<PAGE>
FORM 10-Q/A
AMENDMENT NO. 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For the quarterly period ended...............September 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from.............to....................
Commission file number.....................................1-3268
CENTRAL HUDSON GAS & ELECTRIC CORPORATION
(Exact name of registrant as specified in its charter)
NEW YORK 14-0555980
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
284 SOUTH AVENUE, POUGHKEEPSIE, NEW YORK 12601-4879
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including
area code (914) 452-2000
Indicate by check mark whether the Registrant (1) has
filed all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
Indicate the number of shares outstanding of each of
the issuer's classes of common stock as of the latest practicable
date. Common stock, par value $5.00 per share; 16,911,387 shares
outstanding as of September 30, 1998.
<PAGE>
Registrant hereby amends and as amended, restates, the
following items to its Quarterly Report, on Form 10-Q, for the
quarterly period ended September 30, 1998, as set forth below, in
response to the Commission's letter of comments dated November
23, 1998:
1. The material under the subcaption "THE YEAR 2000
ISSUE" of ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS is amended and as
amended Item 2 of Part I reads as follows:
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
CAPITAL RESOURCES AND LIQUIDITY
The growth of retained earnings in the first nine months of 1998
contributed to the increase in the book value of common stock
from $27.61 at December 31, 1997 to $28.06 at September 30,
1998; however, the common equity ratio decreased from 53.2% at
December 31, 1997 to 52.2% at September 30, 1998, due to the
combined effect of the repurchase of common stock which exceeded
the increase in retained earnings and the issuance of $15
million Medium Term Notes as discussed below.
For the nine months ended September 30, 1998, the Company
repurchased 368,400 shares of its common stock for $15.7 million
under its stock repurchase program (See Note 6, "Capitalization-Capital
Stock", to the Consolidated Financial Statements of the
Company's 10-K Report).
For the nine months ended September 30, 1998, cash expenditures
related to the construction program of the Company amounted to
$33.5 million. The amount shown on the Consolidated Statement
of Cash Flows for "Net additions to Plant" of $33.8 million
includes the debt portion of $346,000 of the Allowance for Funds
Used During Construction ("AFDC", as such term is described in
Note 1, "Regulatory Matters", to the Consolidated Financial
Statements of the Company's 10-K Report). The cash requirements
for such expenditures were funded from internal sources.
The Company has $52 million of committed short-term credit
facilities available. In order to diversify its sources of
short-term financing, the Company has also entered into short-term
credit facilities with several commercial banks. At
September 30, 1998, the Company had no short-term debt
outstanding and had investments in short-term securities in the
amount of $31.1 million at the end of September 1998.
Authorization from the PSC limits the short-term borrowing
amount the Company may have outstanding, at any time, to $52
million in the aggregate.
Pursuant to Article XXI of the Company's First Mortgage Bond
Indenture, the Company deposited $722,226 on March 24, 1998 with
the Indenture Trustee. Such Article requires the deposit of the
amount by which depreciation exceeds property additions in each
calendar year, less property additions made in the subsequent
calendar year, up to the date of deposit which must be made no
later than March 31 of each year. Such deposit may be withdrawn
at a subsequent date to fund redemptions of outstanding mortgage
bonds.
As described in Note 7,"Capitalization-Long-Term Debt", to the
Consolidated Financial Statements of the Company's 10-K Report,
the Company's interest rate cap agreement expired in April 1998.
On April 1, 1998, the Company entered into an interest rate cap
agreement with a bank, which agreement expires March 31, 2000.
Under this agreement, in the event a nationally recognized tax-exempt
bond interest rate index exceeds 5%, the Company will
receive a payment from such bank equal to the amount by which
the actual interest costs on its variable rate 1985 and 1987 New
York State Energy Research and Development Authority Bonds
exceeds 5% per annum. This agreement has the effect of limiting
the interest the Company must pay on such bonds (on a $115.9
million notional amount) to the lesser of their actual rate or
5% per annum.
On May 5, 1998, Moody's Investor Service, Inc. upgraded the
Company's senior secured debt rating from "A3" to "A2". The
Company's other service debt ratings are "A" from Standard and
Poor's Corporation, Duff & Phelps Credit Rating Co. and
Fitch/IBCA.
On September 8, 1998, the Company issued and sold 5.93% Medium
Term Notes under its Medium Term Note Program. The principal
amount of the notes is $15 million and matures on September 10,
2001. The net proceeds to the Company were $14,947,500 or 99.65%.
The Company intends to refinance its 8.375% series NYSERDA bonds
($16.7 million)on or soon after their call date on December 1,
1998 at a lower cost.
EARNINGS PER SHARE
Earnings per share of common stock were $.77 for the third quarter of
1998, as compared to $.72 for the third quarter of 1997, an
increase of 7%. Earnings per share of common stock were $2.38
for the nine months ended September 30, 1998, as
compared to $2.46 for the nine months ended September 30, 1997,
a decrease of 3%.
The increase in earnings per share for the quarter ended
September 30, 1998, as compared to the same period in 1997,
resulted primarily from the increased electric and gas net
operating revenues largely due to increased electric sales to
residential, commercial and industrial customers and also, sales
to other utilities. These increases were partially offset by
the non-recurring provision for the non-recoverable portion of a
purchased power contract. The increase in gas net operating
revenues results primarily from favorable reconciling
adjustments to gas costs collected from customers through the
company's gas cost adjustment. Also contributing to the
increased earnings is the combined effect of decreased property
taxes and decreased payroll taxes and the favorable impact of
the Company's common stock repurchase program. Offsetting these
increases were increased operation and maintenance costs in 1998
resulting from increased output of the Company's electric
generating plants and the net effect of various other items,
including increased depreciation expense on the Company's plant
and equipment.
The decrease in per share earnings for the nine months ended
September 30, 1998, as compared to the same period in 1997,
resulted largely from a decrease in electric net operating
revenues due primarily to the non-recurring final provision for
the non-recoverable portion of a purchased power contract. Also
impacting this decrease was the net effect of various other
items, including increased depreciation expense on the Company's
plant and equipment and the favorable impact of the Company's
common stock repurchase program.<PAGE>
RESULTS OF OPERATIONS
The following table reports the variation in the results of
operations for the three months and the nine months ended
September 30, 1998 compared to the same periods for 1997:
3 MONTHS ENDED SEPTEMBER 30,
INCREASE
1998 1997 (DECREASE)
(Thousands of Dollars)
Operating Revenues............... $125,723 $123,507 $ 2,216
Operating Expenses............... 107,373 105,596 1,777
Operating Income................. 18,350 17,911 439
Other Income..................... 2,201 2,019 182
Income before Interest Charges... 20,551 19,930 621
Interest Charges................. 6,741 6,562 179
Net Income....................... 13,810 13,368 442
Dividends Declared on Cumulative
Preferred Stock................. 807 807 -
Income Available for Common Stock $ 13,003 $ 12,561 $ 442
9 MONTHS ENDED SEPTEMBER 30,
INCREASE
1998 1997 (DECREASE)
(Thousands of Dollars)
Operating Revenues............... $381,711 $393,987 $(12,276)
Operating Expenses............... 324,955 335,433 (10,478)
Operating Income................. 56,756 58,554 (1,798)
Other Income..................... 6,464 6,441 23
Income before Interest Charges... 63,220 64,995 (1,775)
Interest Charges................. 20,202 19,679 523
Net Income....................... 43,018 45,316 (2,298)
Dividends Declared on Cumulative
Preferred Stock................. 2,422 2,422 -
Income Available for Common Stock $ 40,596 $ 42,894 $ (2,298)
OPERATING REVENUES
Operating revenues increased $2.2 million (2%) for the third
quarter of 1998 as compared to the third quarter of 1997 and
decreased $12.3 million (3%) for the nine months ended
September 30, 1998. Details of these revenue changes by
electric and gas departments are as follows:
INCREASE (DECREASE) FROM PRIOR PERIOD
THIRD QUARTER NINE MONTHS
Electric Gas Electric Gas
(Thousands of Dollars)
Customer Sales....... $ 4,842 $ (3,228)* $ 3,199 $(10,794)*
Sales to Other
Utilities........... 2,484 (4) 6,191 512
Fuel and Gas Cost
Adjustment.......... 468 28 1,577 (8,325)
Deferred Revenues.... (2,445) 256 (5,170) 1,648
Miscellaneous**...... (178) (7) (1,060) (54)
$ 5,171 $ (2,955) $ 4,737 $(17,013)
*Both firm and interruptible revenues.
**Includes revenues from delivery service of electric for retail
access customers, transportation of customer-owned gas and
sales to customers outside the Company's service territory.
SALES
The Company's sales vary seasonally in response to weather.
Generally electric revenues peak in the summer and gas revenues
peak in the winter.
Total kilowatt-hour sales of electricity within the Company's
service territory increased 6%, while firm sales of natural gas
decreased 9%, for the third quarter of 1998 as compared to the
third quarter of 1997. For the nine months ended September 30,
1998, electric sales increased 2% and firm gas sales decreased
11% compared to the same period last year. Changes in sales
from last year by major customer classifications, including
interruptible gas sales, are set forth below. Also indicated
are changes related to transportation of customer-owned gas:
INCREASE (DECREASE) FROM PRIOR PERIOD
THIRD QUARTER NINE MONTHS
Electric Gas Electric Gas
Residential........ 7 ( 9)% 1 (10)%
Commercial......... 6 - 3 (8)
Industrial......... 6 (52) 1 (28)
Interruptible...... N/A (47) N/A (44)
Transportation of
Customer-owned
Gas............... N/A 1 N/A 5
Delivery service of electric retail access customers first began
in the quarter ended March 31, 1998. The related volume was
.9% and .4% of total own territory sales for the quarter and
for the nine months ended September 30, 1998, respectively.
Sales of electricity to residential customers in the third quarter
of 1998 increased 7% primarily from an increase in
usage per customer. Commercial sales in the third quarter of
1998 increased 6% as compared to last year due to the combined
effect of a 3% increase in usage per customer and a 3% increase
in the number of customers. Electric sales to industrial
customers increased 6% in the third quarter of 1998 due
primarily to an increase in usage by a large industrial
customer.
For the nine months ended September 30, 1998, sales of electricity to
residential customers increased 1% due to an increase in usage per
customer. Sales to commercial customers increased 3% due to the
combined effect of a 2% increase in the number of customers and a
1% increase in the usage per customer. Electric sales to industrial
customers increased 1% for such nine-month period.
Sales of gas to residential customers for the third quarter of 1998
decreased 9% due to the net effect of a 10% decrease in
usage per customer and a 1% increase in the number of
customers. Sales of gas to commercial customers for the third
quarter of 1998 remained flat due to the net effect of a 4%
increase in the number of customers and a 4% decrease in usage
per customer. Firm gas sales to industrial customers decreased
52% for the third quarter of 1998 when compared to the same
period in 1997, due primarily to decreased usage by a large
industrial customer and the conversion of a number of industrial
customers to gas transportation service.
For the nine months ended September 30, 1998, residential gas
sales decreased 10% due to a decrease in usage per customer.
Commercial gas sales decreased 8% due to the net effect of a
11% decrease in usage per customer and a 3% increase in the
number of customers. Firm gas sales to industrial customers
for the nine months ended September 30, 1998 decreased 28% due
largely to a decrease in usage by a large industrial customer
and the conversion of a number of industrial customers to gas
transportation service.
Interruptible gas sales decreased 47% in the third quarter of
1998 and 44% for the nine months ended September 30, 1998, due
largely to a decrease in boiler gas usage for electric generation.
Transportation gas volumes increased 1% for the third quarter and
increased 5% for the nine months ended September 30, 1998,
due primarily to the conversion of a number of industrial
customers to gas transportation service.
<PAGE>
OPERATING EXPENSES
The following table reports the variation in the operating expenses for
the three months and nine months ended September 30, 1998 compared
to the same periods for the prior year:
INCREASE (DECREASE) FROM PRIOR PERIOD
THIRD QUARTER NINE MONTHS
Amount Percent Amount Percent
(Dollars in Thousands)
Operating Expenses
Fuel and Purchased
Electricity............. $ 4,679 15 % $ 8,530 10%
Purchased Natural Gas.... (3,533) (44) (15,884) (34)
Other Expenses of
Operation............... 470 2 (1,030) (1)
Maintenance.............. (55) (1) (597) (3)
Depreciation and
Amortization............ 509 5 1,363 4
Taxes, Other than
Federal Income Tax...... (790) (5) (1,692) (3)
Federal Income Tax....... 497 7 (1,168) (5)
Total............... $ 1,777 2% $(10,478) (3)%
Fuel and purchased electricity costs increased $4.7 million (15%)
for the third quarter of 1998 and $8.5 million (10%) for the
nine months ended September 30, 1998, resulting from the
combined effect of higher electric sales (including sales to
other utilities) and the non-recurring final provision for the
non-recoverable portion of a purchased power contract.
Purchased natural gas costs decreased $3.5 million (44%) for
the third quarter of 1998 resulting primarily from lower
interruptible gas sales for usage as boiler fuel. Also
contributing to this decrease was the favorable reconciling
adjustments to gas costs collected from customers through the
Company's gas cost adjustment. Purchased natural gas costs
decreased $15.9 million (34%) for the nine months ended
September 30, 1998 resulting primarily from the combined effect
of lower interruptible gas sales for usage as boiler fuel, a
decrease in the restoration of deferred gas costs related to
the Company's gas cost adjustment and a reduction in the base
cost of gas resulting from decreased own territory firm sales.
COMMON STOCK DIVIDENDS
Reference is made to the caption "Common Stock Dividends and Price
Ranges" on Page 37 of Item 7 to the Company's 10-K Report, and
which is incorporated by reference in Part II, Item 5 of said
Report, for a discussion of the Company's dividend policies.
On September 25, 1998, the Board of Directors of the Company
declared a quarterly dividend of $.54 per share, payable
November 2, 1998 to shareholders of record as of October 9, 1998,
representing an increase of $.005, or 1%, over the $.535 per share
level established one year ago.
OTHER MATTERS
FORWARD-LOOKING STATEMENTS
This quarterly report on Form 10-Q and the documents incorporated
by reference may contain statements which, to the extent they
are not recitations of historical fact, constitute "forward-looking
statements" within the meaning of the Securities Litigation Reform
Act of 1995 (Reform Act). These statements
will contain words such as "believes", "expects", "intends",
"plans", and other similar words. All such forward-looking
statements are intended to be subject to the safe harbor
protection provided by the Reform Act. A number of important
factors affecting the Company's business and financial results
could cause actual results to differ materially from those
stated in the forward-looking statements. Those factors
include weather, energy supply and demand, developments in the
legislative, regulatory and competitive environment, electric
and gas industry restructuring and cost recovery and certain
environmental matters as well as such other factors as set
forth in the Company's Annual Report on Form 10-K for the year
ended December 31, 1997 and all documents subsequently filed
with the Securities and Exchange Commission.
Given these uncertainties, undue reliance should not be placed on
these forward-looking statements.
THE YEAR 2000 ISSUE
Overview
Over the last several decades, computer systems and programs were
designated to identify the year with two digits. On January 1,
2000 (Year 2000), errors may occur if computers cannot
distinguish between 1900 and 2000 (Year 2000 Problem). All
mainframe and personal computers, and related systems,
application code and process control systems using embedded chip
technology have a potential for being adversely affected by the
use of two digit definitions for the identification of the year
component of date information. These include corporate business
applications, facilities maintenance and operation systems,
energy generation, control and distribution processes, customer
service and support activities and the equipment related to the
support of these activities. If such adverse effects are not
successfully remediated before December 31, 1999, interruption to
electric and/or natural gas service could occur, with attendant
lost revenues and adverse customer relations impacts.
At the Company, the Year 2000 Problem Project (Project) is a high
priority undertaking, encompassing all aspects of the Company's
operations. The Project focuses on mission critical systems
affecting delivery of service to the Company's customers and
business critical applications necessary to the operational and
financial stability of the Company. The Project is currently on
schedule with completion projected by June 1999. A Project
Committee comprised of Company officers reports directly to the
Chief Executive Officer on a monthly basis and to the Board of
Directors on the status of its efforts to assess and remediate
any Year 2000 Problem of the Corporation.
The Company is actively engaged in the coordination and
remediation of Year 2000 Problems potentially affecting
interconnection affiliations, electric transmission grid impact
planning, service reliability and emergency and operational
requirements with the North American Electric Reliability Council
(NERC) and the New York Power Pool (NYPP). The Company has
combined with domestic and international electric utilities in
developing and sharing information through the Electric Power
Research Institute (EPRI) data base addressing Year 2000 Problem
assessment, testing and remediation of digital and embedded
systems. Under the NERC guidelines, the Company's remediation is
scheduled for completion by July 1999. The Company's state
regulatory body, the New York Public Service Commission, has
accepted the NERC guidelines and schedule. The Company has
joined in similar initiatives to facilitate Year 2000 Problem
solving among electric and gas utilities under the auspices of
the Edison Electric Institute (EEI) and American Gas Association
(AGA), respectively.
The Company has not experienced any significant Year 2000
Problems to date nor does it anticipate problems which may impact
the Company's ability to provide uninterrupted service to its
customers. However, given the complexity of Year 2000 Problems
and the Company's technology sensitive industry, even the most
comprehensive and intensive program cannot guarantee that an
unforeseen problem will not occur. Therefore, all Company
operational emergency, disaster recovery and contingency plans
currently in place are being reviewed against potential Year 2000
Problem impacts. A Year 2000 Problem contingency plan to deal
with any unanticipated problems which may occur will be to deal
with any unanticipated problems which may occur will be in place
by the summer of 1999 and will address the reasonably likely
worst-case scenarios. This Contingency Plan will identify
supplemental staffing required to manually operate critical
systems and intervene to resolve unanticipated problems. The
Company also plans for an independent, external review and
assessment of all Project activities by the second quarter of
1999.
Scope & Status
The Project began in 1995 to determine the potential for the Year
2000 Problem to interrupt the Company's ability to provide
reliable electric and gas services to its customers. The Project
Committee was established to address the issues and established
Year 2000 Problem project teams for each major operating area
(Generation, Transmission & Distribution, Engineering &
Environmental, Information Systems and Energy Control) to address
the following key components:
1. Computer hardware and software operating systems and
infrastructure;
2. Information applications, including customer service,
financial and human resource systems;
3. Telecommunication systems;
4. Digital systems and devices with embedded processors such
as power instrumentation, controls and metering; and
5. Major suppliers.
As of October 31, 1998, that part of the Project dealing with the
inventory and assessment of all known Company mission critical
and business critical systems had been completed. These items
are those believed by the Company to affect the delivery of
service to the customer, the integrity of the environment, the
financial and operational infrastructure of the Company and the
safety of individuals.
That part of the Project dealing with the remediation, testing
and implementation of required modifications to Company assets to
eliminate Year 2000 Problems and achieve Year 2000 compliant
status is on, or ahead of, schedule. The design, development and
testing of Company Contingency Planning is following the
guidelines for content and completeness as issued by the NERC.
The process of identifying and prioritizing critical suppliers,
has been completed with evaluation of supplier status currently
in progress. To identify the Company's critical suppliers, the
Company's materials control and fuels procurement personnel
reviewed those materials and services required for support of
mission and business critical activities. These results were
reviewed with management and formed the basis of direct written
requests to suppliers for information on their Year 2000
compliance. Evaluation of responses to those requests will
determine future verification procedures. Validation of supplier
compliance may include on-site verification of their Year 2000
readiness information, including individual and/or industry
compliance test results. Supplier contingency planning is
scheduled to be developed concurrently and as part of the
Company's overall Contingency Planning.
Costs
Total Projects costs for all activities, including inventory,
remediation and testing required to become Year 2000 compliant
are not deemed material nor significant relative to the Company's
financial position. It is expected that all Project expenditures
will be paid for by the Company from its normal operating and
maintenance budgets.
Of a total Project estimate of $3,000,000, approximately
$1,121,000 has been expended through October, 1998, including
$762,500 of internal labor charges. The Company does not expect
final Project costs to exceed this estimate; however, no
assurances can be given.
Risks
The reasonably likely worst-case scenario would be a failure by
the Company and/or its suppliers to correct a material Year 2000
Problem, which could result in an interruption in the Company's
ability to deliver electric and/or gas service to customers,
thereby adversely impacting the ability of major customers to
continue effective operations. If such interruption extended for
a lengthy period of time, it could result in a loss of revenue
that would have a material adverse effect on the Company's
financial position. Additionally, Year 2000 related problems
could disrupt the operations of major customers, reducing their
use of Company services or their ability to pay for such
services. However, it is expected that any potential impact to
the Company specifically related to a Year 2000 Problem induced
business failure for any of its customers would not differ from a
"normal" extended Company service interruption attributable to
physical service failures, weather events or natural disaster.
The Company believes that the completion of the Project as
scheduled will significantly reduce the possibility of
significant interruptions to its normal business operations;
however, no assurance can be given.
2. Exhibit 12 is amended to read as attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Company has duly caused this report to be signed on its
behalf by the undersigned hereunder duly authorized.
CENTRAL HUDSON GAS & ELECTRIC CORPORATION
(Registrant)
By: (SGD.) DONNA S. DOYLE
Donna S. Doyle
Controller Authorized Officer
and
Chief Accounting Officer
Dated: December 8, 1998
<PAGE>
INDEX TO EXHIBITS
Exhibit Number
(Registration S-K
Item 601
Designation) Exhibit
(12) Statement Showing Computation of the
Ratio of Earnings to Fixed Charges and
the Ratio of Earnings to Combined fixed
Charges and Preferred Stock Dividends
(27) Financial Data Schedule, pursuant to
Item 601(c) of Regulation S-K.
</PAGE>
<PAGE>
<TABLE>
THIS EXHIBIT 12 OF THE 10-Q IS BEING SUBMITTED DUE TO A TYPOGRAPHICAL ERROR THAT OCCURRED IN THE ORIGINAL 10-Q
ELECTRONIC FILING OF 11/9/98
EXHIBIT 12
CENTRAL HUDSON GAS & ELECTRIC CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND RATIO OF EARNINGS TO FIXED CHARGES
AND PREFERRED DIVIDENDS
<CAPTION> 1998 Year Ended December 31,
3 Months 9 Months 12 Months 1997(1) 1996(1) 1995 1994
Ended Ended Ended
<S> Sept. 30 Sept. 30 Sept. 30
Earnings: <C> <C> <C> <C> <C> <C> <C>
A. Net Income $13,810 $43,018 $ 52,789 $ 55,086 $ 56,082 $ 52,722 $ 50,929
B. Federal Income Tax 7,789 23,561 24,893 26,237 31,068 28,687 26,806
C. Earnings before Income Taxes 21,599 66,579 77,682 81,323 87,150 81,409 77,735
D. Total Fixed Charges
Interest on Mortgage Bonds 3,559 10,678 14,237 14,237 15,112 16,862 19,624
Interest on Other Long-Term Debt 2,174 6,524 8,799 8,860 8,505 9,063 7,917
Other Interest 896 2,667 3,390 2,647 2,626 1,917 1,784
Interest Portion of Rents 243 748 1,016 1,020 1,094 1,522 1,561
Amortization of Premium & Expense
on Debt 227 679 906 906 940 1,069 1,793
7,099 21,296 28,348 27,670 28,277 30,433 32,679
E. Total Earnings $28,698 $87,875 $106,030 $108,993 $115,427 $111,842 $110,414
Preferred Dividend Requirements:
F. Allowance for Preferred Stock
Dividends Under IRC Sec 247 $ 807 $ 2,422 $ 3,230 $ 3,230 $ 3,230 $ 4,903 $ 5,127
G. Less Allowable Dividend Deduction 32 96 127 127 127 528 528
H. Net Subject to Gross-up 775 2,326 3,103 3,103 3,103 4,375 4,599
I. Ratio of Earnings before Income
Taxes to Net Income (C/A) 1.564 1.548 1.472 1.476 1.554 1.544 1.526
J. Pref. Dividend (Pre-tax) (HxI) 1,212 3,601 4,568 4,580 4,822 6,755 7,018
K. Plus Allowable Dividend Deduction 32 96 127 127 127 528 528
L. Preferred Dividend Factor 1,244 3,697 4,695 4,707 4,949 7,283 7,546
M. Fixed Charges (D) 7,099 21,296 28,348 27,670 28,277 30,433 32,679
N. Total Fixed Charges
and Preferred Dividends $ 8,343 $24,993 $ 33,043 $ 32,377 $ 33,226 $ 37,716 $ 40,225
O. Ratio of Earnings to Fixed
Charges (E/D) 4.04 4.13 3.74 3.94 4.08 3.68 3.38
P. Ratio of Earnings to Fixed Charges
and Preferred Dividends (E/N) 3.44 3.52 3.21 3.37 3.47 2.97 2.74
(1) Restated to properly reflect the exclusion of AFUDC from fixed charges.
</TABLE>
</PAGE>
