- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number 1-4874
COLORADO INTERSTATE GAS COMPANY
(Exact name of registrant as specified in its charter)
Delaware 84-0173305
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Two North Nevada Avenue
Colorado Springs, Colorado 80903-1727
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (719) 473-2300
---------------------------
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, and (2) has been subject to such filing
requirements for the past 90 days. Yes X No _____
As of October 31, 1995, there were outstanding 10 shares of common stock of
the Registrant, $5.00 par value per share, its only class of common stock. None
of the voting stock of the Registrant is held by non-affiliates.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements.
The financial statements of Colorado Interstate Gas Company and its
subsidiaries (the "Company" or "Colorado") are presented herein and are
unaudited, except for balances as of December 31, 1994, and therefore are
subject to year-end adjustments; however, all adjustments which are, in the
opinion of management, necessary for a fair statement of the results of
operations for the periods covered have been made. The adjustments which have
been made are of a normal recurring nature. Such results are not necessarily
indicative of results to be expected for the year due to seasonal variations and
market conditions affecting natural gas sales and transportation services.
COLORADO INTERSTATE GAS COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Thousands of Dollars)
<TABLE>
<CAPTION>
September 30, December 31,
ASSETS 1995 1994
------------- -----------
(Unaudited)
<S> <C> <C>
Plant, Property and Equipment, at cost:
Gas pipeline............................................................ $ 1,045,565 $ 1,016,188
Gas and oil properties, at full-cost.................................... 138,195 144,442
--------------- --------------
1,183,760 1,160,630
Accumulated depreciation, depletion and amortization.................... 650,323 635,300
--------------- --------------
533,437 525,330
--------------- --------------
Current Assets:
Cash.................................................................... 742 372
Receivables............................................................. 29,697 118,353
Receivables from affiliates............................................. 230,269 246,609
Inventories............................................................. 9,014 9,154
Prepaid expenses........................................................ 385 628
Current portion of deferred income taxes................................ 37,108 43,760
--------------- --------------
307,215 418,876
--------------- --------------
Other Assets:
Other deferred charges.................................................. 19,149 17,905
--------------- --------------
$ 859,801 $ 962,111
=============== ==============
</TABLE>
See Notes to Consolidated Financial Statements.
- 1 -
<PAGE>
COLORADO INTERSTATE GAS COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Thousands of Dollars)
<TABLE>
<CAPTION>
September 30, December 31,
STOCKHOLDERS' EQUITY AND LIABILITIES 1995 1994
--------------- --------------
(Unaudited)
<S> <C> <C>
Common Stock and Other Stockholders' Equity:
Common stock, $5 par value, authorized 10,000 shares; issued and
outstanding 10 shares at stated value................................ $ 27,561 $ 27,561
Additional paid-in capital.............................................. 19,035 19,035
Retained earnings....................................................... 406,608 364,827
------------- ------------
453,204 411,423
------------- ------------
Mandatory Redemption Preferred Stock, $100 par value, authorized 550,000 shares,
outstanding 5,560 shares:
5.50% Series......................................................... 556 556
------------- ------------
Debt:
Long-term debt.......................................................... 179,280 179,225
------------- ------------
Current Liabilities:
Accounts payable and accrued expenses................................... 126,286 248,287
Accounts payable to affiliates.......................................... 7,776 14,389
Taxes on income......................................................... 412 19,013
------------- ------------
134,474 281,689
------------- ------------
Deferred Credits:
Deferred income taxes................................................... 87,575 84,576
Other................................................................... 4,712 4,642
------------- ------------
92,287 89,218
------------- ------------
$ 859,801 $ 962,111
============= ============
</TABLE>
See Notes to Consolidated Financial Statements.
- 2 -
<PAGE>
COLORADO INTERSTATE GAS COMPANY AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED EARNINGS
(Thousands of Dollars)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- ---------------------
1995 1994 1995 1994
---------- ---------- --------- ---------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Revenues:
Operating revenues:
Nonaffiliates............................................. $ 77,632 $ 57,856 $ 242,297 $ 220,421
Affiliates................................................ 11,133 19,147 39,034 60,983
---------- ---------- --------- ---------
88,765 77,003 281,331 281,404
Other income - net........................................... 3,649 2,518 10,751 5,966
---------- ---------- --------- ---------
92,414 79,521 292,082 287,370
---------- ---------- --------- ---------
Costs and Expenses:
Cost of gas sold:
Nonaffiliates............................................. 8,513 4,055 26,906 32,542
Affiliates................................................ 1,139 3,180 3,297 5,075
---------- ---------- --------- ---------
9,652 7,235 30,203 37,617
Operation and maintenance.................................... 40,734 39,137 122,548 122,236
Depreciation, depletion and amortization..................... 9,759 10,242 28,849 30,761
Interest expense............................................. 4,366 4,733 13,662 14,154
Taxes on income.............................................. 9,480 5,296 33,416 26,625
---------- ---------- --------- ---------
73,991 66,643 228,678 231,393
---------- ---------- --------- ---------
Net Earnings.................................................... $ 18,423 $ 12,878 $ 63,404 $ 55,977
========== ========== ========= =========
</TABLE>
See Notes to Consolidated Financial Statements.
- 3 -
<PAGE>
COLORADO INTERSTATE GAS COMPANY AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED CASH FLOWS
(Thousands of Dollars)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
---------------------------
1995 1994
----------- ----------
(Unaudited)
<S> <C> <C>
Net Cash Flow From Operating Activities:
Net earnings .................................................................. $ 63,404 $ 55,977
Add (subtract) items not requiring (providing) cash:
Depreciation, depletion and amortization.................................... 28,849 30,761
Deferred income taxes....................................................... 9,325 (10,704)
Producer contract reformation cost recoveries............................... 106 3,012
Other....................................................................... 3,051 3,233
Working capital and other changes, excluding changes relating to cash and
non-operating activities:
Accounts receivable...................................................... 88,656 87,258
Receivables from affiliates.............................................. 13,419 2,749
Inventories.............................................................. 140 237
Prepaid expenses......................................................... 243 115
Accounts payable and accrued expenses.................................... (122,001) (11,932)
Accounts payable to affiliates........................................... (6,613) (21,204)
Taxes on income.......................................................... (18,601) 6,291
----------- ----------
59,978 145,793
----------- ----------
Cash Flow from Investing Activities:
Purchases of plant, property and equipment..................................... (39,525) (40,447)
Proceeds from sale of plant, property and equipment............................ 231 1,099
Investments - other............................................................ (1,845) 2,563
Net (increase) decrease in notes receivable from associated companies.......... 2,921 (76,188)
Gas supply prepayments and settlements......................................... (12) (28)
Recovery of gas supply prepayments............................................. 245 330
----------- ----------
(37,985) (112,671)
----------- ----------
Cash Flow from Financing Activities:
Preferred dividends paid....................................................... (23) (18)
Common dividends paid.......................................................... (21,600) (33,300)
----------- ----------
(21,623) (33,318)
----------- ----------
Net Increase (Decrease) in Cash................................................... 370 (196)
Cash at Beginning of Period....................................................... 372 704
----------- ----------
Cash at End of Period............................................................. $ 742 $ 508
=========== ==========
</TABLE>
See Notes to Consolidated Financial Statements.
- 4 -
<PAGE>
COLORADO INTERSTATE GAS COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies
For additional information relative to operations and financial position,
reference is made to the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1994. Certain minor reclassifications of prior period
statements have been made to conform with current reporting practices. The
effect of the reclassifications was not material to the Company's consolidated
results of operations or financial position.
Supplemental information relative to the Statement of Consolidated Cash
Flows includes the following: The Company made cash payments for interest and
financing fees, net of amounts capitalized, of $10.3 million and $8.7 million
for the nine months ended September 30, 1995 and 1994, respectively. Cash
payments for income taxes amounted to $31.3 million and $31.0 million for the
nine months ended September 30, 1995 and 1994, respectively.
Materials and supplies inventories are carried principally at average
cost. Gas stored underground is carried at last-in, first-out cost ("LIFO"). The
excess of replacement cost over the carrying value of gas in underground storage
carried by the LIFO method, which is classified as Plant, Property and
Equipment, was $20.6 million and $31.2 million at September 30, 1995 and
December 31, 1994, respectively.
The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of" ("FAS No. 121"), to be
effective in 1996. The provisions of this statement will require the Company to
review long-lived assets and certain identifiable intangibles for impairment
whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. FAS No. 121 also requires that a rate-regulated
enterprise recognize an impairment for the amount of costs that a regulator
excludes from the enterprise's allowable costs. If it is determined that an
impairment has occurred, the amount of the impairment should be charged to
earnings. The Company is in the process of reviewing the effects of FAS No. 121.
2. Income Taxes
Provisions for income taxes are composed of the following (thousands of
dollars):
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- ---------------------
1995 1994 1995 1994
---------- ---------- --------- ---------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Current Income Taxes:
Federal................................................... $ 3,582 $ 10,881 $ 22,258 $ 33,597
State..................................................... 99 1,091 1,833 3,732
---------- ---------- --------- ---------
3,681 11,972 24,091 37,329
---------- ---------- --------- ---------
Deferred Income Taxes
Federal................................................... 5,174 (5,964) 8,246 (9,764)
State..................................................... 625 (712) 1,079 (940)
---------- ---------- --------- ---------
5,799 (6,676) 9,325 (10,704)
---------- ---------- --------- ---------
Taxes on Income.............................................. $ 9,480 $ 5,296 $ 33,416 $ 26,625
========== ========== ========= =========
</TABLE>
Interim period provisions for income taxes are based on estimated
effective annual income tax rates.
- 5 -
<PAGE>
3. Common Stock
All of the issued and outstanding common stock of the Company is owned by
Coastal Natural Gas Company, a wholly-owned subsidiary of The Coastal
Corporation. Therefore, earnings and cash dividends per common share have no
significance and are not presented.
4. Litigation, Environmental and Regulatory Matters
Litigation Matters
In December 1992, certain of Colorado's natural gas lessors in the West
Panhandle Field filed a complaint in the U.S. District Court for the Northern
District of Texas claiming underpayment, breach of fiduciary duty, fraud and
negligent misrepresentation. Management believes that Colorado has numerous
defenses to the lessors' claims, including (i) that the royalties were properly
paid, (ii) that the majority of the claims were released by written agreement,
and (iii) that the majority of the claims are barred by the statute of
limitations. In March of 1995, the Trial Court granted a partial summary
judgment in favor of Colorado, holding that the four-year statute of limitations
had not been tolled, that the releases are valid, and dismissing all tort claims
and claims for breach of any duty of disclosure. The remaining claim for
underpayment of royalties was tried to a jury which, in May 1995, made findings
favorable to Colorado. On June 7, 1995, the Trial Court entered a judgment that
the lessors recover no monetary damages from Colorado and permanently estopping
the lessors from asserting any claim based on an interpretation of the contract
different than that asserted by Colorado in the litigation. The lessors' motion
for a new trial is pending.
Other lawsuits and other proceedings which have arisen in the ordinary
course of business are pending or threatened against the Company or its
subsidiaries.
Although no assurances can be given and no determination can be made at
this time as to the outcome of any particular lawsuit or proceeding, the Company
believes there are meritorious defenses to substantially all of the above claims
and that any liability which may finally be determined should not have a
material adverse effect on the Company's consolidated financial position or
results of operations.
Environmental Matters
The Company's operations are subject to extensive and evolving federal,
state and local environmental laws and regulations which may affect such
operations and costs as a result of their effect on the construction, operation,
and maintenance of its pipeline facilities. The Company anticipates annual
capital expenditures of $1 to $2 million over the next several years aimed at
maintaining compliance with such laws and regulations. Additionally, appropriate
governmental authorities may enforce the laws and regulations with a variety of
civil and criminal enforcement measures, including monetary penalties and
remediation requirements.
The Comprehensive Environmental Response, Compensation and Liability Act,
also known as "Superfund", as reauthorized, imposes liability, without regard to
fault or the legality of the original act, for disposal of a "hazardous
substance." The Company is not presently, and has not been in the past, a
potentially responsible party ("PRP") in any "Superfund" waste disposal sites.
However, the Company has received notice from a committee formed from a group of
55 companies who are named as PRPs at one site requesting the Company pay a de
minimis share (approximately $36,000) of the associated clean-up costs.
There are additional areas of environmental remediation responsibilities
which may fall upon the Company. The states have regulatory programs that
mandate waste clean-up. The Clean Air Act Amendments of 1990 include new
permitting regulations which will result in increased operating expenditures.
Future information and developments will require the Company to
continually reassess the expected impact of all applicable environmental laws
and regulations. Compliance with all applicable environmental protection laws
and regulations is not expected to have a material adverse impact on the
Company's liquidity, consolidated financial position or results of operations.
- 6 -
<PAGE>
Regulatory Matters
On March 31, 1993, Colorado filed with the Federal Energy Regulatory
Commission ("FERC") under Docket RP93-99 to increase its rates and such filing
became effective subject to refund on October 1, 1993. On November 10, 1994, the
FERC approved a settlement offer submitted by the Company which resolved all of
the issues in the proceeding. The Company has implemented the rates established
in the settlement for prospective application and was required to make refunds
as a result of the approval of the settlement. Such refunds were distributed in
March and April 1995 and totalled approximately $22 million, inclusive of
interest. The Company had fully accrued for these refunds and, therefore, such
refunds did not have an adverse effect on its consolidated financial position or
results of operations.
On October 31, 1995, Colorado filed an application with the FERC seeking
authority to transfer to CIG Field Services Company ("CFS"), a subsidiary of
Colorado, certain facilities presently used for the gathering of natural gas
that are subject to certificates of public convenience and necessity. In that
filing, Colorado requested that the FERC declare that in the hands of CFS the
transferred facilities will be considered "non-jurisdictional" gathering
facilities. The transferred facilities have a net book value of approximately
$36 million. Colorado has requested that the FERC issue an order approving the
application to be effective on September 30, 1996. Following receipt of
authorization, Colorado will transfer the certificated facilities along with
certain noncertificated gathering facilities to CFS. The facilities to be
transferred comprise most but not all of the Company's current gathering assets.
Once the facilities are transferred to CFS, the terms and conditions of service
performed by those facilities will cease to be subject to the FERC's general
jurisdiction under the Natural Gas Act of 1938, as amended (although the FERC
has indicated in other cases that, in certain very narrow circumstances, it will
assert regulatory authority over gathering by affiliates of interstate pipelines
such as CFS).
Certain regulatory issues remain unresolved between the Company, its
customers, its suppliers, and the FERC. The Company has made provisions which
represent management's assessment of the ultimate resolution of these issues.
While the Company estimates the provisions to be adequate to cover potential
adverse rulings on these issues, it cannot estimate when each of these issues
will be resolved.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
The Notes to Consolidated Financial Statements contain information that is
pertinent to the following analysis.
Liquidity and Capital Resources
The Company uses the following consolidated ratios to measure liquidity
and its ability to meet future funding needs and debt service requirements.
<TABLE>
<CAPTION>
Twelve Months Ended
----------------------------
September 30, December 31,
1995 1994
------------- ------------
(Unaudited)
<S> <C> <C>
Cash flow from operating activities to capital expenditures
and debt service requirements........................................... 214.1% 374.5%
Debt to total capitalization............................................... 28.3% 30.3%
Times interest earned (before tax)......................................... 8.3 7.4
</TABLE>
The decrease in the cash flow from operating activities to capital
expenditures and debt service requirements ratio is due mainly to working
capital changes as a result of decreased accounts payable and accrued expenses.
The decrease in the debt to total capitalization ratio is due to increased
retained earnings resulting from the first nine month's 1995 earnings. The
increase in the times interest earned ratio can be attributed to increased
earnings before tax and reduced interest expense.
- 7 -
<PAGE>
The Company's primary needs for cash are capital expenditures and debt
service requirements. Management believes that the Company's stable financial
position and earnings ability will enable it to continue to generate and obtain
capital for financing needs in the foreseeable future.
The Company is responding to the extensive changes in the natural gas
industry by continuing to take steps to operate its facilities at their maximum
efficient capacity, renegotiating the remaining gas purchase contracts which are
above market in an effort to lower its cost of gas and reduce take-or-pay
obligations, pursuing innovative marketing strategies and applying strict
cost-cutting measures.
The Financial Accounting Standards Board has issued FAS No. 121 to be
effective in 1996. The provisions of this statement will require the Company to
review long-lived assets and certain identifiable intangibles for impairment
whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. FAS No. 121 also requires that a rate-regulated
enterprise recognize an impairment for the amount of costs that a regulator
excludes from the enterprise's allowable costs. If it is determined that an
impairment has occurred, the amount of the impairment should be charged to
earnings. The Company is in the process of reviewing the effects of FAS No. 121.
Results of Operations
(All Amounts Are in Thousands of Dollars)
The change in the Company's earnings for the three and nine month periods
ended September 30, 1995, in comparison to the corresponding periods in 1994, is
a result of the following:
Operating Revenues. The operating revenues by segment were as follows
(thousands of dollars):
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- ---------------------
1995 1994 1995 1994
---------- ---------- --------- ---------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Natural gas.................................................. $ 86,777 $ 73,814 $ 276,624 $ 270,704
Exploration and production................................... 2,650 5,688 9,012 17,405
Eliminations................................................. (662) (2,499) (4,305) (6,705)
---------- ---------- --------- ---------
$ 88,765 $ 77,003 $ 281,331 $ 281,404
========== ========== ========= =========
</TABLE>
Operating revenues from natural gas operations for the three month period
ended September 30, 1995 increased from the comparable 1994 period due to a
decrease in reservations of $25,565 and a $2,917 increase due to transportation
and gathering volumes partially offset by a decrease in the average gas sales
prices of $6,597, reduced gas sales volumes amounting to $2,773, a decrease in
transportation and gathering average rates of $4,545 and other net decreases of
$1,604. Operating revenues for the nine month period ending September 30, 1995
increased from the comparable 1994 period due to a decrease in reservations of
$53,903 partially offset by decreases in the average gas sales prices of $16,933
and transportation and gathering average rates of $16,549, reduced gas sales
volumes amounting to $7,936, decreases of $2,384 due to reduced storage volumes
and $1,904 due to reduced transportation and gathering volumes and a net
decrease in other items of $2,277.
The decrease in exploration and production revenues for the three month
period ended September 30, 1995 is due to reduced natural gas volumes amounting
to $1,238, decreased average gas prices of $1,015 and other net decreases of
$785. The decrease in exploration and production revenues for the nine month
period ended September 30, 1995 is due to decreased natural gas volumes of
$5,169 and reduced average gas prices amounting to $3,436 offset by $212 of
other net increases.
- 8 -
<PAGE>
Other Income -- Net. The increase for both the three and nine month
periods ended September 30, 1995 is due primarily to increased interest income
from affiliates.
Cost of Gas Sold. The increase in the three month period ended September
30, 1995 from the comparable 1994 period is due to an $8,177 increase in gas
storage costs, increased transportation, gathering and exchange gas costs of
$1,387 and other increases of $1,421 partially offset by reduced gas purchase
costs of $8,568. The decrease in the nine month period ended September 30, 1995
is due to reduced gas purchase costs of $13,295, decreased royalty rates of
$1,827, reduced royalty volumes amounting to $838 and other decreases of $1,873,
partially offset by increased gas used in operations of $6,675, and increased
transportation, gathering and exchange gas costs of $3,744.
Operation and Maintenance. The increase for the three month period ended
September 30, 1995 as compared to the 1994 period is due mainly to production
incentive fee credits of $2,468 which terminated in 1994 partially offset by
other decreases of $871.
Depreciation, Depletion and Amortization (DD&A). The decrease for the
three month period ended September 30, 1995 as compared to the 1994 period is
the result of lower production volumes equating to $723 and $510 due to a
decreased DD&A rate in the exploration and production segment partially offset
by a $750 increase in the natural gas segment as a result of increased
depreciable plant. The decrease for the nine month period ended September 30,
1995 as compared to the 1994 period is the result of lower production volumes
amounting to $2,674 and $715 due to a decreased DD&A rate in the exploration and
production segment partially offset by a $1,477 increase in the natural gas
segment as a result of increased depreciable plant.
Operating Profit (Loss). The operating profit (loss) by segment was as
follows (thousands of dollars):
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- ---------------------
1995 1994 1995 1994
---------- ---------- --------- ---------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Natural gas.................................................. $ 30,924 $ 21,146 $ 106,420 $ 92,441
Exploration and production................................... (1,157) 742 (3,258) 2,036
---------- ---------- --------- ---------
$ 29,767 $ 21,888 $ 103,162 $ 94,477
========== ========== ========= =========
</TABLE>
The natural gas segment's operating profit for the three month period
ended September 30, 1995 increased by $9,778 from the comparable 1994 period
primarily as a result of increased operating revenues of $12,963 and other
income - net of $1,131 partially offset by increases in cost of gas sold of
$2,417; operation and maintenance expense of $1,597 and DD&A expense of $750.
The increase of $13,979 for the nine month period ended September 30, 1995 over
the same period in 1994 is primarily a result of increased operating revenue of
$5,920, increased other income net of $2,434 and decreased cost of gas sold of
$7,414 partially offset by a $312 increase in operation and maintenance expense
and a $1,477 increase in DD&A expense.
The operating profit for the exploration and production segment decreased
by $1,899 for the three month period ended September 30, 1995 compared with 1994
primarily as a result of reduced operating revenues of $3,038 partially offset
by a $1,233 decrease in DD&A expense. The decrease of $5,294 for the nine month
period ended September 30, 1995 from the same period in 1994 is primarily the
result of reduced operating revenues of $8,393 partially offset by a $3,389
decrease in DD&A expense.
Interest Expense. The decrease for both the three and nine month periods
ended September 30, 1995 is due primarily to a decrease in interest on provision
for rate refunds.
Taxes on Income. The increase for both the three and nine month periods
ended September 30, 1995 is due to increased earnings before taxes and a higher
effective federal income tax rate.
- 9 -
<PAGE>
Environmental Matters
The Company's operations are subject to extensive and evolving federal,
state and local environmental laws and regulations which may affect such
operations and costs as a result of their effect on the construction, operation
and maintenance of its pipeline facilities. The Company anticipates annual
capital expenditures of $1 to $2 million over the next several years aimed at
maintaining compliance with such laws and regulations. Additionally, appropriate
governmental authorities may enforce the laws and regulations with a variety of
civil and criminal enforcement measures, including monetary penalties and
remediation requirements.
The Comprehensive Environmental Response, Compensation and Liability Act,
also known as "Superfund," as reauthorized, imposes liability, without regard to
fault or the legality of the original act, for disposal of a "hazardous
substance." The Company is not presently, and has not been in the past, a
potentially responsible party ("PRP") in any "Superfund" waste disposal sites.
However, the Company has received notice from a committee formed from a group of
55 companies who are named as PRPs at one site requesting the Company pay a de
minimis share (approximately $36,000) of the associated clean-up costs.
There are additional areas of environmental remediation responsibilities
which may fall upon the Company. The states have regulated programs that mandate
waste clean-up. The Clean Air Act Amendments of 1990 include new permitting
regulations which will result in increased operating expenditures.
Future information and developments will require the Company to
continually reassess the expected impact of all applicable environmental laws
and regulations. Compliance with all applicable environmental protection laws
and regulations is not expected to have a material adverse impact on the
Company's liquidity, consolidated financial position or results of operations.
- 10 -
<PAGE>
PART II
OTHER INFORMATION
Item 1. Legal Proceedings.
The information required hereunder is incorporated by reference into
Part II of this Report from Note 4 of the Notes to Consolidated Financial
Statements set forth in Part I of this Report and from Item 2., "Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Environmental Matters," set forth in Part I of this Report.
Item 2. Changes in Securities.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
(27) Financial Data Schedule.
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the quarter ended
September 30, 1995.
SIGNATURES
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.
COLORADO INTERSTATE GAS COMPANY
(Registrant)
Date: November 9, 1995 By: DAN A. HOMEC
--------------------------------------------
Dan A. Homec
Assistant Vice President
and Controller
(As Authorized Officer and
Chief Accounting Officer)
- 11 -
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Description
- -------------------------------------------------------------------------------
27 Financial Data Schedule
- 12 -
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM COLORADO
INTERSTATE GAS COMPANY FORM 10-Q QUARTERLY REPORT FOR THE PERIOD ENDED SEPTEMBER
30, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 742
<SECURITIES> 0
<RECEIVABLES> 259,966
<ALLOWANCES> 0
<INVENTORY> 9,014
<CURRENT-ASSETS> 307,215
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<DEPRECIATION> 650,323
<TOTAL-ASSETS> 859,801
<CURRENT-LIABILITIES> 134,474
<BONDS> 179,280
<COMMON> 27,561
556
0
<OTHER-SE> 425,643
<TOTAL-LIABILITY-AND-EQUITY> 859,801
<SALES> 281,331
<TOTAL-REVENUES> 292,082
<CGS> 30,203
<TOTAL-COSTS> 181,600
<OTHER-EXPENSES> 0
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<INTEREST-EXPENSE> 13,662
<INCOME-PRETAX> 96,820
<INCOME-TAX> 33,416
<INCOME-CONTINUING> 63,404
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 63,404
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
