,485
United Cities Gas Storage Company............. 882 1,145 3,871 3,028 8,286 5,398
------- ------- -------- -------- -------- --------
Total Subsidiaries........................ 20,772 5,589 42,433 19,855 64,454 40,883
------- ------- -------- -------- -------- --------
Total Operating Revenues........................ $81,470 $47,835 $247,840 $168,107 $393,469 $297,576
======= ======= ======== ======== ======== ========
COMMON STOCK EARNINGS (LOSS):
Utility......................................... $(2,850) $(3,812) $ 11,823 $ 7,291 $ 10,277 $ 6,475
------- ------- -------- -------- -------- --------
Subsidiaries:
UCG Energy Corporation-
Propane Division............................ (813) (791) 770 395 1,499 819
Rental Division............................. 295 425 654 859 1,487 1,863
Utility Services Division................... 29 62 768 515 887 781
------- ------- -------- -------- -------- --------
Total UCG Energy Corporation.............. (489) (304) 2,192 1,769 3,873 3,463
United Cities Gas Storage Company............. 227 154 396 305 831 604
------- ------- -------- -------- -------- --------
Total Subsidiaries........................ (262) (150) 2,588 2,074 4,704 4,067
------- ------- -------- -------- -------- --------
Total Common Stock Earnings (Loss).............. $(3,112) $(3,962) $ 14,411 $ 9,365 $ 14,981 $ 10,542
======= ======= ======== ======== ======== ========
</TABLE>
OPERATING RESULTS-UTILITY
The utility loss decreased by $962,000 for the second quarter
and utility earnings increased $4,532,000 and $3,802,000,
respectively, for the six and twelve month periods in 1996 from the
comparable 1995 periods due predominantly to the factors mentioned
below.
The operating margin for the second quarter increased from
$18,223,000 in 1995 to $20,826,000 in 1996. The operating margin for
the six month period ended June 30, 1996, was $71,732,000 compared to
$62,307,000 for the same period in 1995, and the margin increased
$14,295,000 to $122,109,000 for the twelve months ended June 30, 1996.
The increase in all periods is a result of the colder weather in 1996
as compared to 1995; rate increases in Kansas, Virginia, Missouri,
Tennessee and Iowa; the acquisition of Monarch Gas Company; and
volumes sold to new residential and commercial natural gas customers.
The increase in the six and twelve month periods was also a result of
the additional revenues derived from penalties incurred by certain
interruptible customers who elected not to go off the Company's system
when curtailed during the first quarter of 1996.
9
<PAGE> 10
ITEM 2. CONTINUED
Operations and maintenance expenses other than natural gas
cost increased $573,000, $1,583,000 and $5,987,000, respectively, in
the three, six and twelve month periods ended June 30, 1996, from the
comparable 1995 periods, primarily due to increased payroll and
related benefits, expenses related to the consolidation of various
division and corporate functions, and the additional operations and
maintenance expenses of Monarch Gas Company. In addition, the
increase in operations and maintenance expenses in the twelve month
period can be attributed to additional expenses resulting from the
consolidation of operations in the Company's Virginia/East Tennessee
Division in the third quarter of 1995.
Depreciation and amortization expense and other taxes
increased in the second quarter, six and twelve month periods ended
June 30, 1996, as compared to the same periods in 1995, primarily due
to additional plant in service. Federal and state income taxes varied
in all periods in relation to changes in income.
Other utility income, net of tax decreased in the second
quarter of 1996, as compared to the same period in 1995, as a result
of an adjustment in the second quarter of 1995 to recognize revenues
related to the release over the previous several months of the
Company's excess firm capacity on the pipeline which serves the
Company's Kansas operation. The recognition of these revenues is
allowed by the Kansas Corporation Commission. This decrease was
partially offset by increased interest income on deferred gas costs
that are to be billed in the future and increased revenues from an
incentive rate program in Tennessee. Effective April 1996, the
Tennessee Public Service Commission issued an order which raised the
amount of gains or losses to be recognized by the Company as a result
of the incentive rate program from a maximum of $25,000 per month to
$600,000 per year. Other utility income, net of tax increased in the
six and twelve month periods from the previous year periods primarily
as a result of revenues from the incentive rate program in Tennessee
and increased interest income on deferred gas costs that are to be
billed in the future, partially offset by decreased revenues generated
by the release of the Company's excess firm capacity on the pipelines
which serve the Company. In the twelve month period, the increase in
other utility income, net of tax can also be attributed to a $171,000
credit made in September 1995 for the capitalization of the equity
portion of the allowance for funds used during construction (AFUDC) of
a twenty-eight mile main in Middle Tennessee.
Interest expense remained constant in the three and six month
periods ended June 30, 1996, as compared to the same periods in 1995.
In both periods the decrease in interest on short-term debt
outstanding was offset by interest on increased long-term debt.
Interest expense decreased in the twelve month period ended June 30,
1996, as compared to the same period in 1995, because of less interest
on short-term debt outstanding and a $349,000 reduction to interest
expense related to the capitalization of the debt portion of the AFUDC
of a twenty-eight mile main in Middle Tennessee. This decrease was
slightly offset by interest on increased long-term debt.
The table below reflects operating revenues, natural gas
through-put and weather data for the periods ended June 30:
OPERATING STATISTICS-UTILITY
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED TWELVE MONTHS ENDED
------------------- ---------------- -------------------
1996 1995 1996 1995 1996 1995
---- ---- ---- ---- ---- ----
(Unaudited, in thousands)
<S> <C> <C> <C> <C> <C> <C>
UTILITY OPERATING REVENUES:
Residential.................. $23,156 $16,424 $ 98,564 $ 71,090 $155,077 $117,877
Commercial................... 15,630 9,786 56,210 39,023 88,154 65,871
Industrial................... 17,625 13,642 39,403 32,665 67,513 63,268
Transportation............... 2,381 1,815 5,231 3,917 9,418 7,788
Other Revenues............... 1,906 579 5,999 1,557 8,853 1,889
------- ------- -------- -------- -------- --------
Total................... $60,698 $42,246 $205,407 $148,252 $329,015 $256,693
======= ======= ======== ======== ======== ========
NATURAL GAS THROUGH-PUT (MCF):
Residential.................. 3,006 2,645 15,687 13,011 25,577 20,810
Commercial................... 2,507 2,143 9,778 8,388 16,555 13,944
Industrial-
Firm....................... 1,415 1,691 3,855 4,122 7,058 7,720
Interruptible.............. 2,653 2,658 5,677 6,013 11,583 11,589
------- ------- -------- -------- -------- --------
9,581 9,137 34,997 31,534 60,773 54,063
Transportation............... 4,383 3,865 8,741 8,148 17,777 14,811
------- ------- -------- -------- -------- --------
Total................... 13,964 13,002 43,738 39,682 78,550 68,874
======= ======= ======== ======== ======== ========
WEATHER DATA-COLDER (WARMER)
than normal*................. ** ** 7.5% (10.7%) 8.9% (14.4%)
======= ======= ======== ======== ======== ========
</TABLE>
*Based on system weighted average. Data for 1996 is preliminary.
**Not meaningful for second quarter.
10
<PAGE> 11
ITEM 2. CONTINUED
OPERATING RESULTS-NON-UTILITY
Revenues of UCG Energy Corporation (UCG Energy) increased
$15,446,000, $21,735,000 and $20,683,000, respectively, in the second
quarter, six and twelve month periods ended June 30, 1996, as compared
to the same periods in 1995. Revenues in the utility services
division increased in all periods as a result of increased gas
brokerage sales to Woodward Marketing, L.L.C. (WMLLC). The propane
division's revenues increased in all periods due to increased retail
and wholesale volumes sold and increased transport revenues, both due
to colder than normal weather, and as a result of the acquisitions of
Transpro South, Inc., in May 1995 and Duncan Gas Service in January
1996. The propane division's revenues also increased in the twelve
month period as a result of the acquisition of Harrell Propane, Inc.,
in January 1995. The rental division's revenues decreased in all
periods due to the transfer of certain rental units to the parent
company.
Expenses of UCG Energy, including cost of sales, increased
$15,789,000, $21,631,000 and $20,422,000, respectively, in the second
quarter, six and twelve month periods ended June 30, 1996, as compared
to the same periods in 1995. Expenses of the utility services
division increased in all periods as a result of increased cost of
sales from increased gas brokerage activities. Expenses increased in
all periods in the propane division principally as a result of the
cost of increased propane volumes sold and increased administrative
and general expenses, both due to colder than normal weather, and the
acquisitions of Transpro South, Inc., and Duncan Gas Service. In
addition, expenses of the propane division increased in the twelve
month period as a result of the acquisition of Harrell Propane, Inc.
Expenses increased only slightly in all periods from the previous year
in the rental division.
Other income, net of UCG Energy increased $87,000, $677,000
and $1,348,000, respectively, in the second quarter, six and twelve
month periods ended June 30, 1996, as compared to the previous year
periods. The increase in the second quarter was the result of
increased income from investments in natural gas and oil exploration
and production projects. The increase in the six and twelve month
periods was primarily the result of increased investment income from
WMLLC. Investment income from WMLLC, before income taxes, was
$116,000, $1,383,000 and $1,989,000, respectively, for the second
quarter, six and twelve month periods ended June 30, 1996.
UCG Energy's net loss increased $185,000 in the second quarter
while net income increased $423,000 and $410,000 in the six and twelve
month periods ended June 30, 1996, as compared to the same periods in
1995. The increase in the net loss for the second quarter can be
attributed to the transfer of certain rental units from the rental
division to the parent company at the end of 1995 and the associated
loss of rental income, partially offset by decreased depreciation
expense related to those rental units. The increase in net income in
the six month period is due to a combination of increased investment
income from WMLLC and increased sales in the propane division. The
increase in net income for the twelve month period can largely be
attributed to increased sales in the propane division, partially
offset by decreased rental income in the rental division. In the
utility services division, the increase in investment income from
WMLLC for the twelve month period was partially offset by increased
amortization and interest expenses related to that investment.
Effective January 1, 1996, United Cities Propane Gas of
Tennessee, Inc. (UCPT), a subsidiary of UCG Energy, purchased
substantially all of the propane assets of Duncan Gas Service for
approximately $4,310,000. In addition, UCPT entered into a ten-year
non-compete agreement with the prior owners for $250,000. This
acquisition added approximately 2,000 customers in the Johnson City,
Tennessee area.
United Cities Gas Storage Company had net income for the
three, six and twelve month periods of $227,000, $396,000 and
$831,000, respectively, as compared to $154,000, $305,000 and $604,000
for the same periods in 1995. The revenues of the subsidiary were
primarily derived from natural gas storage services and natural gas
provided to United Cities Gas Company.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
Total cash provided by operations for the three, six and
twelve month periods ended June 30, 1996, was $6,601,000, $53,605,000
and $33,605,000, respectively. Changes in accounts receivable, gas in
storage and accounts payable were primarily a result of the weather
sensitive nature of the Company's business. Changes in gas costs to
be billed in the future and supplier refunds due customers were
primarily a result of the timing of the recoveries from, or refunds
to, customers of these costs through the Purchased Gas Adjustment
mechanism.
11
<PAGE> 12
ITEM 2. CONTINUED
The financing activities for the three, six and twelve month
periods reflect the retirement of long-term debt, dividend payments,
the issuance of stock through the Company's various stock purchase
plans and the net activity of short-term borrowings. In addition, the
financing activities of the twelve month period reflect $22,000,000 of
medium-term notes and a $5,000,000 term note in UCPT that were issued
in the last quarter of 1995. The proceeds of these activities were
used to repay short-term borrowings, retire long-term debt, finance
the Company's construction program and for other corporate purposes.
The Company had authorized as of June 30, 1996, specific
purchases and construction projects amounting to $15,326,000 of its
1996 utility capital budget of $29,000,000 and $6,429,000 of its
non-utility capital budget of $7,800,000.
Effective January 1, 1996, the Company adopted Statement of
Financial Accounting Standards No. 121 (SFAS 121), "Accounting for the
Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed
Of." This statement imposes stricter criteria for regulatory assets
by requiring that such assets be probable of future recovery at each
balance sheet date. Because of the regulatory structure in which the
Company operates, the adoption of SFAS 121 did not have a material
effect on the results of operations, financial condition or cash flows
of the Company.
Effective January 1, 1996, the Company adopted Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation." For fiscal years beginning after December 15, 1995,
this statement requires new disclosures in the notes to the financial
statements about stock-based compensation plans based on the fair
value of equity instruments granted. Companies also may base the
recognition of compensation cost for instruments issued under
stock-based compensation plans on these fair values. The Company did
not change the method of accounting for these plans.
As a result of an election held on March 29, 1996, 20
employees in Hannibal, Missouri will be represented by a union. On
April 19, 1996, an election was held in Columbus, Georgia for 97
employees to determine whether they would be represented by a union.
The results of that election are pending the outcome of an
administrative hearing.
Effective May 17, 1996, the Company received an annual rate
increase of $410,000 in the state of Iowa. The Company had filed to
increase rates by $750,000 on an annual basis. Included in the rate
increase was the recovery of $1,787,000 over a ten-year period related
to the Company's agreement with Union Electric Company (Union
Electric) whereby Union Electric agreed to assume responsibility for
the Company's continuing investigation and environmental response
action obligations as outlined in the feasibility study pertaining to
a manufactured gas plant site in Keokuk, Iowa.
On May 31, 1996, the Company filed to increase rates on an
annual basis by $5,000,000 in the state of Georgia. The Company
expects that any increase granted will be effective by the end of
1996.
On June 28, 1996, Monarch Gas Company (Monarch) was merged
into the Company. The merger was accounted for as a pooling of
interests in which the Company issued 207,366 shares of the Company's
common stock in exchange for the common stock of Monarch. In
addition, the Company entered into five-year non-compete agreements
with the prior owners of Monarch totaling $400,000. The merger added
approximately 2,900 customers in the Vandalia, Illinois area. The
Company has not restated prior years' financial statements due to
immateriality.
On July 19, 1996, the Company and Atmos Energy Corporation
(Atmos) entered into a definitive agreement whereby the Company will
be merged with and into Atmos, with Atmos as the surviving
corporation. Under the definitive agreement, one share of Atmos stock
will be exchanged for each share of the Company's stock. The
transaction is expected to be accounted for as a pooling of interests.
Subject to approval by the shareholders of both companies and the
appropriate regulatory bodies, the transaction is expected to be
completed by March 31, 1997. Atmos is based in Dallas, Texas, and
currently provides natural gas service to approximately 673,000
customers in Texas, Colorado, Kansas, Missouri, Louisiana and
Kentucky.
12
<PAGE> 13
ITEM 2. CONTINUED
On August 1, 1996, Southern Union Company (Southern Union)
filed a Schedule 13D with the Securities and Exchange Commission
reporting that it owned 6.5% of the Company's outstanding common
stock. On August 6, 1996, the Company and Atmos filed a joint
complaint with the Missouri Public Service Commission against Southern
Union alleging that Southern Union's purchases of the Company's common
stock violated a Missouri statute which requires prior approval of the
Missouri Public Service Commission for any public utility in Missouri
to acquire the stock of another public utility in Missouri. The
complaint asks for a declaration, among other things, that the
purchases of the Company's stock by Southern Union be declared null
and void and that Southern Union be prohibited from further purchases
of the Company's stock.
The Company believes its short-term lines of credit are
sufficient to meet anticipated short-term requirements. At June 30,
1996, the Company had $93,000,000 in short-term lines of credit,
including master and banker's acceptance notes, bearing interest
primarily at the lesser of the prime rate or a negotiated rate during
the term of each borrowing. Under these arrangements, $9,404,000 in
short-term debt was outstanding at June 30, 1996.
13
<PAGE> 14
UNITED CITIES GAS COMPANY AND SUBSIDIARIES
PART II. OTHER INFORMATION
FOR THE SIX MONTHS ENDED JUNE 30, 1996
ITEM 1. LEGAL PROCEEDINGS.
See December 31, 1995 Form 10-K and Part I of this filing.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The annual meeting of Shareholders was held May 3, 1996. The
matters voted upon were as follows:
Proposal 1. The shareholders elected Jerry H. Ballengee,
Richard W. Cardin, Vincent J. Lewis and
Stirton Oman, Jr. to serve the Company as
directors for a three-year term. Dale A.
Keasling was elected to serve as a director
for a two-year term. Directors of the
Company who are continuing their terms are
Dwight C. Baum, Thomas J. Garland, Gene C.
Koonce and George C. Woodruff, Jr. (See
Amended By-laws of the Company filed with
this report as Exhibit 3.02)
Proposal 2. The shareholders approved an amendment to the
Company's Articles of Incorporation
concerning directors' liability. (See
Amended Articles of Incorporation of the
Company filed with this report as Exhibit
3.01)
The results of the voting for each proposal were as follows:
<TABLE>
<CAPTION>
FOR AGAINST WITHHELD NON-VOTE
--- ------- -------- --------
<S> <C> <C> <C> <C> <C>
Proposal 1. Ballengee 10,838,126 - 235,913 -
Cardin 10,835,838 - 238,200 1
Keasling 10,830,211 - 243,828 -
Lewis 10,853,059 - 220,979 1
Oman 10,844,773 - 229,266 -
Proposal 2. 10,571,702 331,691 157,190 13,456
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits-See list of Exhibits on page 15 hereof.
(b) The following Form 8-Ks were filed during the quarter
ended June 30, 1996:
1. Form 8-K, Item 5 dated May 6, 1996.
2. Form 8-K, Item 5 dated May 29, 1996.
3. Form 8-K, Item 5 dated June 3, 1996.
14
<PAGE> 15
UNITED CITIES GAS COMPANY AND SUBSIDIARIES
LIST OF EXHIBITS
3.01 Amended Articles of Incorporation of Company as Amended May 3,
1996.
3.02 Amended By-Laws of Company as Amended May 3, 1996.
12.01 Computation of Ratio of Consolidated Earnings to Fixed Charges.
27.1 Financial Data Schedule
Restated March 31, 1996 (for SEC use only)
27.2 Financial Data Schedule (for SEC use only)
15
<PAGE> 16
UNITED CITIES GAS COMPANY AND SUBSIDIARIES
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.
UNITED CITIES GAS COMPANY
/s/ Adrienne H. Brandon
----------------------------
Adrienne H. Brandon
Vice President and Controller
On behalf
of the Registrant
Date: August 9, 1996
16
<PAGE> 1
EXHIBIT 3.01
As Amended Through
May 3, 1996
UNITED CITIES GAS COMPANY
AMENDED ARTICLES OF INCORPORATION
(A Public Service Company Incorporated
under the Laws of Illinois and Virginia)
ARTICLE ONE
The name of the corporation is: United Cities Gas Company.
ARTICLE TWO
The address of its present registered office in the State of Illinois is
33 North LaSalle Street, in the City of Chicago 60602, County of Cook, and the
name of its Registered Agent at said address is: United States Corporation
Company. The address of its present registered office in the Commonwealth of
Virginia is 707 E. Main Street, Richmond, Virginia 23212, and the name of its
Registered Agent is Richard D. Gary, who is a resident of Virginia, whose
business address is the same as the address of the registered office, and who
is a member of the Virginia State Bar.
ARTICLE THREE
The duration of the corporation is perpetual.
ARTICLE FOUR
The purpose or purposes for which the corporation is organized are, as a
public service company, to manufacture, buy, distribute and sell natural and/or
artificial gas for light, heat, power, refrigeration and other purposes for
which the same may now or at any time hereafter be used, and also to sell the
by-products and residual products therefrom, and to construct or in any manner
acquire and to maintain, operate, mortgage, sell and in any manner dispose of
works, equipment, appliances and facilities therefor or for use in connection
therewith; to construct, lay, purchase or in any manner acquire and to maintain
and operate, and to sell, encumber or in any manner dispose of pipe lines and
gas mains for the sale, distribution and transportation of natural and/or
artificial gas for the purposes aforesaid in, over, through or under
1
<PAGE> 2
any streets, alleys, roads, highways, or other public places, and in,
over, through or under any private or public property.
ARTICLE FIVE
Paragraph 1: The aggregate number of shares which the corporation is
authorized to issue is 40,200,000, divided into two classes consisting of
200,000 shares designated as Preferred Stock, without par value, issuable in
series as hereinafter provided, (hereinafter referred to as the "Preferred
Stock"), and 40,000,000 shares designated as Common Stock, without par value
(hereinafter referred to as the "Common Stock").
Paragraph 2: The preferences, qualifications, limitations, restrictions,
and the special or relative rights in respect of the shares of each class
hereinabove designated shall be as follows:
SECTION 1. Issuance of Preferred in Series. The Preferred Stock may be
divided into and issued from time to time as shares of one or more series, each
series to be appropriately designated by a distinguishing number, letter, or
title prior to the issue of any shares thereof. The Preferred Stock of all
series shall be of the same class and of equal rank and shall be identical
except as to the terms that may be fixed by the Board of Directors as
hereinafter in this Section 1 provided. All shares of each series shall be
alike in every particular. Before any shares of Preferred Stock of any series
shall be issued, the Board of Directors shall fix and is hereby expressly
empowered to fix, in the manner provided by law, the following relative rights
and preferences, in respect of any or all of which there may be variations
between different series:
(i) The designation of such series and the number of shares which
shall constitute such series, which number may, unless the authorized
number of shares of such series shall be limited, be increased or
decreased (but not below the number of shares thereof, if any, then
outstanding) from time to time by like action of the Board of Directors;
(ii) The rate of dividend;
(iii) The price at and the terms and conditions on which shares may
be redeemed;
(iv) The amount payable on shares of such series in the event of any
voluntary liquidation, dissolution or winding up of the affairs of the
corporation;
(v) Any sinking fund provisions for the redemption or purchase of
shares;
(vi) The terms and conditions on which shares may be converted, if
the shares of any series are issued with the privilege of conversion;
(vii) Any special voting rights providing for the required approval
of a specified proportion of the shares of any series for any specified
corporate action;
2
<PAGE> 3
so far as not inconsistent with the provisions of this Article Five applicable
to all series of Preferred Stock. Shares of Preferred Stock shall be issued
only as full-paid and nonassessable shares.
All or any shares of any series of Preferred Stock at any time redeemed,
purchased or acquired by the corporation shall be canceled in accordance with
law and shall not be reissued as shares of the same series, but shall become
authorized and unissued shares of Preferred stock undesignated as to series.
SECTION 2. Dividends. Out of any source lawfully available for the
payment of dividends, as and when declared by the Board of Directors, the
holders of Preferred Stock of each series shall be entitled to receive
dividends at, but not exceeding, the maximum dividend rate fixed for such
series and expressed in the certificates therefore, payable at the times fixed
for such series and expressed in the certificates therefore, and accruing from
the date of original issue of each share of such stock, before any dividends
shall be declared or paid or set apart for payment on Common Stock and before
any sum shall be paid or set apart for the purchase or redemption of any
Preferred Stock.
After full dividends on Preferred Stock for all past dividend periods and
for the then current dividend period shall have been declared and paid, or set
apart for payment, then, and not otherwise, dividends may be declared and paid
out of any remaining source lawfully available for the payment thereof upon the
Common Stock, share and share alike, to the exclusion of the holders of
Preferred Stock.
SECTION 3. Liquidation, Dissolution or Winding Up. In the event of any
voluntary liquidation, dissolution or winding up of the affairs of the
corporation, the holders of the Preferred Stock of each series shall be
entitled to receive in cash for each share thereof the amount fixed for the
respective series as herein provided, with an amount equal to any accrued and
unpaid dividends thereon to the date fixed for such payment, before any
distribution of the assets shall be made to the holders of Common Stock. After
such payment shall have been made in full to the holders of the outstanding
Preferred Stock or funds necessary for such payment shall have been set aside
by the corporation in trust for the account of the holders of the outstanding
Preferred Stock so as to be and continue available therefor, the remaining
assets of the corporation shall be divided and distributed among the holders of
the Common Stock ratably, share and share alike. If, upon such liquidation,
dissolution or winding-up, the assets of the corporation distributable
aforesaid among the holders of the Preferred Stock shall be insufficient to
permit the payment to them of said amount, the entire assets shall be
distributed ratably according to their respective interest among the holders of
the Preferred Stock. A consolidation or merger of the corporation or any
purchase or redemption of the stock of the corporation or any purchase or
redemption of stock of the corporation of any class shall not be regarded as a
liquidation, dissolution or winding up of the affairs of the corporation within
the meaning of this Section 3.
3
<PAGE> 4
SECTION 4. Common Stock. Subject to the foregoing provisions of this
Article Five, such dividends (payable in cash, stock or otherwise) as may be
determined by the Board of Directors may be declared and paid out of funds
legally available therefore upon the Common Stock of the corporation from time
to time.
In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the corporation, after payment to the holders of
Preferred Stock of the amounts to which they are entitled as hereinbefore
provided, the holders of the Common Stock shall be entitled to share ratably in
all assets then remaining subject to distribution to the shareholders.
SECTION 5. No Pre-Emptive Rights. No holder of any shares of the capital
stock of the corporation shall be entitled as of right to purchase or subscribe
for any unissued stock of any class or any additional shares of any class to be
issued by reason of any increase of the authorized capital stock of this
corporation of any class, or bonds, certificates of indebtedness, debentures or
other securities convertible into stock of this corporation of any class, or
bonds, certificates of indebtedness debentures or other securities convertible
into stock of this corporation or carrying any right to purchase stock of any
class, but any such unissued stock or such additional authorized issue of any
stock or of other securities convertible into stock, or carrying any right to
purchase stock, may be issued and disposed of pursuant to resolution of the
Board of Directors to such persons, firms, corporations or associations and
upon such terms as may be deemed advisable by the Board of Directors in the
exercise of its discretion.
SECTION 6. Voting Rights. Each outstanding share, regardless of class,
shall be entitled to one vote on each matter submitted to a vote at a meeting
of shareholders.
In all elections for directors every stockholder shall have the right to
vote, in person or by proxy, for the number of shares owned by him, for as many
persons as there are directors to be elected or to cumulate said shares, and
give one candidate as many votes as the number of directors multiplied by the
number of his shares shall equal, or to distribute them on the same principle
among as many candidates as he shall think fit.
ARTICLE SIX
The total number of Directors which constitutes the Board of Directors
shall be fixed by the By-Laws. The Board of Directors shall be divided into
three classes: Class I, Class II and Class III, which shall be as nearly equal
in number as possible. Each Director shall serve for a term ending on the date
of the third annual meeting of shareholders following the annual meeting at
which such Director was elected; provided, however, that each initial Director
in Class I shall hold office until the annual meeting of shareholders in 1986;
each initial Director in Class II shall hold office until the annual meeting of
shareholders in 1987; and each initial Director in Class III shall hold office
until the annual meeting of shareholders in 1988. At least three Directors
shall be
4
<PAGE> 5
elected in each year. In the event of any increase or decrease in the
authorized number of Directors, (1) each Director then serving as such shall
nevertheless continue as a Director of the class of which he is a member until
the expiration of his current term, or his earlier resignation, removal from
office or death, and (2) the newly created or eliminated directorships
resulting from such increase or decrease shall be apportioned by the Board of
Directors among the three classes of Directors so as to maintain such classes
as nearly equal as possible. At all meetings of the Board of Directors a
majority of Directors shall be necessary and sufficient to constitute a quorum
for the transaction of business, and the act of a majority of the Directors
present at any meeting at which there is a quorum shall be the act of the Board
of Directors, except as may be otherwise specifically provided by statute or by
these Articles of Incorporation and except that any sale, lease, exchange,
transfer or other disposition (in one transaction or a series of transactions
occurring within a twelve-month period) of any assets of the corporation or any
subsidiary of the corporation having an aggregate book value greater than ten
percent (10%) of the book value of all the assets of the corporation shall
require the affirmative vote of at least 66-2/3% of the number of the entire
Board of Directors as designated in the By-Laws.
ARTICLE SEVEN
SECTION 1. Vote Required for Certain Business Combinations.
A. Higher Vote for Certain Business Combinations. In addition to
any affirmative vote required by law or these Articles of Incorporation,
and except as otherwise expressly provided in Section 2 of this Article
Seven:
(i) any merger or consolidation of the corporation or any
Subsidiary (as hereinafter defined) with (a) any Interested
Shareholder (as hereinafter defined) or (b) any other corporation
(whether or not itself an Interested Shareholder) which is, or
after such merger or consolidation would be, an Affiliate (as
hereinafter defined) of an Interested Shareholder; or
(ii) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of transactions)
to or with any Interested Shareholder or any Affiliate of any
Interested Shareholder of a major part of the assets of the
corporation or any Subsidiary; or
(iii) the issuance or transfer by the corporation or any
Subsidiary of any securities of the corporation or any Subsidiary
to any Interested Shareholder or any Affiliate of any Interested
Shareholder in exchange for cash, securities or other property; or
(iv) the adoption of any plan or proposal for the liquidation
or dissolution of the corporation proposed by or on behalf of an
Interested Shareholder or any Affiliate of any Interested
Shareholder; or
5
<PAGE> 6
(v) any reclassification of securities (including any reverse
stock split), or recapitalization of the corporation, or any merger
or consolidation of the corporation with any of its Subsidiaries or
any other transaction (whether or not with or into or otherwise
involving an Interested Shareholder) which has the effect, directly
or indirectly, of increasing the proportionate share of the
outstanding shares of any class of equity or convertible securities
of the corporation or any Subsidiary which is directly or
indirectly owned by any Interested Shareholder or any Affiliate of
any Interested Shareholder;
shall require the affirmative vote of the holders of at least 80% of the
voting power of the then outstanding shares of capital stock of the
corporation entitled to vote generally in the election of directors (the
"Voting Stock"), voting together as a single class. Such affirmative
vote shall be required notwithstanding the fact that no vote may be
required, or that a lesser percentage may be specified, by law or in any
agreement with any national securities exchange or otherwise.
B. Definition of "Business Combination." The term "Business
Combination" as used in this Article Seven shall mean any transaction
which is referred to in any one or more of clauses (i) through (v) of
paragraph A of this Section 1.
SECTION 2. When Higher Vote is Not Required. The provisions of
Section 1 of this Article Seven shall not be applicable to any particular
Business Combination, and such Business Combination shall require only such
affirmative vote as is required by law and any other provision of these
Articles of Incorporation, if all of the conditions specified in either of the
following paragraphs A and B are met:
A. Approval by Disinterested Directors. The Business Combination
shall have been approved by all of the Disinterested Directors (as
hereinafter defined).
B. Price and Procedure Requirements. All of the following
conditions shall have been met:
(i) The aggregate amount of the cash and the Fair Market Value
(as hereinafter defined) as of the date of the consummation of the
Business Combination of consideration other than cash to be
received per share by holders of common stock in such Business
Combination shall be at least equal to the higher of the following:
(a) (if applicable) the highest per share price
(including any brokerage commissions, transfer taxes and
soliciting dealers' fees) paid by the Interested Shareholder
for any shares of common stock acquired by it (1) within the
two-year period immediately prior to the first public
announcement of the proposal of the Business Combination (the
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"Announcement Date") or (2) in the transaction in which it be
came an Interested Shareholder, whichever is higher;
(b) the Fair Market Value per share of common stock on
the Announcement Date or on the date on which the Interested
Shareholder became an Interested Shareholder (such latter
date is referred to in this Article Seven as the
"Determination Date"), whichever is higher; and
(c) (if applicable) the price per share equal to the
Fair Market Value per share of common stock determined
pursuant to the immediately preceding clause (b), multiplied
by the ratio of (x) the highest per share price (including
any brokerage commissions, transfer taxes and soliciting
dealers' fees) paid by or on behalf of the Interested
Shareholder for any shares acquired by it within the two-year
period immediately prior to the Announcement Date to (y) the
Fair Market Value per share of common stock on the first day
in such two-year period on which the Interested Shareholder
acquired beneficial ownership of any share of common stock.
(ii) The aggregate amount of the cash and the Fair Market
Value as of the date of the consummation of the Business
Combination of consideration other than cash to be received per
share by holders of shares of any other class of outstanding Voting
Stock shall be at least equal to the highest of the following (it
being intended that the requirements of this paragraph B (ii) shall
be required to be met with respect to every class of outstanding
Voting Stock, whether or not the Interested Shareholder has
previously acquired any shares of a particular class of Voting
Stock):
(a) (if applicable) the highest per share price
(including any brokerage commissions, transfer taxes and
soliciting dealers' fees) paid by the Interested Shareholder
for any shares of such class of Voting Stock acquired by it
(1) within the two-year period immediately prior to the
Announcement Date or (2) in the transaction in which it
became an Interested Shareholder, whichever is higher;
(b) (if applicable) the highest preferential amount per
share to which the holders of shares of such class of Voting
Stock are entitled in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the
corporation; and
(c) the Fair Market Value per share of such class of
Voting Stock on the Announcement Date or on the Determination
Date, whichever is higher.
(iii) The consideration to be received by holders of a
particular class of outstanding Voting Stock (including Common
Stock) shall be in cash or in the
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same form as the Interested Shareholder has previously paid for
shares of such class of Voting Stock. If the Interested
Shareholder has paid for shares of any class of Voting Stock with
varying forms of consideration, the form of consideration for such
class of Voting Stock shall be either cash or the form used to
acquire the largest number of shares of such class of Voting Stock
previously acquired by it. The price determined in accordance with
paragraphs B (i) and B (ii) of this Section 2 shall be subject to
appropriate adjustment in the event of any stock dividend, stock
split, combination of shares or similar event.
(iv) After such Interested Shareholder has become an
Interested Shareholder and prior to the consummation of such
Business Combination: (a) except as approved by all of the
Disinterested Directors, there shall have been no failure to
declare and pay at the regular date therefor any full quarterly
dividends (whether or not cumulative) on the outstanding preferred
stock; (b) there shall have been (1) no reduction in the annual
rate of dividends paid on the common stock (except as necessary to
reflect any subdivision of the common stock), except as approved by
all of the Disinterested Directors, and (2) an increase in such
annual rate of dividends as necessary to reflect any
reclassification (including any reverse stock split),
recapitalization, reorganization or any similar transaction which
has the effect of reducing the number of outstanding shares of the
common stock, unless the failure so to increase such annual rate is
approved by all of the Disinterested Directors; and (c) such
Interested Shareholder shall have not become the beneficial owner
of any additional shares of Voting Stock except as part of the
transaction which results in such Interested Shareholder becoming
an Interested Shareholder.
(v) After such Interested Shareholder has become an Interested
Shareholder, such Interested Shareholder shall not have received
the benefit, directly or indirectly (except proportionately as a
shareholder), of any loans, advances, guarantees, pledges or other
financial assistance or any tax credits or other tax advantages
provided by the corporation, whether in anticipation of or in
connection with such Business Combination or otherwise.
(vi) A proxy or information statement describing the proposed
Business Combination and complying with the requirements of the
Securities Exchange Act of 1934 and the rules and regulations
thereunder (or any subsequent provisions replacing such Act, rules
or regulations) shall be mailed to shareholders of the corporation
at least 30 days prior to the consummation of such Business
Combination (whether or not such proxy or information statement is
required to be mailed pursuant to such Act or subsequent
provisions).
SECTION 3. Certain Definitions. For the purposes of this Article
Seven:
A. A "person" shall mean any individual, firm, corporation or
other entity.
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B. "Interested Shareholder" shall mean any person (other than the
corporation or any Subsidiary) who or which:
(i) is the beneficial owner, directly or indirectly, of more
than 10% of the voting power of the outstanding Voting Stock; or
(ii) is an Affiliate of the corporation and at any time within
the two-year period immediately prior to the date in question was
the beneficial owner, directly or indirectly, of 10% or more of the
voting power of the then outstanding Voting Stock; or
(iii) is an assignee of or has otherwise succeeded to any
shares of Voting Stock which were at any time within the two-year
period immediately prior to the date in question beneficially owned
by any Interested Shareholder, if such assignment or succession
shall have occurred in the course of a transaction or series of
transactions not involving a public offering within the meaning of
the Securities Act of 1933.
C. A person shall be a "beneficial owner" of any Voting Stock:
(i) which such person or any of its Affiliates or Associates
(as hereinafter defined) beneficially owns, directly or indirectly;
or
(ii) which such person or any of its Affiliates or Associates
has (a) the right to acquire (whether such right is exercisable
immediately or only after the passage of time), pursuant to any
agreement, arrangement or understanding or upon the exercise of
conversion rights, exchange rights, warrants or options, or
otherwise, or (b) the right to vote pursuant to any agreement,
arrangement or understanding; or
(iii) which are beneficially owned, directly or indirectly, by
any other person with which such person or any of its Affiliates or
Associates has any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting or disposing of any shares of
Voting Stock.
D. For the purposes of determining whether a person is an
Interested Shareholder pursuant to paragraph B of this Section 3, the
number of shares of Voting Stock deemed to be outstanding shall include
shares deemed owned through application of paragraph B of this Section 3
but shall not include any other shares of Voting Stock which may be
issuable pursuant to any agreement, arrangement or understanding, or upon
exercise of conversion rights, warrants or options, or otherwise.
E. "Affiliate" or "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as in effect on January 1,
1985.
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F. "Subsidiary" means any corporation of which a majority of any
class of equity security is owned, directly or indirectly, by the
corporation; provided, however, that for the purposes of the definition
of Interested Shareholder set forth in paragraph B of this Section 3, the
term "Subsidiary" shall mean only a corporation of which a majority of
each class of equity security is owned, directly or indirectly, by the
corporation.
G. "Disinterested Director" means any member of the Board of
Directors who is unaffiliated with the Interested Shareholder and was a
member of the Board of Directors prior to the time that the Interested
Shareholder became an Interested Shareholder, and any successor of a
Disinterested Director who is unaffiliated with the Interested
Shareholder and is recommended to succeed a Disinterested Director by all
of the Disinterested Directors then on the Board of Directors.
H. "Fair Market Value" means: (i) in the case of stock, the
highest closing sale price during the 30-day period immediately preceding
the date in question of a share of such stock on the Composite Tape for
New York Stock Exchange-Listed Stocks, or, if such stock is not quoted on
the Composite Tape, on the New York Stock Exchange, or, if such stock is
not listed on such Exchange, on the principal United States securities
exchange registered under the Securities Exchange Act of 1934 on which
such stock is listed, or, if such stock is not listed on any such
exchange, the highest closing bid quotation with respect to a share of
such stock during the 30-day period preceding the date in question on the
National Association of Securities Dealers, Inc. Automated Quotations
System or any system then in use, or if no such quotations are available,
the fair market value on the date in question of a share of such stock as
determined by the Board of Directors in good faith; and (ii) in the case
of property other than cash or stock, the fair market value of such
property on the date in question as determined by the Board of Directors
in good faith.
I. In the event of any Business Combination in which the
corporation survives, the phrase "other consideration to be received" as
used in paragraphs B (i) and (ii) of Section 2 of this Article Seven
shall include the shares of common stock and/or the shares of any other
class of outstanding Voting Stock retained by the holders of such shares.
SECTION 4. Powers of the Board of Directors, No Effect on Board of
Directors Discretion, Etc. A majority of the Directors shall have the power
and duty to determine for the purposes of this Article Seven, on the basis of
information known to them after reasonable inquiry, (A) whether a person is an
Interested Shareholder, (B) the number of shares of Voting Stock beneficially
owned by any person, (C) whether a person is an Affiliate or Associate of
another, (D) whether the assets which are the subject of any Business
Combination constitute a major part of the assets of the corporation or any
Subsidiary. A majority of the Directors shall have the further power to
interpret all of the terms and provisions of this Article Seven. The fact
that any Business Combination complies with the provisions of paragraph B of
Section 2 of this Article Seven shall not be construed to impose any fiduciary
duty, obligation or responsibility on the Board of Directors, or any member
thereof, to approve such Business Combination or
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recommend its adoption or approval to the shareholders of the corporation, nor
shall such compliance limit, prohibit or otherwise restrict in any manner the
Board of Directors, or any member thereof, with respect to evaluations of or
actions and responses taken with respect to such Business Combination.
SECTION 5. No Effect on Fiduciary Obligations of Interested Shareholders.
Nothing contained in this Article Seven shall be construed to relieve any
Interested Shareholder from any fiduciary obligation imposed by law.
SECTION 6. Amendment, Repeal, Etc. Notwithstanding any other provisions
of these Articles of Incorporation or the By-Laws (and notwithstanding the fact
that a lesser percentage may be specified by law, these Articles of
Incorporation or the By-Laws) the affirmative vote of the holders of 80% or
more of the outstanding Voting Stock, voting together as a single class, shall
be required to amend or repeal, or adopt any provisions inconsistent with this
Article Seven.
ARTICLE EIGHT
The By-Laws of the corporation may be made, altered, amended or repealed
only by the affirmative vote of the holders of at least 66-2/3% of the voting
power of the then outstanding capital stock of the corporation entitled to vote
generally in the election of directors voting together as a single class or by
the affirmative vote of 66-2/3% of the number of the entire Board of Directors
as designated in the By-Laws of the corporation in effect at that time.
Special meetings of the shareholders may be called only by the chairman,
by the president, by the secretary, by the board of directors, in the manner
prescribed in the By-Laws by the holders of not less than 20% of all the
outstanding shares entitled to vote on the matter for which the meeting is
called or by such other officers or persons as may be provided in the By-Laws.
The holders of at least 70% of the voting power of the then outstanding
shares of capital stock of the corporation entitled to vote generally in the
election of directors shall be required to constitute a quorum for any meeting
of the shareholders at which a vote upon the removal of one or more directors
is to occur.
Any action required by law to be taken at any annual of special meeting of
the shareholders, or any other action which may be taken at a meeting of the
shareholders, may be taken without a meeting and without a vote, only if a
consent in writing, setting forth the action so taken, shall be signed by all
of the shareholders entitled to vote with respect to the subject matter
thereof.
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ARTICLE NINE
Except where a higher approval and vote is expressly required in Article
Five, Seven or Eight of these Articles of Incorporation, and except where a
higher approval and vote is expressly required by any provision of applicable
law which may not be superseded by a provision of the articles of
incorporation, any provision of applicable law which (a) unless otherwise
provided in the articles of incorporation requires the approval and affirmative
vote of the holders of two-thirds or more of the outstanding shares entitled to
vote on a corporate action or two-thirds or more of the outstanding shares of
any class or series of shares entitled to vote as a class on a corporate
action, including, but not limited to, the following corporate actions: (i)
amendment to the articles of incorporation, (ii) adoption of a plan of merger,
consolidation or share exchange, (iii) sale, lease, exchange or other
disposition of all, or substantially all, of the corporation's properties and
assets other than in the usual and regular course of the corporation's
business, and (iv) dissolution of the corporation, and (b) permits the articles
of incorporation to provide for a lesser approval and affirmative vote, shall
only require the approval and affirmative vote of the holders of a majority of
the outstanding shares entitled to vote on the corporate action, and a majority
of the outstanding shares of each class or series of shares entitled to vote as
a class on the corporate action.
ARTICLE TEN
The directors of the corporation shall not be liable to the corporation or
to the shareholders of the corporation for monetary damages for breach of
fiduciary duty as a director; provided, however, that nothing in this Article
Ten shall be construed to eliminate the liability of a director to the extent
that such elimination or limitation of liability is prohibited under applicable
corporate law.
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EXHIBIT 3.02
AS RESTATED
MAY 3, 1996
BY-LAWS OF
UNITED CITIES GAS COMPANY
OFFICES
1. The principal office shall be in the City of Brentwood, County of
Williamson, State of Tennessee.
2. The corporation may also have offices at such other places as the board
of directors may from time to time appoint or the business of the corporation
may require.
SEAL
3. The corporation seal shall have inscribed thereon the name of the
corporation, the year of its organization and the words "Corporate Seal,
Illinois." Said seal may be used by causing it or a facsimile thereof to be
impressed or affixed or in any other manner reproduced.
4. Except as otherwise provided herein, meetings of the shareholders may
be held at such place, either within or without the State of Illinois, as may
be designated by the board of directors and stated in the notice of the
meeting.
5. The Annual Meeting of Shareholders shall be held as near as possible
to the last Friday of April in each year, if not a legal holiday, and, if a
legal holiday, then on the next secular day following, at ten-thirty o'clock
a.m., when the shareholders shall elect, by a plurality vote, by ballot, a
board of directors, and transact such other business as may properly be brought
before the meeting.
6. The holders of a majority of the shares issued and outstanding, and
entitled to vote thereat, present in person, or represented by proxy, shall be
requisite and shall constitute a quorum at all meetings of the shareholders for
the transaction of business except as otherwise provided by law, by the
Articles of Incorporation by these by-laws. If, however, such majority shall
not be present or represented at any meeting of the shareholders, a majority of
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<PAGE> 2
shareholders entitled to vote thereat, present in person or by proxy, shall
have the power to adjourn the meeting from time to time, without notice other
than announcement at the meeting, until the requisite amount of voting shares
shall be present. At such adjourned meeting at which the requisite amount of
voting shares shall be represented any business may be transacted which might
have been transacted at the meeting as originally notified.
7. At each meeting of the shareholders every shareholder having the right
to vote shall be entitled to vote in person or by proxy appointed by an
instrument in writing subscribed by such shareholder. No proxy shall be valid
after eleven months from the date of its execution unless otherwise provided in
the proxy. Each outstanding share, regardless of class, shall be entitled to
one vote on each matter submitted to a vote at a meeting of shareholders. In
all elections for directors every shareholder shall have the right to vote in
person or by proxy for the number of shares owned by him for as many persons as
there are directors to be elected, or to cumulate said shares and give one
candidate as many votes as the number of directors multiplied by the number of
his shares shall equal, or to distribute them on the same principle among as
many candidates as he shall think fit. Except where the books maintained by
the Transfer Agent for the transfer of shares of the corporation shall have
been closed or a date shall have been fixed as a record date for the
determination of its shareholders entitled to vote, no shares shall be voted at
any election for directors which shall have been transferred on the books
maintained by said Transfer Agent within twenty days next preceding such
election of directors.
8. Written notice of the annual meeting shall be mailed at least ten, or
in case a merger or consolidation is to be acted upon at least twenty, but not
more than forty days prior to the date thereof to each shareholder entitled to
vote thereat at such address as appears on the books maintained by the Transfer
Agent for the transfer of shares of the corporation.
9. The Transfer Agent of the corporation shall make, at least ten days
before each meeting of shareholders, a complete list of the shareholders
entitled to vote at such meeting, arranged in alphabetical order, with the
address of and the number of shares held by each, which list, for a period of
ten days prior to such meeting, shall be kept on file at the registered office
of
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the corporation and shall be subject to inspection by any shareholder at any
time during usual business hours. Such list shall also be produced and kept
open at the time and place of the meeting and shall be subject to the
inspection of any shareholder during the whole time of the meeting.
10. Special meetings of the shareholders may be called only by the
chairman, by the president, by the secretary, by the board of directors, or in
the manner hereafter prescribed by the holders of not less than one-fifth of
all the outstanding shares entitled to vote on the matter for which the meeting
is called. At any time, upon written request of shareholders holding in the
aggregate one-fifth of all the outstanding shares entitled to vote on the
matter for which a meeting is called, it shall be the duty of the secretary to
call a special meeting of shareholders to be held at the registered office at
such time as the secretary may fix, not less than ten nor more than forty days
after the receipt of said request, and if the secretary shall neglect or refuse
to issue such call, shareholders making the request may do so upon no less than
forty days' written notice. Such request shall state the purpose or purposes
of the proposed meeting.
11. Persons authorized to call shareholders' meetings shall cause written
notice of the time, place and purpose of the meeting to be given all
shareholders entitled to vote at such meeting, at least ten, or in case a
merger or consolidation is to be acted upon at the meeting, at least twenty but
not more than forty days prior to the day named for the meeting, provided that
written notice given by shareholders calling a meeting in accordance with
paragraph 10 above shall be given forty days prior to the date named for the
meeting. If such written notice is placed in the United States mail, postage
prepaid, and addressed to a shareholder at his last known post office address,
notice shall be deemed to have been given him. Notice of any shareholders'
meeting may be waived by any shareholder at any time.
12. Business transacted at all special meetings shall be confined to the
object stated in the call.
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DIRECTORS
13. The property and business of the corporation shall be managed by its
board of directors, which shall be eleven (11) in number and divided into three
classes, which shall be as nearly equal in number as possible, as provided in
the Articles of Incorporation. The number of directors may be increased or
decreased by amendment to these by-laws, provided the number of directors shall
not be less than three. In case of any increase in the number of directors,
the additional directors may be elected by the shareholders at any meeting,
annual or special, duly called for that purpose, or by the board of directors.
Except as otherwise herein provided, the directors shall be elected at the
annual meeting of shareholders. Each director shall be elected to serve until
his successors shall be elected and shall qualify; provided, however, that in
no event shall any director who is first elected on or after February 16, 1976,
be permitted to serve on or after his date of retirement, which retirement date
shall be deemed to be the date of the Annual Meeting of Shareholders of the
Company next following the date on which a director has attained age 70.
Nominations for the election of directors may be made by the board of
directors or by any shareholder entitled to vote for the election of directors.
Nominations by the board of directors may be made at any time. Nominations by
shareholders shall be made by notice in writing, delivered or mailed by first
class United States mail, postage prepaid, to the secretary of the corporation
not less than 30 days nor more than 40 days prior to any meeting of the
shareholders called for the election of directors; provided, however, that if
less than 30 days' notice of the meeting is given to shareholders, such written
notice shall be delivered or mailed, as prescribed, to the secretary of the
corporation not later than the close of the seventh day following the day on
which notice of the meeting was mailed to shareholders. Each notice of
nomination by a shareholder shall set forth (i) the name, age, business address
and, if known, residence address of each nominee proposed in such notice, (ii)
the principal occupation or employment of each such nominee and (iii) the
number of share of stock of the corporation which are beneficially owned by
each nominee. The chairman of the meeting may, if the facts warrant, determine
and declare to
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the meeting that a nomination was not made in accordance with the foregoing
procedure, and if he should so determine, he shall so declare to the meeting
and the defective nomination shall be disregarded.
14. The directors may hold their meetings and have one or more offices,
and keep the books of the corporation in the City of Brentwood, Tennessee, or
at such other places as they may from time to time determine.
15. The entire board of directors or any individual director may, at any
special meeting of the shareholders called for that purpose in the manner
provided by Paragraph 10 and 11 hereof, be removed from office by a vote of
shareholders holding a majority of the outstanding shares entitled to a vote at
an election of directors. In case the board or any one or more directors be so
removed, new directors may be elected at the same meeting. Unless the entire
board be removed, no individual director shall be removed in case the votes of
a sufficient number of shares are cast against the resolution for his removal,
which, if cumulatively voted at an election of the whole board, would be
sufficient to elect one or more directors.
16. If the office of a any director or directors becomes vacant by reason
of death, resignation, retirement, disqualification, removal from office, or
otherwise, such vacancy or vacancies may be filled by the affirmative vote of a
majority of the remaining directors. A director thus elected to fill any
vacancy shall hold office until the next annual election and until a successor
or successors have been duly elected, unless sooner displaced.
17. In addition to the powers and authorities by these by-laws expressly
conferred upon it, the board of directors may exercise all such powers of the
corporation and do all such lawful acts and things as are not by statute or by
the Articles of Incorporation or by these by-laws directed or required to be
exercised or done by the shareholders.
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EXECUTIVE COMMITTEE
18. The board of directors shall by resolution or upon recommendation of
the Chairman and approval of the majority of the entire Board, establish an
Audit Committee and a Compensation Committee and may by resolution or
resolutions, passed by a majority of the whole Board, designate one or more
additional committees, each committee to consist of two or more directors, who
shall serve at the pleasure of the Board. Such committees shall have any may
exercise such powers permitted by law as may be directed or delegated by the
board of directors from time to time. Vacancies in the membership of the
committees shall be filed by the board of directors at a regular or a special
meeting called for that purpose.
COMPENSATION OF DIRECTORS
19. Directors who are not employees of the Company shall be paid a stated
salary for their service plus a fixed sum and expenses of attendance at each
regular and special meeting of the board; PROVIDED, that nothing herein
contained shall be construed to preclude any director from serving the
Corporation in any other capacity and receiving compensation therefor or
preclude the Chairman of the Board from receiving any stated salary for his
services as such. Members of special or standing committees will be allowed
like compensation for attending committee meetings. The board of directors
shall have the authority to fix the compensation of directors unless otherwise
provided by the Articles of Incorporation.
MEETINGS OF THE BOARD
20. Each newly elected board shall hold its annual meeting immediately
following the annual meeting of shareholders at the place where such annual
meeting of shareholders was held, and no notice of such annual meeting to the
new elected directors shall be necessary in order legally to constitute the
annual meeting, provided a quorum shall be present.
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21. Regular meetings of the board of directors may be held at such place
as a majority of the directors may from time to time appoint. Notice of such
regular meeting shall be given at least five days before the meeting by mail or
telegram by the chairman of the board or in his absence, by the president.
Such notice need not specify the business to be transacted at such regular
meeting, but shall state that the meeting to be held is a regular meeting of
the board.
22. Special meetings of the board may be called by the chairman of the
board, or in his absence, by the president on five (5) days' notice to each
director, by mail or telegram, or notice may be waived by the directors.
Special meetings shall be called by the chairman of the board or by the
president or the secretary in like manner and on like notice on the written
request of two directors.
23. At all meetings of the board a majority of directors shall be
necessary and sufficient to constitute a quorum for the transaction of
business, and the act of a majority of the directors present at any meeting at
which there is a quorum shall be the act of the board of directors, except as
may be otherwise specifically provided by statute or by the Articles of
Incorporation or by these By-laws.
24. No business shall be transacted at any special meeting of the board
which shall not have been stated in the notice thereof, except upon written
approval of all the directors of the corporation.
OFFICERS
25. The officers of the corporation shall be elected by the directors and
shall be a chairman of the board, a president, one or more vice presidents, a
secretary and a treasurer. The board of directors may also appoint one or more
assistant secretaries and assistant treasurers. Any two of the offices of the
corporation may be held by one person except the offices of president and
secretary. The board of directors may appoint one or more assistant
secretaries and assistant treasurers to perform their respective duties and to
have such powers of the secretary and treasurer as shall from time to time be
assigned to them by the board of directors.
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26. The chairman of the board and the president shall be a member of the
board of directors. No other officers of the corporation need be a member of
the board. No vice president who is not a director may succeed to or fill the
office of the president.
27. The board may appoint such other officers and agents as it shall deem
necessary, who shall hold their offices for such terms and shall exercise such
powers and perform such duties as shall be determined from time to time by the
board.
28. The salaries of all elected officers of the corporation shall be
fixed by the board of directors.
29. The officers of the corporation shall hold office until their
successors are chosen and qualify in their stead. Any officer, manager or
agent elected or appointed by the board of directors may be removed at any time
by the affirmative vote of a majority of the whole board of directors, whenever
in their judgment the best interest of the corporation will be served thereby,
such removal, however, to be without prejudice to the contract rights of the
person so removed.
If the office of any officer or officers becomes vacant for any reason,
the vacancy shall be filled by the affirmative vote of a majority of the whole
board of directors.
30. The chairman of the board shall preside at all meetings of the
shareholders and the board of directors.
PRESIDENT
31. The president shall be the chief executive officer of the corporation
and shall have active supervision and general charge of the property, business
and employees of the corporation, subject, however, to the control of the board
of directors; he shall see that all resolutions and orders of the board of
directors are carried into effect; he shall exercise such other powers and
perform such other duties as shall be incident to the office of president or as
may be required by the board of directors. In the absence or inability to act
of the chairman of the board of directors, the president shall preside at all
meetings of the shareholders and the board of directors and shall during such
absence exercise all the powers of the chairman of the board.
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32. He shall execute bonds, mortgages, and other contracts requiring the
seal, under the seal of the corporation, but the authority to execute such
instruments may also be vested in others as provided in Paragraph 41 of these
by-laws.
33. He shall be EX OFFICIO a member of all standing committees, and shall
have the general powers and duties of supervision and management usually vested
in the office of president of a corporation.
VICE PRESIDENTS
34. Each vice president shall have such powers and perform such duties as
the board of directors may from time to time prescribe or as the chairman of
the board or the president may from time to time delegate to him. At the
request of the president, any vice president may, in the case of the absence or
inability to act of the president, temporarily act in his place. In the case
of the death of the president or in the case of his absence or inability to act
where no vice president has been designated to act temporarily in his place,
the board of directors shall designate one or more vice presidents to perform
the duties of the president.
THE SECRETARY AND ASSISTANT SECRETARIES
35. The secretary shall attend all sessions of the board and all meetings
of the shareholders and record all votes and the minutes of all proceedings in
a book to be kept for that purpose. He shall give, or cause to be given,
notice of all meetings of the shareholders and special meetings of the board of
directors, and shall perform such other duties as may be prescribed by the
board of directors or president, under whose supervision he shall be. He shall
keep in safe custody the seal of the corporation, and when authorized by the
board, affix the same to any instrument requiring it, and when so affixed, it
shall be attested by his signature or by the signature of the assistant
secretary or an assistant secretary.
9
<PAGE> 10
36. The assistant secretary, or assistant secretaries in the order of
their seniority, shall, in the absence or disability of the secretary, perform
the duties and exercise the powers of the secretary, and shall perform such
other duties as the board of directors shall prescribe.
THE TREASURER AND ASSISTANT TREASURERS
37. The treasurer shall have the custody of the corporate funds and
securities and shall keep full and accurate accounts or receipts and
disbursements in books belonging to the corporation and shall deposit all
moneys, and other valuable effects in the name and to the credit of the
corporation in such depositaries as may be designated by the board of
directors.
38. He shall disburse the funds of the corporation as may be ordered by
the board, taking proper vouchers for such disbursements, and shall render to
the president and directors, at the regular meetings of the board, or whenever
they may require it, an account of all his transactions as treasurer and of the
financial condition of the corporation.
39. If required by the board of directors, he shall give the corporation
a bond in such sum, and with such surety or sureties as shall be satisfactory
to the board, for the faithful performance of the duties of his office, and for
the restoration to the corporation, in case of his death, resignation,
retirement or removal from office, of all books, papers, vouchers, money and
other property of whatever kind in his possession or under his control
belonging to the corporation.
40. The assistant treasurer, or assistant treasurers in the order of
their seniority, shall, in the absence or disability of the treasurer, perform
the duties and exercise the powers of the treasurer, and shall perform such
other duties as the board of directors shall prescribe.
DUTIES OF OFFICERS MAY BE DELEGATED
41. The board of directors, except as otherwise provided in these
by-laws, may authorize any officer or officers, or agent or agents, to enter
into any bond, mortgage or contract or execute and deliver any instrument in
the name and on behalf of the corporation, and such authority may be general or
confined to specific instances; and, unless so authorized by the board of
directors or
10
<PAGE> 11
by the provisions of these by-laws, no officer, agent or employee other than
the chairman of the board of directors and the president shall have any power
or authority to bind the corporation by any contract or engagement or to pledge
its credit or to render it liable pecuniarily for any purpose or to any
allowance.
42. In case of the absence of any officer of the corporation or for any
other reason that the board may deem sufficient, the board may delegate, for
the time being, the powers or duties or any of them, of such officer to any
other officer, or to any director.
CONSIDERATION FOR SHARES
43. Without the consent of any holder of any share of the capital stock
of this corporation, the shares of stock of this corporation may be issued by
it from time to time in such number or amount of shares of said stock, and for
such consideration, not less than the par value thereof, in labor or services
actually performed, money or property, as from time to time may be fixed and
determined by the board of directors of this corporation at any annual meeting
or any special meeting called for said purpose, and the right, power and
authority of said board of directors from time to time so to authorize and
order the issuance by this corporation of the said shares of said stock, in
such number or amount of share, and for such consideration in labor, services
actually performed, money or property, as from time to time said board may fix
and determine, is hereby absolutely reserved to said board of directors.
Payment or delivery to, or receipt by this corporation of such
consideration as may be so fixed and determined by its board of directors for
the issuance of any share or shares of its said stock, as hereinbefore in this
Paragraph 43 provided, shall operate and be construed, deemed and held: (i) to
discharge, release and satisfy fully and absolutely, all liability to this
corporation and/or to its creditors now or at any time hereafter existing, of
any subscriber for, and/or holder or any such share or shares so authorized to
be issued in any way on account of, founded upon, or
11
<PAGE> 12
arising out of any subscription for, and/or purchase of, and/or issuance of a
certificate or certificates representing such share or shares, and (ii) to
constitute such share or shares as full paid and non-assessable.
CERTIFICATES REPRESENTING SHARES
44. Certificates evidencing the ownership of shares of the corporation
shall bear such serial designation (which may be a combination of letters and
numbers) as shall be prescribed by the board of directors and the ownership
thereof shall be recorded in books maintained by the Transfer Agent for
recording the transfer of shares of the corporation as they are issued. They
shall state that the corporation is organized under the laws of the State of
Illinois, the name of the person of whom issued, the number and class of
shares, and the designation of the series, if any, which such certificate
represents, the par value of each share represented by such certificate, and
such authorization number as may be prescribed by an Order or Orders of the
Illinois Commerce Commission. They shall be signed by the president or a vice
president, and the secretary or an assistant secretary, and sealed with the
seal or a facsimile seal of the corporation. In case the seal of the
corporation is changed after the certificate is sealed with the seal or a
facsimile of the seal of the corporation, but before it is issued, the
certificate may be issued by the corporation with the same effect as if the
seal had not been changed. Where such certificate is countersigned by a
transfer agent other than the corporation itself or an employee of the
corporation, or by a transfer clerk and registered by a registrar, the
signatures of the president or vice president and the secretary or assistant
secretary upon such certificate may be facsimiles, engraved or printed. In
case any officer who has signed or whose facsimile signature has been placed
upon such certificate shall have ceased to be such officer before such
certificate is issued, it may be issued by the corporation with the same effect
as if such officer had not ceased to be such at the date of its issue.
12
<PAGE> 13
Every certificate representing shares issued by the corporation shall set
forth upon the face or back of the certificate a full or summary statement of
all the designations, preferences, qualifications, limitations, restrictions,
and special or relative rights of the shares of each class authorized to be
issued, and if the corporation is authorized to issue any preferred or special
class in series, the variations in the relative rights and preferences between
the shares of each such series so far as the same have been fixed and
determined and the authority of the board of directors to fix and determine the
relative rights and preferences of subsequent series; provided that such
statement may be omitted from the certificate if it shall be set forth upon the
face or back of the certificate that such statement, in full, will be furnished
by the corporation to any shareholder upon request without charge.
TRANSFER OF SHARES
45. Transfers of shares shall be made on the books maintained by the
Transfer Agent for the transfer of shares of the corporation only upon
surrender of the certificate therefor, endorsed by the person named in the
certificate or by attorney lawfully constituted in writing.
CLOSING OF TRANSFER BOOKS
46. The board of directors shall have power to close the stock transfer
books of the corporation for a period not exceeding forty days preceding the
date of any meeting of shareholders or the date for payment of any dividend or
distribution, or the date for the allotment of rights, or, subject to contract
rights with respect thereto, the date when any change or conversion or exchange
of shares will be made or go into effect; provided, however, if the share
transfer books shall be closed for the purpose of determining shareholders
entitled to notice of or to vote at a meeting of shareholders, such books shall
be closed for at least 10 days, or in the case of a merger or consolidation at
least 20 days, immediately preceding such meeting; and provided, further, that
in lieu of closing the stock transfer books as aforesaid, the board of
directors may fix in advance a date at least 10, or in the case of a merger or
consolidation at least 20, but not more
13
<PAGE> 14
than 40 days preceding the date of any meeting of shareholders or the date for
payment of any dividend or distribution, or the date for the allotment of
rights, or, subject to contract rights with respect thereto, the date when any
change or conversion of exchange of shares will be made or go into effect, as a
record date for the determination of the shareholders entitled to notice of,
and to vote at, any such meeting, or entitled to receive payment of any
dividend, or to any such allotment of rights, or to exercise the rights in
respect of any such change, conversion or exchange of shares of capital stock,
and in such case only such shareholders as shall be shareholders of record on
the date so fixed shall be entitled to such notice of, and to vote at, such
meeting, or to receive payment of such dividend, or to receive such allotment
or rights, or to exercise such rights, as the case may be, notwithstanding any
transfer of any stock on the books of the corporation after any such record
date fixed as aforesaid.
REGISTERED SHAREHOLDERS
47. The corporation shall be entitled to treat the holder of record of
any share or shares of the corporation as the holder in fact thereof and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such share on the part of any other person, whether or not it shall
have express or other notice thereof, save as expressly provided by the laws of
Illinois.
LOST CERTIFICATES
48. Any person claiming a certificate of stock to be lost or destroyed,
shall make an affidavit or affirmation of that fact and advertise the same in
such manner as the board of directors may require. The owner of a lost or
destroyed certificate(s), or his legal representative will give the corporation
a bond, sufficient to indemnify the corporation against any claim that may be
made against it on account of the alleged loss of any such certificate. A new
certificate of the same tenor and for the same number of shares as the one
alleged to be lost or destroyed, may be issued without requiring any bond,
when, in the judgment of the directors it is proper so to do.
14
<PAGE> 15
INSPECTION OF BOOKS
49. The directors shall determine from time to time whether and, if
allowed, when and under what conditions and regulations the accounts and books
for the corporation (except as may by statute be specifically open to
inspection) or any of them shall be open to the inspection of the shareholders,
and the shareholders' rights in this respect are and shall be restricted and
limited accordingly.
CHECKS
50. All checks or demands for money and notes of the corporation shall be
signed by such officer or officers as the board of directors may from time to
time designate.
FISCAL YEAR
51. The fiscal year shall begin the first day of January in each year.
DIVIDENDS
52. Dividends upon shares of the corporation, subject to the provisions
of the Articles of Incorporation, may be declared by the board of directors at
any regular or special meeting, pursuant to law. Dividends may be paid in
cash, in property, or in shares of the corporation, and shall be paid only out
of the surplus of the aggregate of the assets of the corporation over the
aggregate of its liabilities, including in the latter the amount of its capital
shares.
Before payment of any dividend, there may be set aside out of any funds of
the corporation available for dividends such sum or sums as the directors from
time to time, in their absolute discretion, think proper as a reserve fund to
meet contingencies, or for equalizing dividends, or for repairing or
maintaining any property of the corporation, or for such other purpose as the
directors shall think conductive to the interests of the corporation.
15
<PAGE> 16
DIRECTORS' ANNUAL STATEMENT
53. The board of directors shall present at each annual meeting and when
called for by vote of the shareholders at any special meeting of the
shareholders, a full and clear statement of the business and condition of the
corporation.
NOTICES
54. Whenever under the provisions of these by-laws notice is required to
be given to any director, officer or shareholder, it shall not be construed to
mean any requirement for personal notice, but such notice may be given in
writing, by mail, by depositing the same in the post office or letter box, in a
postpaid, sealed wrapper, addressed to such shareholder, officer or director at
such address as appears on the books of the corporation, or, in default of
other address, to such director, officer or shareholder at the General Post
Office in the City of Chicago, Illinois, and such notice shall be deemed to be
given at the time when same shall be thus mailed.
55. The notice provided for in these by-laws of any general or special
meeting of the shareholders, or general or special meeting of the directors,
may be waived in writing by the shareholders or directors, respectively.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
56. Each director or officer of the corporation, each former director or
officer, and any person who serves or has served at the request of the
corporation as a director or officer of another corporation in which the
corporation owned shares of the capital stock or of which it was a creditor,
shall be indemnified by the corporation against any costs and expenses which
may be imposed upon or actually and necessarily incurred by him (and for which
he is not otherwise reimbursed), including the amount of any judgments or
fines, in connection with the defense of any action, suit or proceeding,
whether criminal or civil, in which he may be named as a party by reason of his
being or having been such director or officer, or by reason of any action
alleged to have been taken or omitted by him in either such capacity; provided,
however, that the
16
<PAGE> 17
corporation shall not indemnify any such person against any costs or expenses
imposed upon or incurred by him in relation to matters as to which he shall be
finally adjudged to be liable for negligence or misconduct in the performance
of duty. In the event of a settlement of any such action, suit or proceeding
prior to final adjudication, or in the event of a settlement or any claim made
against any such person by reason of his being or having been such director or
officer, such person shall be indemnified against any costs and expenses
actually incurred by him, including any amount paid to effect such settlement,
if the corporation is advised by independent counsel selected or approved by
its board of directors that he acted without negligence or misconduct in the
performance of duty and that such costs and expenses are not unreasonable. In
the event of a criminal action, suit or proceeding, a conviction or judgment
(whether based on a plea of guilty or nolo contendere or its equivalent, or
after trial) shall not be deemed an adjudication that such person is liable for
negligence or misconduct in the performance of duty if he acted in good faith
in what he considered to be the best interests of the corporation or such other
corporation or such other corporation and with no reasonable cause to believe
that the action was illegal.
The right of indemnification in this Paragraph 56 provided shall
insure to each person referred to in the first paragraph of this Paragraph 56
whether or not he is such director or officer at the time such costs or
expenses are imposed or incurred, and whether or not the claim asserted against
him is based on matters which antedate the adoption of these by-laws; and in
the event of his death or incapacity shall extend to his legal representatives.
Each person who shall act as a director or officer of the corporation, or if
any such other corporation at the request of the corporation, shall be deemed
to be doing so in reliance upon such right of indemnification; and such right
shall not be exclusive of any other right which he may have.
None of the provisions of this Paragraph 56 shall be construed as a
limitation upon the right of the corporation to exercise its general power to
enter into a contract or undertaking of indemnity with a director or officer in
any proper case not provided for herein. The provisions of Paragraph 56 shall
be subject to any limitations contained in applicable statutory laws.
17
<PAGE> 18
VOTING SHARE IN OTHER CORPORATIONS
57. Unless otherwise ordered by the shareholders, the chairman of the
board, the president or a vice president shall have full power and authority in
behalf of the corporation to attend, and to act and to vote, at any meeting of
shareholders of any corporation in which this corporation may hold shares, and
in connection with such meeting shall possess and may exercise in behalf of the
corporation any and all rights and powers incident to the ownership of such
shares, including the power to appoint proxies therefor and to execute any and
all instruments for that purpose. The directors may, from time to time by
resolution, direct the manner in which shares may be voted or confer these
powers upon any other person or persons.
AMENDMENTS
58. These by-laws may be altered or amended only in the manner prescribed
by the Articles of Incorporation.
* * * * * * * * * * * * * * * * * *
18
<PAGE> 1
EXHIBIT 12.01
UNITED CITIES GAS COMPANY AND SUBSIDIARIES
COMPUTATION OF RATIO OF CONSOLIDATED EARNINGS TO FIXED CHARGES
FOR THE TWELVE MONTHS ENDED
<TABLE>
<CAPTION>
(Unaudited, in thousands, except ratio amounts)
6-30-96 12-31-95 12-31-94 12-31-93 12-31-92 12-31-91
------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Fixed Charges, as defined:
Interest on long-term debt..................... $14,328 $13,697 $14,026 $14,553 $12,965 $11,111
Amortization of debt discount.................. 255 227 227 220 181 233
------- ------- -------- -------- ------- -------
Total....................................... $14,583 $13,924 $14,253 $14,773 $13,146 $11,344
======= ======= ======= ======= ======= =======
Earnings, as defined:
Net income..................................... $14,981 $ 9,935 $12,093 $12,150 $10,218 $ 7,875
Taxes on income................................ 9,707 6,970 6,503 5,681 5,171 2,564
Fixed charges, as above........................ 14,583 13,924 14,253 14,773 13,146 11,344
------- ------- -------- -------- ------- -------
Total....................................... $39,271 $30,829 $32,849 $32,604 $28,535 $21,783
======= ======= ======= ======= ======= =======
Ratio of Consolidated Earnings to Fixed Charges... 2.69 2.21 2.30 2.21 2.17 1.92
======= ======= ======= ======= ======= =======
</TABLE>
17
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS AND THE CONSOLIDATED STATEMENTS OF INCOME, CASH
FLOWS AND CAPITALIZATION AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 291,600
<OTHER-PROPERTY-AND-INVEST> 52,095
<TOTAL-CURRENT-ASSETS> 102,111
<TOTAL-DEFERRED-CHARGES> 25,920
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 471,726
<COMMON> 104,325
<CAPITAL-SURPLUS-PAID-IN> 22,462
<RETAINED-EARNINGS> 37,078
<TOTAL-COMMON-STOCKHOLDERS-EQ> 163,865
0
0
<LONG-TERM-DEBT-NET> 163,071
<SHORT-TERM-NOTES> 8,303
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 8,925
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 127,562
<TOT-CAPITALIZATION-AND-LIAB> 471,726
<GROSS-OPERATING-REVENUE> 144,710
<INCOME-TAX-EXPENSE> 8,676
<OTHER-OPERATING-EXPENSES> 117,771
<TOTAL-OPERATING-EXPENSES> 126,447
<OPERATING-INCOME-LOSS> 18,263
<OTHER-INCOME-NET> 3,002
<INCOME-BEFORE-INTEREST-EXPEN> 21,265
<TOTAL-INTEREST-EXPENSE> 3,742
<NET-INCOME> 17,523
0
<EARNINGS-AVAILABLE-FOR-COMM> 17,523
<COMMON-STOCK-DIVIDENDS> 3,252
<TOTAL-INTEREST-ON-BONDS> 2,959
<CASH-FLOW-OPERATIONS> 47,196
<EPS-PRIMARY> 1.35
<EPS-DILUTED> 1.35
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS AND THE CONSOLIDATED STATEMENTS OF INCOME, CASH
FLOWS AND CAPITALIZATION AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 294,256
<OTHER-PROPERTY-AND-INVEST> 52,661
<TOTAL-CURRENT-ASSETS> 70,421
<TOTAL-DEFERRED-CHARGES> 25,842
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 443,180
<COMMON> 105,812
<CAPITAL-SURPLUS-PAID-IN> 22,462
<RETAINED-EARNINGS> 30,689
<TOTAL-COMMON-STOCKHOLDERS-EQ> 158,963
0
0
<LONG-TERM-DEBT-NET> 158,192
<SHORT-TERM-NOTES> 9,404
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 5,419
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 111,202
<TOT-CAPITALIZATION-AND-LIAB> 443,180
<GROSS-OPERATING-REVENUE> 205,407
<INCOME-TAX-EXPENSE> 6,802
<OTHER-OPERATING-EXPENSES> 179,808
<TOTAL-OPERATING-EXPENSES> 186,610
<OPERATING-INCOME-LOSS> 18,797
<OTHER-INCOME-NET> 2,822
<INCOME-BEFORE-INTEREST-EXPEN> 21,619
<TOTAL-INTEREST-EXPENSE> 7,208
<NET-INCOME> 14,411
0
<EARNINGS-AVAILABLE-FOR-COMM> 14,411
<COMMON-STOCK-DIVIDENDS> 6,530
<TOTAL-INTEREST-ON-BONDS> 5,824
<CASH-FLOW-OPERATIONS> 53,605
<EPS-PRIMARY> 1.11
<EPS-DILUTED> 1.11
</TABLE>
