- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
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
incorporation or organization) Identification No.)
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 April 30, 1997, 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, 1996, 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.
<TABLE>
COLORADO INTERSTATE GAS COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Thousands of Dollars)
<CAPTION>
March 31, December 31,
ASSETS 1997 1996
--------------- --------------
(Unaudited)
<S> <C> <C>
Current Assets:
Cash.................................................................... $ 920 $ 539
Notes receivable from affiliates........................................ 177,321 139,390
Receivables............................................................. 50,490 51,961
Receivables from affiliates............................................. 27,785 51,056
Materials and supplies.................................................. 9,624 9,671
Prepaid expenses........................................................ 172 417
Current portion of deferred income taxes................................ 29,036 26,782
--------------- --------------
295,348 279,816
--------------- --------------
Plant, Property and Equipment, at cost:
Gas pipeline............................................................ 1,146,531 1,134,592
Gas and oil properties, at full-cost.................................... 132,383 125,024
--------------- --------------
1,278,914 1,259,616
Accumulated depreciation, depletion and amortization.................... 693,008 676,873
--------------- --------------
585,906 582,743
--------------- --------------
Other Assets:
Investments in affiliates............................................... 41,885 41,056
Other deferred charges.................................................. 4,963 5,307
--------------- --------------
46,848 46,363
--------------- --------------
$ 928,102 $ 908,922
=============== ==============
</TABLE>
See Notes to Consolidated Financial Statements.
- 1 -
<PAGE>
<TABLE>
COLORADO INTERSTATE GAS COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Thousands of Dollars)
<CAPTION>
March 31, December 31,
LIABILITIES AND STOCKHOLDER'S EQUITY 1997 1996
--------------- --------------
(Unaudited)
<S> <C> <C>
Current Liabilities:
Accounts payable and accrued expenses................................... $ 127,406 $ 132,641
Accounts payable to affiliates.......................................... 22,248 25,356
Taxes on income......................................................... 17,375 13,162
------------- ------------
167,029 171,159
------------- ------------
Debt:
Long-term debt.......................................................... 229,391 229,373
------------- ------------
Deferred Credits:
Deferred income taxes................................................... 87,973 85,849
Other................................................................... 5,867 5,889
------------- ------------
93,840 91,738
------------- ------------
Common Stock and Other Stockholder's 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.............................................. 19,037 19,037
Retained earnings....................................................... 391,244 370,054
------------- ------------
437,842 416,652
------------- ------------
$ 928,102 $ 908,922
============= ============
</TABLE>
See Notes to Consolidated Financial Statements.
- 2 -
<PAGE>
<TABLE>
COLORADO INTERSTATE GAS COMPANY AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED EARNINGS
(Thousands of Dollars)
<CAPTION>
Three Months Ended
March 31,
---------------------
1997 1996
--------- ---------
(Unaudited)
<S> <C> <C>
Revenues:
Operating revenues:
Nonaffiliates..................................................................... $ 96,548 $ 100,268
Affiliates........................................................................ 21,885 13,103
--------- ---------
118,433 113,371
Other income - net................................................................... 2,376 3,435
--------- ---------
120,809 116,806
Costs and Expenses:
Cost of gas sold:
Nonaffiliates..................................................................... 27,503 17,762
Affiliates........................................................................ 2,292 613
--------- ---------
29,795 18,375
Operation and maintenance............................................................ 41,403 35,917
Depreciation, depletion and amortization............................................. 11,186 10,195
Interest expense..................................................................... 5,585 4,459
Taxes on income...................................................................... 11,650 15,895
--------- ---------
99,619 84,841
Net Earnings............................................................................ $ 21,190 $ 31,965
========= =========
</TABLE>
See Notes to Consolidated Financial Statements.
- 3 -
<PAGE>
<TABLE>
COLORADO INTERSTATE GAS COMPANY AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED CASH FLOWS
(Thousands of Dollars)
<CAPTION>
Three Months Ended
March 31,
--------------------------
1997 1996
--------- ---------
(Unaudited)
<S> <C> <C>
Net Cash Flow From Operating Activities:
Net earnings ............................................................... $ 21,190 $ 31,965
Add (subtract) items not requiring (providing) cash:
Depreciation, depletion and amortization................................. 11,186 10,195
Deferred income taxes.................................................... (1,142) 1,440
Producer contract reformation cost recoveries............................ 8 34
Other.................................................................... 1,837 1,379
Working capital and other changes, excluding changes relating to cash and
non-operating activities:
Receivables........................................................... 1,471 2,375
Receivables from affiliates........................................... 23,271 (4,556)
Materials and supplies................................................ 47 229
Prepaid expenses...................................................... 245 (35)
Accounts payable and accrued expenses................................. (5,235) (6,406)
Accounts payable to affiliates........................................ (3,108) (2,312)
Taxes on income....................................................... 4,213 14,254
--------- --------
53,983 48,562
--------- --------
Cash Flow from Investing Activities:
Purchases of plant, property and equipment.................................. (8,296) (10,832)
Proceeds from sale of plant, property and equipment......................... 93 253
(Increase) decrease in gas stored........................................... (6,639) 411
Investments in affiliates................................................... (829) (2)
Net increase in notes receivable from affiliates............................ (37,931) (39,017)
--------- --------
(53,602) (49,187)
Cash Flow from Financing Activities:
Redemption of preferred stock............................................... - (85)
Gain on redemption of preferred stock....................................... - 2
Preferred dividends paid.................................................... - (8)
--------- --------
- (91)
--------- --------
Net Increase (Decrease) in Cash................................................ 381 (716)
Cash at Beginning of Period.................................................... 539 883
--------- --------
Cash at End of Period.......................................................... $ 920 $ 167
========= ========
</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, 1996. 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, financial position or cash flows.
The Company is regulated by, and subject to, the regulations and
accounting procedures of the Federal Energy Regulatory Commission ("FERC") and
had historically followed the reporting and accounting requirements of Statement
of Financial Accounting Standards No. 71, "Accounting for the Effects of Certain
Types of Regulation" ("FAS 71"). Effective November 1, 1996, Colorado
discontinued the application of FAS 71. This accounting change has no direct
effect on either the Company's ability to include the deferred items in future
rate proceedings or on its ability to collect the rates set thereby. The Company
believes this accounting change results in financial reporting which better
reflects the results of operations in the economic environment in which it
operates.
Materials and supplies inventories are carried principally at average
cost.
The Company adopted Statement of Financial Accounting Standards No. 125,
"Accounting for Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities" in 1997. The application of the new standard did not have a
material effect on the Company's consolidated results of operations, financial
position or cash flows.
The Company adopted Statement of Position 96-1 on Environmental
Remediation Liabilities in 1997. The application of the new statement is not
expected to have a material effect on the Company's consolidated results of
operations, financial position or cash flows.
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 $.7 million for the three months
ended March 31, 1997. The amount for the three months ended March 31, 1996 was
immaterial. Cash payments for income taxes amounted to $8.6 million for the
three months ended March 31, 1997 and $.1 million for the three months ended
March 31, 1996.
2. Income Taxes
Provisions for income taxes are composed of the following (thousands of
dollars):
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------
1997 1996
--------- ---------
(Unaudited)
<S> <C> <C>
Current Income Taxes:
Federal........................................................................ $ 11,978 $ 14,306
State.......................................................................... 814 149
--------- ---------
12,792 14,455
Deferred Income Taxes
Federal........................................................................ (976) 1,222
State.......................................................................... (166) 218
--------- ---------
(1,142) 1,440
Taxes on Income................................................................... $ 11,650 $ 15,895
========= =========
</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. On June 7, 1996, the same Plaintiffs sued Colorado
in state court in Amarillo, Texas for underpayment of royalties. Colorado
removed the second lawsuit to federal court which granted a stay of the second
lawsuit pending the outcome of the first lawsuit.
A natural gas producer has filed a claim on behalf of the U.S. government
in the U.S. District Court for the District of Columbia under the federal False
Claims Act. The Second Amended Complaint filed on May 24, 1996, against seventy
(70) defendants, including Colorado, alleges that the defendants' methods of
measuring the heating content and volume of natural gas purchased from
federally-owned or Indian properties have caused underpayment of royalties to
the U.S. government. Colorado, together with the other pipeline defendants,
filed a motion to dismiss. On March 27, 1997, the Court granted the motion and
dismissed, without prejudice, the claims against the Company and most of the
other pipeline defendants.
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,
results of operations or cash flows.
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
environmental 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.
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
- 6 -
<PAGE>
regulations is not expected to have a material adverse impact on the Company's
liquidity, consolidated financial position or results of operations.
Regulatory Matters
On March 29, 1996, Colorado filed with the FERC under Docket No. RP96-190
to increase its rates by approximately $30 million annually, to realign certain
transportation services and to add tariff language that would allow Colorado to
enter into "negotiated" rates (rates which could exceed the Company's
"cost-based" rates) in certain circumstances subject to FERC policies. On April
25, 1996, the FERC accepted the rate change filing and the transportation
service realignment to become effective October 1, 1996, subject to refund, and
also accepted the "negotiated rate" tariff provision to become effective May 1,
1996. While certain parties have sought judicial review of the acceptance of the
"negotiated rate" tariff provisions, those provisions are currently in effect
although Colorado has so far not entered into any "negotiated rate" agreements
under these provisions. With respect to the rate change and the transportation
service realignment, a hearing is schedule for August 1997 in the event that the
case cannot be settled.
In July 1996, the United States Court of Appeals for the D.C. Circuit
upheld the basic structure of the FERC's Order 636 (issued in April 1992) but
remanded to FERC, for further consideration, certain limited aspects of the
Order, including the 20-year term established in Order 636 as the "cap" to be
applied to evaluation of bids for renewal contracts on existing facilities. On
remand in February 1997, the FERC reduced the term "cap" to five years. Colorado
and others have sought rehearing of this change and on other aspects of the
Order on remand. Colorado argued in its rehearing request inter alia that its
FERC-approved settlement of its Order 636 compliance proceeding precludes
applying this change to Colorado's existing contracts entered into pursuant to
Colorado's FERC-approved tariff.
Certain of the above regulatory matters and other regulatory issues remain
unresolved among 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. As a result, the Company anticipates that
these regulatory matters will not have a material adverse effect on its
consolidated financial position, results of operations or cash flows. While the
Company estimates the provisions to be adequate to cover potential adverse
rulings on these and other 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.
Management's Discussion and Analysis of Financial Condition and Results of
Operations includes certain forward-looking statements reflecting the Company's
expectations in the near future; however, many factors which may affect the
actual results, including natural gas prices, market conditions, industry
competition and changing regulations, are difficult to predict. Accordingly,
there is no assurance that the Company's expectations will be realized.
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
March 31, December 31,
1997 1996
----------------- ------------
(Unaudited)
<S> <C> <C>
Cash flow from operating activities to capital expenditures
and debt service requirements........................................... 140.3% 130.9%
Total debt to total capitalization......................................... 34.4% 35.5%
Times interest earned (before tax)......................................... 6.4 7.5
</TABLE>
The increase in the cash flow from operating activities to capital
expenditures and debt service requirements ratio is due mainly to working
capital changes partially offset by decreased earnings. The decrease in the
total debt to total
- 7 -
<PAGE>
capitalization ratio is due to increased retained earnings resulting from 1997
first quarter earnings. The decrease in the times interest earned ratio can be
attributed to decreased earnings before tax.
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, pursuing innovative
marketing strategies and applying strict cost-cutting measures.
Results of Operations
The change in the Company's earnings for the three-month period ended
March 31, 1997, in comparison to the corresponding period in 1996, is a result
of the following:
Operating Revenues. The operating revenues by segment were as follows
(thousands of dollars):
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------
1997 1996
--------- ---------
(Unaudited)
<S> <C> <C>
Natural gas.......................................................................... $ 115,616 $ 109,766
Exploration and production........................................................... 8,832 4,988
Adjustments and eliminations......................................................... (6,015) (1,383)
--------- ---------
$ 118,433 $ 113,371
========= =========
</TABLE>
Operating revenues from natural gas operations increased $5.9 million for
the three months ended March 31, 1997 from the comparable 1996 period due to an
$11.1 million increase related to average gas sales prices, a $3.5 million
increase related to gas transportation rates, a $3.2 million increase resulting
from increased gas sales volumes and other net increases of $.6 million,
partially offset by a $9.8 million change in reservations and a decrease of $2.7
million resulting from reduced gathering volumes.
The $3.8 million increase in exploration and production revenues is due
primarily to $4.3 million resulting from increased average natural gas sales
prices offset by net decreases of $.5 million.
Other Income - Net. The decrease in 1997 from the comparable 1996 period
is the result of decreased interest income from affiliates.
Cost of Gas Sold. The $11.4 million increase in 1997 from the comparable
period in 1996 is primarily the result of a $16.8 million increase due to
average gas purchase rates and other increases of $.3 million partially offset
by $4.5 million due to system balancing requirements and decreased gas purchase
volumes of $1.2 million.
Operation and Maintenance. The $5.5 million increase in 1997 from the
comparable 1996 period is due to a $2.9 million increase in gas used in
operations, a $1.3 million increase in materials and supplies expenses, a $.8
million increase in professional and outside services and other increases of $.5
million.
Depreciation, Depletion and Amortization. The $1.0 million increase for
the 1997 period compared to the same period in 1996 is a result of a $.7 million
increase in the natural gas segment related to increased depreciable plant and
$.3 million related to increased production volumes in the exploration and
production segment.
- 8 -
<PAGE>
Operating Profit. The operating profit by segment was as follows
(thousands of dollars):
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------
1997 1996
--------- ---------
(Unaudited)
<S> <C> <C>
Natural gas.......................................................................... $ 33,429 $ 49,437
Exploration and production........................................................... 3,971 607
--------- ---------
$ 37,400 $ 50,044
========= =========
</TABLE>
The natural gas segment's operating profit decreased by $16.0 million for
the three months ended March 31, 1997 due largely to increased gas purchase
costs of $16.8 million resulting primarily from higher average rates and
increased operations and maintenance costs of $5.3 million partially offset by
increased operating revenues of $5.9 million due mainly to increased average
sales prices and other miscellaneous net increases of $.2 million.
The operating profit for the exploration and production segment increased
by $3.4 million primarily as a result of a $3.8 million increase in operating
revenues due largely to increased natural gas sales prices partially offset by
increases in operating and maintenance and depreciation expenses.
Interest Expense. The increase in 1997 from the comparable 1996 period is
due primarily to interest on a $50 million senior term loan, due 1999, which was
entered into August 27, 1996.
Taxes on Income. The income tax decrease in 1997 from the comparable 1996
period is due primarily to decreased earnings before income taxes.
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
environmental 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.
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.
- 9 -
<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 March
31, 1997.
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: May 12, 1997 By: DAN A. HOMEC
----------------------------------------------
Dan A. Homec
Assistant Vice President
and Controller
(As Authorized Officer and
Chief Accounting Officer)
- 10 -
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Description
- --------------------------------------------------------------------------------
27 Financial Data Schedule
- 11 -
<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 MARCH 31,
1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 920
<SECURITIES> 0
<RECEIVABLES> 255,596
<ALLOWANCES> 0
<INVENTORY> 9,624
<CURRENT-ASSETS> 295,348
<PP&E> 1,278,914
<DEPRECIATION> 693,008
<TOTAL-ASSETS> 928,102
<CURRENT-LIABILITIES> 167,029
<BONDS> 229,391
0
0
<COMMON> 27,561
<OTHER-SE> 410,281
<TOTAL-LIABILITY-AND-EQUITY> 928,102
<SALES> 118,433
<TOTAL-REVENUES> 120,809
<CGS> 29,795
<TOTAL-COSTS> 82,384
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,585
<INCOME-PRETAX> 32,840
<INCOME-TAX> 11,650
<INCOME-CONTINUING> 21,190
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 21,190
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
