<PAGE>
EXHIBIT 99.2
VALLEY RESOURCES, INC. AND SUBSIDIARIES
Consolidated Condensed Statements of Earnings
(Unaudited)
<TABLE>
<CAPTION>
3
Months Ended 6 Months Ended
---------------------- -----------------------
Feb. 29,
Feb. 28, Feb. 29, Feb. 28,
2000
1999 2000 1999
--------
-------- -------- --------
(in
thousands except share and per share numbers)
<S> <C>
<C> <C> <C>
Operating Revenues:
Utility Gas Revenues $ 26,693
$ 23,345 $ 36,973 $ 33,169
Nonutility Revenues 6,152
5,856 12,270 11,302
-----------
----------- ----------- -----------
Total 32,845
29,201 49,243 44,471
-----------
----------- ----------- -----------
Operating Expenses:
Cost of Gas Sold 15,164
12,725 20,791 17,868
Cost of Sales - Nonutility 4,256
3,621 8,508 7,409
Operations 4,801
4,492 9,133 9,103
Maintenance 469
428 917 837
Depreciation and Amortization 914
852 1,827 1,708
Taxes - Other Than Federal Income 1,434
1,330 2,326 2,196
- Federal Income 1,729
1,775 1,422 1,326
-----------
----------- ----------- -----------
Total 28,767
25,223 44,924 40,447
-----------
----------- ----------- -----------
Operating Income 4,078
3,978 4,319 4,024
Other Income (Loss) - Net of Tax 91
81 (226) 150
-----------
----------- ----------- -----------
Total Income 4,169
4,059 4,093 4,174
-----------
----------- ----------- -----------
Interest Charges:
Long-Term Debt 571
610 1,140 1,230
Other 233
157 412 288
-----------
----------- ----------- -----------
Total 804
767 1,552 1,518
-----------
----------- ----------- -----------
Net Income $ 3,365
$ 3,292 $ 2,541 $ 2,656
===========
=========== =========== ===========
Average Number of Common
Shares Outstanding 4,986,620
4,976,890 4,983,013 4,980,682
Basic & Diluted Earnings Per Average
Common Share Outstanding $0.67
$0.66 $0.51 $0.53
Dividends Declared on Common Stock . $0.1875
$0.1875 $0.375 $0.375
</TABLE>
The accompanying Notes are an integral part of these statements
<PAGE>
VALLEY RESOURCES, INC. AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
<TABLE>
<CAPTION>
(Unaudited)
Feb. 29,
Aug. 31,
2000
1999
--------
--------
(in
thousands)
<S> <C>
<C>
ASSETS
Utility Plant - Net $ 52,774
$ 52,334
--------
--------
Leased Property - Net 1,189
1,556
--------
--------
Nonutility Property-Net 4,236
4,163
--------
--------
Other
Investments 1,701
1,740
--------
--------
Current Assets:
Cash 491
750
Accounts Receivable - Net 17,116
9,817
Deferred Unbilled Gas Costs 1,817
432
Fuel and Other Inventories (Note 3) 4,788
5,959
Prepayments 992
1,511
Common Stock held for Dividend Reinvestment-amounting
to 4,572 and 10,116 shares respectively (Note 4) 101
143
--------
--------
Total 25,305
18,612
--------
--------
Deferred Debits:
Recoverable Vacations Accrued 771
611
Unamortized Debt Discount and Expense 1,609
1,643
Prepaid Pensions 11,268
10,388
Recoverable Deferred FIT 5,950
6,062
Recoverable Transition Obligation 11
11
Other 4,065
3,103
--------
--------
Total 23,674
21,818
--------
--------
$108,879
$100,223
========
========
</TABLE>
The accompanying Notes are an integral part of these statements.
<PAGE>
VALLEY RESOURCES, INC. AND SUBSIDIARIES
Consolidated Condensed Balance Sheets (Cont'd)
<TABLE>
<CAPTION>
(Unaudited)
Feb. 29,
Aug. 31,
2000
1999
--------
--------
(in thousands)
<S> <C> <C>
CAPITALIZATION & LIABILITIES
Capitalization:
Common Stock $ 4,993 $
4,993
Paid In Capital 24,765
24,756
Retained Earnings 9,324
8,650
Less: Accounts Receivable from ESOP (2,492)
(2,594)
--------
--------
Total Common Stock Equity 36,590
35,805
--------
--------
Long-Term Debt (Less Current Maturities):
8% First Mortgage Bonds, Series Due 2022 19,932
20,029
7.7% Debentures, Due 2027 7,000
7,000
Notes Payable 2,342
2,444
--------
--------
Total Long-Term Debt 29,274
29,473
--------
--------
Total Capitalization 65,864
65,278
--------
--------
Revolving Credit Arrangement 2,400
2,400
--------
--------
Obligation Under Capital Lease 577
775
--------
--------
Current Liabilities:
Current Maturities of Long-Term Debt 150
150
Obligation Under Capital Lease 612
781
Notes Payable 8,200
4,800
Accounts Payable 7,803
5,386
Security Deposits & Refund Obligations 1,142
968
Taxes Accrued 1,798
609
Deferred Fuel Costs 624
427
Accrued Interest 728
761
Other 878
716
--------
--------
Total 21,935
14,598
--------
--------
Commitment and Contingencies
Deferred Credits 4,494
4,304
--------
--------
Deferred Federal Income Taxes 13,609
12,868
--------
--------
$108,879
$100,223
========
========
</TABLE>
The accompanying Notes are an integral part of these statements.
<PAGE>
VALLEY RESOURCES, INC. AND SUBSIDIARIES
Consolidated Condensed Statements of Cash Flows (Unaudited)
<TABLE>
<CAPTION>
For the 6 Months
Ended
-------------------
Feb. 29, Feb. 28,
2000 1999
-------- --------
(in thousands)
<S>
<C> <C>
Cash Flows from Operating Activities:
Net Income
$ 2,541 $ 2,656
Adjustments to Reconcile Net Income to Net Cash used in
Operating Activities:
Depreciation and Amortization
1,827 1,708
Provision for Uncollectibles
625 624
Deferred Federal Income Taxes
741 659
Amortization of ITC
(24) (24)
Change in Assets and Liabilities:
Accounts Receivable
(7,924) (7,324)
Deferred Fuel Costs
198 1,414
Unbilled Gas Costs
(1,385) (1,257)
Fuel and Other Inventories
1,172 1,067
Other Current Assets
(319) (215)
Accounts Payable, Accrued Expenses and Current Liabilities
3,780 1,764
Other - Net
(532) (35)
------- -------
Net Cash Provided by Operating Activities
700 1,037
------- -------
Cash Flows from Investing Activities:
Utility Capital Expenditures
(1,953) (1,860)
Nonutility Capital Expenditures
(388) (336)
Other Investments
39 (23)
------- -------
Net Cash Used by Investing Activities
(2,302) (2,219)
------- -------
Cash Flows from Financing Activities:
Dividends Paid
(1,867) (1,859)
Capital Stock Transactions
9 (33)
Retirement of Long-Term Debt
(199) (85)
Increase in Notes Payable
3,400 2,900
------- -------
Net Cash Provided by Financing Activities
1,343 923
------- -------
Net (Decrease) in Cash
(259) (259)
Cash - Beginning
750 813
------- -------
Cash - Ending
$ 491 $ 554
======= =======
Supplemental Disclosures of Cash Flow Information
Cash Paid During the Period for:
Interest
$ 1,585 $ 1,585
======= =======
Federal Income Taxes
$ 125 $ -0-
======= =======
Capital Lease Obligations Incurred
$ -0- $ 11
======= =======
</TABLE>
The accompanying Notes are an integral part of these statements.
<PAGE>
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Note 1
------
In the opinion of the Corporation, the accompanying unaudited
consolidated
condensed financial statements contain all adjustments
(consisting of only
normal recurring accruals and matters discussed in "Management's
Discussion and
Analysis of Financial Condition and Results of Operations")
necessary to present
fairly the financial position at February 29, 2000, the results
of operations
for the three- and six-months ended February 29, 2000 and February
28,1999 and
Statement of Cash Flows for the six-months ended February 29, 2000
and February
28, 1999.
The results of operations for the three- and six-month
periods ended
February 29, 2000 and February 28, 1999 are not necessarily
indicative of the
results to be expected for the full year.
Note 2
------
The Corporation computes basic and diluted earnings per
average common
share in accordance with SFAS 128, based on the weighted
average number of
shares outstanding during the period.
<TABLE>
<CAPTION>
(Unaudited)
(Unaudited)
3 Months Ended
6 Months Ended
-----------------------
-----------------------
Feb. 29, Feb. 28,
Feb. 29, Feb. 28,
2000 1999
2000 1999
---------- ----------
---------- ----------
<S> <C> <C>
<C> <C>
Net Income $3,364,578 $3,292,123
$2,541,089 $2,655,508
Weighted average shares outstanding 4,986,620 4,976,890
4,983,013 4,980,682
Basic and diluted earnings per share $0.67 $0.66
$0.51 $0.53
</TABLE>
Note 3
------
Inventories - Fuel and Other Inventories:
(in Thousands)
<TABLE>
<CAPTION>
(Unaudited)
February 29,
August 31,
2000
1999
------------
-----------
<S> <C>
<C>
Fuels (at average cost) $2,160
$3,462
Merchandise and Other (at average cost) 1,170
1,234
Merchandise (at LIFO) 1,458
1,263
------
------
$4,788
$5,959
======
======
</TABLE>
Note 4
------
Pursuant to the dividend reinvestment plan, stockholders
can reinvest
dividends and make limited additional investments in shares of
Common Stock.
Shares issued through dividend reinvestment can be acquired on the
open market
or original issue.
Note 5
------
On December 1, 1999, Southern Union Company and Valley
Resources, Inc.
announced that they have signed a definitive merger agreement under
which Valley
Resources, Inc. will ultimately merge into Southern Union
Company in a
transaction which is valued at approximately $160 million,
including assumption
of debt. See the section in "Management's Discussion and Analysis
of Financial
Condition and Results of Operations" entitled "Valley Resources
Inc./Southern
Union Company Merger" for further details.
