<PAGE>
<PAGE> 2
- -------------------------------------------------------------------
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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, 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 1-7176
THE COASTAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 74-1734212
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Coastal Tower
Nine Greenway Plaza
Houston, Texas 77046-0995
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 877-1400
---------------------------
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 28, 1995, there were outstanding 104,408,397 shares of
Common Stock, 33-1/3 cents par value per share, and 413,179 shares of Class
A Common Stock, 33-1/3 cents par value per share, of the Registrant.
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<PAGE>
<PAGE> 3
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements.
The financial statements of The Coastal Corporation and its
subsidiaries (the "Company") 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 sales of natural gas and petroleum products.
<TABLE>
THE COASTAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Millions of Dollars)
<CAPTION>
March 31, December 31,
ASSETS 1995 1994
-------------- -------------
(Unaudited)
<S> <C> <C>
Current Assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . $ 71.7 $ 73.5
Receivables, less allowance for doubtful
accounts of $21.0 million (1995) and
$19.0 million (1994) . . . . . . . . . . . . . . . . . . . . . . 1,288.7 1,306.0
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . 682.8 818.1
Prepaid expenses and other . . . . . . . . . . . . . . . . . . . . . 209.7 230.3
----------- -----------
Total Current Assets . . . . . . . . . . . . . . . . . . . . . . 2,252.9 2,427.9
----------- -----------
Property, Plant and Equipment - at cost:
Natural gas systems . . . . . . . . . . . . . . . . . . . . . . . . 5,771.4 5,763.7
Refining, crude oil and chemical facilities . . . . . . . . . . . . 2,032.1 2,005.7
Gas and oil properties - at full-cost . . . . . . . . . . . . . . . 1,292.1 1,283.7
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 732.0 722.8
----------- -----------
9,827.6 9,775.9
Accumulated depreciation, depletion and amortization . . . . . . . . 3,515.7 3,441.2
----------- -----------
6,311.9 6,334.7
----------- -----------
Other Assets:
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 539.8 544.5
Investments - equity method . . . . . . . . . . . . . . . . . . . . 380.7 378.3
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 813.1 849.2
----------- -----------
1,733.6 1,772.0
----------- -----------
$ 10,298.4 $ 10,534.6
----------- -----------
----------- -----------
</TABLE>
See Notes to Consolidated Financial Statements.
- 1 -
<PAGE>
<PAGE> 4
<TABLE>
THE COASTAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Millions of Dollars)
<CAPTION>
March 31, December 31,
LIABILITIES AND STOCKHOLDERS' EQUITY 1995 1994
-------------- -------------
(Unaudited)
<S> <C> <C>
Current Liabilities:
Notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 90.7 $ 57.2
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . 1,645.3 1,942.0
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 364.9 329.1
Current maturities on long-term debt . . . . . . . . . . . . . . . . 159.0 185.3
----------- -----------
Total Current Liabilities . . . . . . . . . . . . . . . . . . . . 2,259.9 2,513.6
----------- -----------
Debt:
Long-term debt, excluding current maturities . . . . . . . . . . . . 3,650.4 3,520.5
Subordinated long-term debt . . . . . . . . . . . . . . . . . . . . - 199.7
----------- -----------
3,650.4 3,720.2
----------- -----------
Deferred Credits and Other:
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . 1,462.3 1,473.9
Other deferred credits . . . . . . . . . . . . . . . . . . . . . . . 424.2 369.1
---------- ----------
1,886.5 1,843.0
---------- ----------
Mandatory Redemption Preferred Stock:
Issued by subsidiaries . . . . . . . . . . . . . . . . . . . . . . . .6 .6
---------- ----------
Common Stock and Other Stockholders' Equity:
Cumulative preferred stock (with aggregate liquidation
preference of $209.7 million) . . . . . . . . . . . . . . . . . . 2.7 2.7
Class A common stock . . . . . . . . . . . . . . . . . . . . . . . . .1 .1
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.3 36.2
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . 1,215.6 1,214.7
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . 1,378.8 1,336.0
----------- -----------
2,633.5 2,589.7
Less common stock in treasury - at cost . . . . . . . . . . . . . . 132.5 132.5
----------- -----------
2,501.0 2,457.2
----------- -----------
$ 10,298.4 $ 10,534.6
----------- -----------
----------- -----------
</TABLE>
See Notes to Consolidated Financial Statements.
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<PAGE> 5
<TABLE>
THE COASTAL CORPORATION AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED OPERATIONS
(Millions of Dollars, Except Per Share)
<CAPTION>
Three Months Ended
March 31,
---------------------
1995 1994
--------- --------
(Unaudited)
<S> <C> <C>
Operating Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,618.3 $ 2,700.8
--------- ---------
Operating Costs and Expenses:
Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,897.2 1,920.6
Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 443.2 463.4
Depreciation, depletion and
amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93.8 93.8
--------- ---------
2,434.2 2,477.8
--------- ---------
Operating Profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184.1 223.0
--------- ---------
Other Income - net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.4 16.0
--------- ---------
Other Expenses:
General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.2 13.5
Interest and debt expense, less $1.8 million (1995)
and $1.6 million (1994) capitalized . . . . . . . . . . . . . . . . . . . . . 109.6 102.5
Taxes on income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.1 41.9
--------- ---------
143.9 157.9
--------- ---------
Net Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57.6 81.1
Dividends on Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3 4.4
--------- ---------
Net Earnings Available
to Common Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 53.3 $ 76.7
--------- ---------
--------- ---------
Net Earnings Per Common
and Common Equivalent Share . . . . . . . . . . . . . . . . . . . . . . . . . . $ .51 $ .73
--------- ---------
--------- ---------
Cash Dividends Per Common Share . . . . . . . . . . . . . . . . . . . . . . . . . . $ .10 $ .10
--------- ---------
--------- ---------
</TABLE>
See Notes to Consolidated Financial Statements.
- 3 -
<PAGE>
<PAGE> 6
<TABLE>
THE COASTAL CORPORATION AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED COMMON STOCK AND OTHER STOCKHOLDERS' EQUITY
(Millions of Dollars and Thousands of Shares)
<CAPTION>
Three Months Ended March 31,
----------------------------------------------------
1995 1994
----------------------- -----------------------
Shares Amount Shares Amount
---------- ---------- ---------- ----------
(Unaudited)
<S> <C> <C> <C> <C>
Preferred stock, par value
33-1/3 cents per share, authorized 50,000,000 shares:
Cumulative convertible preferred:
$1.19, Series A, redemption or liquidation
amount of $33 per share:
Beginning balance . . . . . . . . . . . 63 $ - 65 $ -
Converted to common . . . . . . . . . . - - (1) -
---------- ---------- ---------- ----------
Ending balance . . . . . . . . . . . . . 63 - 64 -
---------- ---------- ---------- ----------
---------- ----------
$1.83, Series B, redemption or liquidation
amount of $50 per share:
Beginning balance . . . . . . . . . . . 84 .1 89 .1
Converted to common . . . . . . . . . . (1) - (2) -
---------- ---------- ---------- ----------
Ending balance . . . . . . . . . . . . . 83 .1 87 .1
---------- ---------- ---------- ----------
---------- ----------
$5.00, Series C, redemption or liquidation
amount of $100 per share:
Beginning balance . . . . . . . . . . . 34 - 35 -
Converted to common . . . . . . . . . . - - - -
---------- ---------- ---------- ----------
Ending balance . . . . . . . . . . . . . 34 - 35 -
---------- ---------- ---------- ----------
---------- ----------
Cumulative preferred:
$2.125, Series H, liquidation amount
of $25 per share:
Beginning and ending balance . . . . . . 8,000 2.6 8,000 2.6
---------- ---------- ---------- ----------
---------- ----------
Class A common stock, par value 33-1/3 cents per share,
authorized 2,700,000 shares:
Beginning balance . . . . . . . . . . . . . . 416 .1 423 .1
Converted to common . . . . . . . . . . . . . (5) - (8) -
Conversion of preferred stock and
exercise of stock options . . . . . . . . . 4 - 12 -
---------- ---------- ---------- ----------
Ending balance . . . . . . . . . . . . . . . 415 .1 427 .1
---------- ---------- ---------- ----------
---------- ----------
See Notes to Consolidated Financial Statements.
- 4 -
<PAGE>
<PAGE> 7
Common stock, par value 33-1/3 cents per share, authorized
250,000,000 shares:
Beginning balance . . . . . . . . . . . . . . 108,726 36.2 108,512 36.2
Conversion of preferred stock . . . . . . . . 5 - 11 -
Conversion of Class A common stock . . . . . 5 - 8 -
Exercise of stock options . . . . . . . . . . 34 .1 119 -
---------- ---------- ---------- ----------
Ending balance . . . . . . . . . . . . . . . 108,770 $ 36.3 108,650 $ 36.2
---------- ---------- ---------- ----------
---------- ----------
</TABLE>
See Notes to Consolidated Financial Statements.
- 5 -
<PAGE>
<PAGE> 8
<TABLE>
THE COASTAL CORPORATION AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED COMMON STOCK AND OTHER STOCKHOLDERS' EQUITY
(Millions of Dollars and Thousands of Shares)
(Continued)
<CAPTION>
Three Months Ended March 31,
----------------------------------------------------
1995 1994
----------------------- -----------------------
Shares Amount Shares Amount
---------- ---------- ---------- ----------
(Unaudited)
<S> <C> <C> <C> <C>
Additional paid-in capital:
Beginning balance . . . . . . . . . . . . . . . $ 1,214.7 $ 1,209.3
Exercise of stock options . . . . . . . . . . . .9 3.4
---------- ----------
Ending balance . . . . . . . . . . . . . . . . . 1,215.6 1,212.7
---------- ----------
Retained earnings:
Beginning balance . . . . . . . . . . . . . . . 1,336.0 1,162.7
Net earnings for period . . . . . . . . . . . . 57.6 81.1
Dividends on preferred stock . . . . . . . . . . (4.3) (4.4)
Dividends on common stock . . . . . . . . . . . (10.5) (10.4)
---------- ----------
Ending balance . . . . . . . . . . . . . . . . . 1,378.8 1,229.0
---------- ----------
Less treasury stock - at cost . . . . . . . . . . . 4,395 132.5 4,416 133.1
---------- ---------- ---------- ----------
---------- ----------
Total . . . . . . . . . . . . . . . . . . . . . . . $ 2,501.0 $ 2,347.6
---------- ----------
---------- ----------
</TABLE>
See Notes to Consolidated Financial Statements.
- 6 -
<PAGE>
<PAGE> 9
<TABLE>
THE COASTAL CORPORATION AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED CASH FLOWS
(Millions of Dollars)
<CAPTION>
Three Months Ended
March 31,
------------------------
1995 1994
-------- --------
(Unaudited)
<S> <C> <C>
Net Cash Flow From Operating Activities:
Net earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 57.6 $ 81.1
Add (subtract) items not requiring (providing) cash:
Depreciation, depletion and amortization . . . . . . . . . . . . . . 94.8 95.0
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . 5.8 8.9
Amortization of producer contract reformation costs . . . . . . . . . 7.2 10.2
Distributed (undistributed) earnings from equity investments . . . . .3 (11.8)
Working capital and other changes, excluding changes
relating to cash and non-operating activities:
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . 25.2 (223.5)
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135.3 (27.5)
Prepaid expenses and other . . . . . . . . . . . . . . . . . . . . 14.4 13.0
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . (281.7) 39.7
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . 35.8 129.0
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56.3 4.2
-------- --------
151.0 118.3
-------- --------
Cash Flow From Investing Activities:
Purchases of property, plant and equipment . . . . . . . . . . . . . . . (80.9) (83.3)
Proceeds from sale of property, plant and equipment . . . . . . . . . . 3.8 4.4
Additions to investments . . . . . . . . . . . . . . . . . . . . . . . . (10.1) (1.6)
Proceeds from investments . . . . . . . . . . . . . . . . . . . . . . . 10.7 3.6
Recovery of gas supply prepayments . . . . . . . . . . . . . . . . . . . .1 .1
-------- --------
(76.4) (76.8)
-------- --------
Cash Flow From Financing Activities:
Increase (decrease) in short-term notes . . . . . . . . . . . . . . . . 33.5 (89.5)
Proceeds from issuing common stock . . . . . . . . . . . . . . . . . . . 1.0 3.2
Proceeds from long-term debt issues . . . . . . . . . . . . . . . . . . 109.0 153.8
Payments to retire long-term debt . . . . . . . . . . . . . . . . . . . (205.1) (138.3)
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (14.8) (14.8)
-------- --------
(76.4) (85.6)
-------- --------
Net Decrease in Cash and Cash Equivalents . . . . . . . . . . . . . . . . . (1.8) (44.1)
Cash and Cash Equivalents at Beginning of Period . . . . . . . . . . . . . 73.5 159.2
-------- --------
Cash and Cash Equivalents at End of Period . . . . . . . . . . . . . . . . $ 71.7 $ 115.1
-------- --------
-------- --------
</TABLE>
See Notes to Consolidated Financial Statements.
- 7 -
<PAGE>
<PAGE> 10
THE COASTAL CORPORATION 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 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 $70.9 million and $61.0
million for the three months ended March 31, 1995 and 1994, respectively.
Cash payments (refunds) for income taxes amounted to $(1.5) million and
$28.7 million for the three months ended March 31, 1995 and 1994,
respectively.
2. Inventories
Inventories were as follows (millions of dollars):
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
-------------- -------------
(Unaudited)
<S> <C> <C>
Refined products, crude oil and chemicals . . . . . . . . . . . . . $ 480.0 $ 596.5
Natural gas in underground storage . . . . . . . . . . . . . . . . . 27.9 34.8
Coal, materials and supplies . . . . . . . . . . . . . . . . . . . . 174.9 186.8
---------- ----------
$ 682.8 $ 818.1
---------- ----------
---------- ----------
</TABLE>
The excess of replacement cost over the carrying value of natural gas
in underground storage carried by the last-in, first-out method was
approximately $21.9 million at March 31, 1995 and $31.2 million at December
31, 1994.
3. Common Stock
On March 31, 1995, 4,069,069 shares of Common Stock of the Company were
reserved for employee stock option plans, 771,477 shares were reserved for
conversion of the Series A, B, and C Preferred Stocks, 415,124 shares were
reserved for conversion of outstanding Class A Common Stock and 39,526
shares were reserved for conversion of Class A Common Stock subject to
future issuance. The Class A Common Stock reserved for future issuance
consists of 18,172 shares reserved for employee stock option plans and
21,354 shares reserved for conversion of the Series A, B, and C Preferred
Stocks.
- 8 -
<PAGE>
<PAGE> 11
4. Income Taxes
Provisions for federal and state income taxes were as follows (millions
of dollars):
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------
1995 1994
--------- ---------
(Unaudited)
<S> <C> <C>
Current Income Taxes:
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 14.2 $ 29.1
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 3.9
--------- ---------
14.3 33.0
--------- ---------
Deferred Income Taxes:
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.0 9.0
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (.2) (.1)
--------- ---------
5.8 8.9
--------- ---------
$ 20.1 $ 41.9
--------- ---------
--------- ---------
</TABLE>
Interim period provisions for federal income taxes are based on
estimated effective annual income tax rates.
5. Litigation, Regulatory and Environmental Matters
Litigation
A subsidiary of Coastal initiated a suit against TransAmerican Natural
Gas Corporation ("TransAmerican") in the District Court of Webb County,
Texas for breach of two gas purchase agreements. In February 1993,
TransAmerican filed a Third Party Complaint and a Counterclaim in this
action against Coastal and certain subsidiaries. TransAmerican alleged
breach of contract, fraud, conspiracy, duress, tortious interference and
violations of the Texas Free Enterprises and Anti-trust Act arising out of
the gas purchase agreements. Final judgment in this matter was entered April
22, 1994. The subsidiary was awarded approximately $2.0 million, including
pre-judgment interest and attorney fees. All of TransAmerican's claims and
causes of action were denied. The judgment has been appealed by
TransAmerican and the case is presently pending before the Court of Appeals
for the Fourth Judicial District at San Antonio, Texas.
In December 1992, certain of CIG'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 CIG 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 1995, the trial court granted summary
judgment in favor of CIG, holding that the four year statute of limitations
had not been tolled, certain releases are valid, and dismissing all tort
- 9 -
<PAGE>
<PAGE> 12
claims and claims for breach of any duty of disclosure. The remaining claims
were tried to a jury which, in May 1995, found that CIG had underpaid
royalties by $140,000, which CIG is not required to pay because the jury
upheld CIG's affirmative defense of quasi-estoppel. This case is subject to
appeal after the trial court enters a judgment on the jury verdict.
Numerous 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.
Regulatory Matters
On April 8, 1992, the FERC issued Order No. 636 ("Order 636"), which
required significant changes in the services provided by interstate natural
gas pipelines. Subsidiaries of the Company and numerous other parties have
sought judicial review of aspects of Order 636. The case is currently in the
briefing phase before the United States Court of Appeals for the D.C.
Circuit.
On November 1, 1993, ANR Pipeline Company ("ANR Pipeline") placed its
Order 636 restructured services and rates into effect. Several persons,
including ANR Pipeline, have sought judicial review of aspects of the FERC's
orders approving ANR Pipeline's restructuring filings. Those appeals have
been held in abeyance by the United States Court of Appeals for the D.C.
Circuit, pending further order. On March 24, 1994, the FERC issued its
"Fourth Order on Compliance Filing and Third Order on Rehearing," which
addressed numerous rehearing issues and confirmed that after minor required
tariff modifications, ANR Pipeline is now fully in compliance with Order 636
and the requirements of the orders on its restructuring filings. The FERC
issued a further order regarding certain compliance issues on July 1, 1994.
In accordance with this order, ANR Pipeline filed revised tariff sheets on
July 18, 1994, which were accepted by order issued April 12, 1995.
On March 10, 1992, ANR Pipeline submitted to the FERC a comprehensive
Interim Settlement designed to resolve all outstanding issues resulting from
its 1989 rate case and its 1990 proposed service restructuring proceeding.
The Interim Settlement became effective November 1, 1992 and expired with
ANR Pipeline's implementation of Order 636 on November 1, 1993. Under the
Interim Settlement, gas inventory demand charges were collected from ANR
Pipeline's resale customers for the period November 1, 1992 through October
31, 1993. This method of gas cost recovery required refunds for any over-
collections and placed ANR Pipeline at risk for under-collections. As
required by the Interim Settlement, ANR Pipeline filed with the FERC on
April 29, 1994, a reconciliation report showing over-collections and,
therefore, proposed refunds totaling $45.1 million. Certain customers have
disputed the level of those refunds. By an order issued February 27, 1995,
the FERC directed ANR Pipeline to make immediate refunds of $45.1 million,
together with applicable interest, subject to further investigation of the
claims which the customers have made. On May 2, 1995, the FERC issued a
further order setting these issues for an evidentiary hearing. Applicable
refunds, including interest, were paid on March 29, 1995.
On November 1, 1993, ANR Pipeline filed a general rate increase with
the FERC under Docket No. RP94-43. The increase represents the effects of
- 10 -
<PAGE>
<PAGE> 13
higher plant investment, Order 636 restructuring costs, rate of return and
tax rate changes and increased costs related to the required adoption of
recent accounting rule changes, i.e., Statement of Financial Accounting
Standards No. 106, "Employers' Accounting for Postretirement Benefits Other
Than Pensions" and Statement of Financial Accounting Standards No. 112,
"Employers' Accounting for Postemployment Benefits." On March 23, 1994, the
FERC issued an order granting and denying various requests for summary
disposition and establishing hearing procedures for issues remaining to be
investigated in this proceeding. The order required the reduction or
elimination of certain costs which resulted in revised rates that reflect an
$85.7 million increase in the cost of service from that approved in the
Interim Settlement and a $182.8 million increase over ANR Pipeline's
approved rates for its restructured services under Order 636. On April 29,
1994, ANR Pipeline filed a motion with the FERC that placed the new rates
into effect May 1, 1994, subject to refund. On September 21, 1994, the FERC
accepted ANR Pipeline's filing in compliance with the March 23, 1994 order,
subject to further modifications including an additional reduction in cost
of service of approximately $5 million. ANR Pipeline submitted its
compliance filing to the FERC on October 6, 1994, which the FERC accepted by
order issued February 8, 1995, subject to a further compliance filing
requirement. This compliance filing was submitted by ANR Pipeline on March
10, 1995, and was accepted by order issued May 3, 1995, subject to one
additional compliance requirement, which ANR Pipeline expects to submit in
May 1995. Further, on December 8, 1994, the FERC issued its order denying
rehearing of the March 23, 1994 order. On January 26, 1995, ANR Pipeline
sought judicial review of these orders before the U.S. Court of Appeals for
the D.C. Circuit.
ANR Pipeline has executed a Settlement Agreement (the "Settlement
Agreement") with Dakota Gasification Company ("Dakota") and the Department
of Energy which resolves litigation concerning purchases of synthetic gas by
ANR Pipeline from the Great Plains Coal Gasification Plant (the "Plant").
That litigation, originally filed in 1990 in the United States District
Court in North Dakota, involved claims regarding ANR Pipeline's obligations
under certain gas purchase and transportation contracts with the Plant. The
Settlement Agreement resolves all disputes between the parties, amends the
gas purchase agreement between ANR Pipeline and Dakota and terminates the
transportation contract. The Settlement Agreement is subject to final FERC
approval, including an approval for ANR Pipeline to recover the settlement
costs from its customers. On August 3, 1994, ANR Pipeline filed a petition
with the FERC requesting: (a) that the Settlement Agreement be approved; (b)
an order approving ANR Pipeline's proposed tariff mechanism for the recovery
of the costs incurred to implement the Settlement Agreement; and (c) an
order dismissing a proceeding currently pending before the FERC, wherein
certain of ANR Pipeline's customers have challenged Dakota's pricing under
the original gas supply contract. On October 18, 1994, the FERC issued an
order consolidating ANR Pipeline's petition with similar petitions of three
other pipeline companies and setting the Settlement Agreement and other
Dakota-related proceedings for limited hearing before an Administrative Law
Judge who must render an initial decision by December 31, 1995. On December
20, 1994, ANR Pipeline filed its testimony, and has responded to numerous
discovery requests. Intervenors from the ratepayer group submitted their
answering testimony on March 28, 1995. The hearing is scheduled to commence
on June 20, 1995.
Order 636 provides mechanisms for recovery of transition costs
associated with compliance with that Order. ANR Pipeline has estimated that
its transition costs will amount to approximately $150 million, which will
consist primarily of gas supply realignment costs, the cost of stranded
pipeline investment and the Dakota costs described above. As of March 31,
- 11 -
<PAGE>
<PAGE> 14
1995, ANR Pipeline has incurred transition costs in the amount of $45.4
million. ANR Pipeline has filed for recovery of approximately $40.5 million
of these transition costs, which have been accepted and made effective by
the FERC, subject to refund and further proceedings. On May 1, 1995, ANR
Pipeline filed for recovery of an additional $4 million, which ANR Pipeline
expects will also be accepted subject to refund and further proceedings. In
addition, ANR Pipeline has filed for recovery of approximately $90 million
of costs associated with the Settlement Agreement, as discussed above.
Additional transition costs filings will be made by ANR Pipeline in the
future.
On March 31, 1993, CIG filed with the 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 CIG which resolved all of the issues in the proceeding. CIG 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. CIG 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.
CIG, ANR Pipeline, ANR Storage Company and Wyoming Interstate Company,
Ltd., subsidiaries of the Company, are regulated by the FERC. Certain of the
above regulatory matters and other regulatory issues remain unresolved among
these companies, their customers, their 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 or results of operations. 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.
Environmental Matters
The Company's operations are subject to extensive and evolving federal,
state and local environmental laws and regulations. The Company anticipates
capital expenditures of $70 million in 1995 to comply with such laws and
regulations. The majority of the 1995 expenditures is attributable to
construction projects on the sulfur recovery units at two of the Company's
refineries. The Company currently anticipates capital expenditures for
environmental compliance for the years 1996 through 1998 of $20 to $40
million per year. 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." Certain subsidiaries of the Company have been named
as a potentially responsible party ("PRP") in several "Superfund" waste
disposal sites. At 18 sites for which the Environmental Protection Agency
("EPA") has developed sufficient information to estimate total clean-up
costs of approximately $400 million, the Company estimates its pro-rata
exposure, to be paid over a period of several years, is approximately $5
million and has made appropriate provisions. At six other sites, the EPA is
currently unable to provide the Company with an estimate of total clean-up
costs and, accordingly, the Company is unable to calculate its share of
- 12 -
<PAGE>
<PAGE> 15
those costs. Finally, at four other sites, the Company has paid amounts to
other PRPs or to the EPA as its proportional share of associated clean-up
costs. As to these latter sites, the Company believes that its activities
were de minimis.
There are additional areas of environmental remediation
responsibilities which may fall on 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. Coastal is also supplying reduced-emission reformulated
gasoline in all markets where it is required or optionally requested.
In March 1995, the California Regional Water Quality Control Board
brought an administrative action against Pacific Refining Company ("PRC"),
in which Coastal has an indirect 50% interest, alleging that PRC violated
the California Water Code by failing to comply with its discharge water
permit from December 1993 through March 1995. The Company believes that this
action could result in monetary sanctions which, while not material to the
Company and its subsidiaries, could exceed $100,000.
The Texas Natural Resources Conservation Commission ("TNRCC") alleges
that Coastal Refining & Marketing, Inc., a subsidiary of the Company, has
violated certain solid and hazardous waste laws and regulations, including
the Resources Conservation and Recovery Act. The TNRCC has referred the
allegations to the office of the Attorney General of the State of Texas. The
Company believes that this action could result in monetary sanctions which,
while not material to the Company and its subsidiaries, could exceed
$100,000.
Future information and developments will require the Company to
continually reassess the expected impact of these environmental matters.
However, the Company has evaluated its total environmental exposure based on
currently available data, including its potential joint and several
liability, and believes that compliance with all applicable laws and
regulations will not have a material adverse impact on the Company's
liquidity, financial position or results of operations.
- 13 -
<PAGE>
<PAGE> 16
Item 2.A. 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
-------------------------------
March 31, December 31,
1995 1994
------------- ---------------
(Unaudited)
<S> <C> <C>
Net return on average common stockholders' equity . . . . 8.7% 10.0%
Cash flow from operating activities to long-term debt . . 19.2% 18.0%
Total debt to total capitalization . . . . . . . . . . . 60.9% 61.7%
Times interest earned (before tax) . . . . . . . . . . . 1.7 1.8
</TABLE>
The reductions in the ratios for net return on average common
stockholders' equity and times interest earned are due to decreased earnings
in the 1995 first quarter. A decrease in long-term debt accounts for the
changes in the cash flow from operating activities to long-term debt and
total debt to total capitalization ratios.
Financing for capital expansion, mandatory debt retirements and other
expenditures will be provided by internally generated funds, existing credit
lines and new financings.
Funding for certain proposed projects is anticipated to be provided
through non-recourse project financings in which the projects' assets and
contracts will be pledged as collateral. Equity participation by other
entities will be considered. To the extent required, cash for equity
contributions to projects will be from general corporate funds.
The Company continues to maintain a financial position that will enable
it to generate and obtain capital for financing needs in the foreseeable
future. Unused lines of credit at March 31, 1995 were as follows (millions
of dollars):
<TABLE>
<CAPTION>
<S> <C>
Short-term . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 671.2
Long-term* . . . . . . . . . . . . . . . . . . . . . . . . . . . 588.1
---------
$ 1,259.3
---------
---------
<FN>
<F1>
*$235 million of unused long-term credit lines is dedicated to a specific use.
</FN>
</TABLE>
- 14 -
<PAGE>
<PAGE> 17
Results of Operations
The change in the Company's earnings for the three-month period ended
March 31, 1995 in comparison to the same period in 1994 is a result of the
following:
Operating Revenues. The operating revenues by segment were as follows
(millions of dollars):
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------
1995 1994
--------- ---------
(Unaudited)
<S> <C> <C>
Natural gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 792.7 $ 876.8
Refining and marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,646.1 1,669.1
Exploration and production . . . . . . . . . . . . . . . . . . . . . . . . . 63.4 81.7
Coal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114.0 109.4
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49.8 46.9
Adjustments and eliminations . . . . . . . . . . . . . . . . . . . . . . . . (47.7) (83.1)
--------- ---------
$ 2,618.3 $ 2,700.8
--------- ---------
--------- ---------
</TABLE>
Operating Profit (Loss). The operating profit (loss) by segment was as
follows (millions of dollars):
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------
1995 1994
--------- --------
(Unaudited)
<S> <C> <C>
Natural gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 132.5 $ 128.8
Refining and marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.9 67.8
Exploration and production . . . . . . . . . . . . . . . . . . . . . . . . . 2.9 5.0
Coal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.3 24.2
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 (2.8)
--------- ---------
$ 184.1 $ 223.0
--------- ---------
--------- ---------
</TABLE>
Natural Gas. The decrease in operating revenues of $84.1 million can
be primarily attributed to decreased prices more than offsetting increased
volumes for the gas marketing companies. Also contributing to the decrease
was a reduction in revenues from the auctioning of gas by ANR Pipeline under
remaining gas purchase contracts. Transportation and storage revenues were
comparable for both periods as a slight volume increase was offset by a
slight price decrease.
- 15 -
<PAGE>
<PAGE> 18
Purchases decreased $70.4 million from the 1994 period as reduced
prices more than offset increased volumes for the gas marketing companies.
Gross profit decreased by $13.7 million from the 1994 first quarter.
The operating profit increase of $3.7 million in the first quarter of
1995 results from higher margins of $2.6 million, increased volumes of $3.5
million and decreased operating expenses of $15.8 million partially offset
by an increase in the amortization of previously deferred costs primarily
associated with above market gas purchases of $11.0 million; increased
depreciation, depletion and amortization of $1.1 million and other decreases
of $6.1 million. The operating expense decrease results from reduced
expenses for gas and gas liquids handling and gas used in operations. The
previously deferred costs associated with above market gas purchases are
being recovered in transportation revenues pursuant to Order 636.
Refining and Marketing. Operating revenues decreased by $23.0 million
in the 1995 first quarter as reduced sales volumes were partially offset by
higher sales prices. Purchases increased by $29.1 million as increased
prices more than offset reduced volumes, resulting in a gross profit
decrease of $52.1 million.
The operating profit decrease of $43.9 million results from reduced
margins of $49.4 million and reduced volumes of $6.4 million partially
offset by decreased operating expenses of $10.6 million and other of $1.3
million. The operating expense decrease results primarily from reduced
volumes.
Exploration and Production. The decrease in operating revenues of
$18.3 million in the first quarter of 1995 resulted from reduced natural gas
sales volumes and prices and decreased revenues from natural gas marketing
activities, partially offset by increased prices for crude oil.
The operating profit decrease of $2.1 million results from lower prices
and volumes for natural gas of $14.2 million offset by increases for crude
oil (primarily price) of $3.1 million and plant products of $3.4 million;
decreased depreciation, depletion and amortization of $3.2 million and other
increases of $2.4 million. The decreased depreciation, depletion and
amortization is a result of lower rates and volumes.
Coal. The increase in coal operating revenues of $4.6 million
results from increased volumes partially offset by lower prices. Operating
profit increased $.1 million as the revenue increase of $4.6 million and
decreased depreciation, depletion and amortization of $.2 million were
partially offset by increased operating expenses of $4.7 million. The
increase in operating expenses resulted from the higher sales volumes.
Other. The $2.9 million increase in operating revenues resulted
primarily from trucking and power operations. The operating profit increase
of $3.3 million resulted from the revenue increase of $2.9 million and
reduced expenses of $.4 million. The reduced expenses were primarily
attributable to the trucking operations.
Interest and Debt Expense. Interest and debt expense increased by $7.1
million as higher rates on variable rate debt were partially offset by lower
debt levels.
Taxes on Income. Federal income taxes decreased by $17.9 million in
the 1995 period as a result of decreased earnings partially offset by a
lower effective federal income tax rate. State income taxes decreased by
$3.9 million.
- 16 -
<PAGE>
<PAGE> 19
Environmental Matters
The Company's operations are subject to extensive and evolving federal,
state and local environmental laws and regulations. The Company anticipates
capital expenditures of $70 million in 1995 to comply with such laws and
regulations. The majority of the 1995 expenditures is attributable to
construction projects on the sulfur recovery units at two of the Company's
refineries. The Company currently anticipates capital expenditures for
environmental compliance for the years 1996 through 1998 of $20 to $40
million per year. 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." Certain subsidiaries of the Company have been named
as a potentially responsible party ("PRP") in several "Superfund" waste
disposal sites. At 18 sites for which the Environmental Protection Agency
("EPA") has developed sufficient information to estimate total clean-up
costs of approximately $400 million, the Company estimates its pro-rata
exposure, to be paid over a period of several years, is approximately $5
million and has made appropriate provisions. At six other sites, the EPA is
currently unable to provide the Company with an estimate of total clean-up
costs and, accordingly, the Company is unable to calculate its share of
those costs. Finally, at four other sites, the Company has paid amounts to
other PRPs or to the EPA as its proportional share of associated clean-up
costs. As to these latter sites, the Company believes that its activities
were de minimis.
There are additional areas of environmental remediation
responsibilities which may fall on 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. Coastal is also supplying reduced-emission reformulated
gasoline in all markets where it is required or optionally requested.
Future information and developments will require the Company to
continually reassess the expected impact of these environmental matters.
However, the Company has evaluated its total environmental exposure based on
currently available data, including its potential joint and several
liability, and believes that compliance with all applicable laws and
regulations will not have a material adverse impact on the Company's
liquidity, financial position or results of operations.
Item 2.B. Other Developments.
In May 1995, Coastal Markets, Ltd., a partnership owned by subsidiaries
of the Company, completed the purchase of the operating assets of Maverick
Markets, Inc., a chain of over 100 convenience stores based in Corpus
Christi, Texas. Coastal Markets, Ltd. is now operating these convenience
stores in and around Corpus Christi and south Texas.
In April 1995, Coastal's subsidiary, Coastal Power Production Company
("Coastal Power"), signed a project development agreement with Habibullah
Energy, Ltd., a Pakistani company, to develop a project to build and operate
a 140 megawatt power plant in Quetta, Pakistan at a cost of approximately
$135 million. The plant is expected to be fully operational by the end of
1997. Coastal's subsidiary's share of the project is 50%.
- 17 -
<PAGE>
<PAGE> 20
In February 1995, Coastal Power signed a letter of intent to form a
joint venture to build and operate one or more power plants of up to 120
megawatts in the industrial center of Wuxi City in the People's Republic of
China. In April, 1995, an affiliate of Coastal Power entered into a
definitive joint venture contract to build and operate the first of such
plants, a diesel-fired peaking plant having approximately 40 megawatts of
capacity. At that same time, the newly formed joint venture entered into
definitive agreements for the construction of such plant and the sale of the
electricity generated by such plant. The other joint venturers are Wuxi City
Chengdian New Energy Development Company Ltd., an affiliate of the local
power bureau and the purchaser of power from the plant, and China National
Aero-Engine Corporation, a subsidiary of Aviation Industries of China and
the engineering, procurement and construction contractor for the plant. The
Coastal Power affiliate's share of the costs of the 40 megawatt plant is
approximately $16 million.
ANR Pipeline has filed an application with the FERC to construct, at a
cost of $15.3 million, approximately 12 miles of new pipeline in the State
of Michigan (the "Link Project") which would interconnect to approximately 8
miles of new pipeline to be constructed by Niagara Gas Transmission, Ltd.
("Niagara"), a wholly-owned subsidiary of Consumers' Gas Company
("Consumers") at the Canadian-United States border. The new facilities will
have a capacity of 150 million cubic feet ("MMcf") per day and will serve
markets in the United States and Canada, including Consumers and Michigan
Consolidated Gas Company. On March 27, 1995, Niagara filed an application
with the National Energy Board of Canada for regulatory authorization for
the Canadian segment of the Link Project. Subject to the receipt of the
necessary FERC and Canadian regulatory approvals, the project could be in
service as early as November 1, 1995.
In August 1993, ANR Pipeline and NorAm Energy Corporation ("NorAm")
announced execution of a restructured agreement under which ANR Pipeline
would purchase an undivided property ownership interest equal to 250 MMcf
per day of capacity in NorAm's interstate pipeline facilities. In light of
current regulatory and market conditions, NorAm and ANR Pipeline have agreed
to terminate the agreement and substitute therefor agreements under which
NorAm will provide firm transportation service to ANR Pipeline up to a
maximum daily quantity of 100 MMcf from June 1, 1995 through the year 2005.
Effective September 9, 1994, Florida Power Corporation ("FPC") withdrew
as an equity partner in both the SunShine Interstate Transmission Company
and SunShine Pipeline Company partnerships. Interests in these partnerships
are now held by affiliates of ANR Pipeline and TransCanada PipeLines
Limited. FPC has also terminated its agreements with the partnerships to
transport gas on the proposed SunShine pipeline system effective March 2,
1995. In light of this termination, the partnerships have withdrawn their
applications with state and federal regulators and have exercised their
rights to terminate agreements with all other shippers on the system. Due to
market conditions, the SunShine pipeline project is unlikely to proceed in
the near future. Future development of this project is currently under
management review.
- 18 -
<PAGE>
<PAGE> 21
PART II
OTHER INFORMATION
Item 1. Legal Proceedings.
The information required hereunder is incorporated by reference
into Part II of this Report from Note 5 of the Notes to Consolidated
Financial Statements set forth in Part I of this Report and from Item 2.A.,
"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.
11 - Statement re Computation of Per Share Earnings.
27 - Financial Data Schedule.
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the quarter ended
March 31, 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.
THE COASTAL CORPORATION
(Registrant)
Date: May 11, 1995 By: COBY C. HESSE
-------------------------------
Coby C. Hesse
Senior Vice President
and Controller
(As Authorized Officer and
Chief Accounting Officer)
- 19 -
<PAGE>
<PAGE> 22
<TABLE>
INDEX TO EXHIBITS
<CAPTION>
Exhibit
Number Description
- ------------------------------------------------------------------------------------------------------------------
<S> <C>
11 Statement Re Computation of Per Share Earnings
27 Financial Data Schedule
</TABLE>
- 20 -
<PAGE>
<PAGE> 23
EXHIBIT 11
<TABLE>
THE COASTAL CORPORATION AND SUBSIDIARIES
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
(Millions of Dollars, Except Per Share Amounts,
and Thousands of Shares)
<CAPTION>
Three Months Ended
March 31,
---------------------
1995 1994
--------- ---------
(Unaudited)
<S> <C> <C>
COMMON STOCK AND EQUIVALENTS:
Net earnings applicable to common stock and
common stock equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 53.3 $ 76.7
--------- ---------
--------- ---------
Average number of common shares outstanding . . . . . . . . . . . . . . . . . . . . 104,468 104,162
Class A common shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 415 425
Common and Class A common share equivalents:
$1.19 Cumulative Convertible Preferred, Series A . . . . . . . . . . . . . . . . 234 238
Dilutive effect of outstanding stock options after
application of treasury stock method . . . . . . . . . . . . . . . . . . . . . . 200 374
--------- ---------
Average common and common equivalent shares . . . . . . . . . . . . . . . . . . . . 105,317 105,199
--------- ---------
--------- ---------
Net earnings per average common and common
equivalent share outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . $ .51 $ .73
--------- ---------
--------- ---------
ASSUMING FULL DILUTION:
Net earnings applicable to common stock and
common stock equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 53.3 $ 76.7
Dividends applicable to dilutive preferred stock:
Series C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 .1
--------- ---------
Adjusted net earnings assuming full dilution . . . . . . . . . . . . . . . . . . . $ 53.4 $ 76.8
--------- ---------
--------- ---------
Average number of common shares outstanding . . . . . . . . . . . . . . . . . . . . 104,468 104,162
Class A common shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 415 425
Common and Class A common share equivalents:
Series A preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . 234 238
Equivalent common and Class A common shares from
Series B and C Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . 559 581
Dilutive effect of outstanding stock options after
application of treasury stock method . . . . . . . . . . . . . . . . . . . . . . 229 403
--------- ---------
- 21 -
<PAGE>
<PAGE> 24
Fully diluted shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105,905 105,809
--------- ---------
--------- ---------
Fully diluted earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . $ .50 $ .73
--------- ---------
--------- ---------
</TABLE>
- 22
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COASTAL
CORPORATION FORM 10-Q QUARTELRY REPORT FOR THE PERIOD ENDED MARCH 31, 1995 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 72
<SECURITIES> 0
<RECEIVABLES> 1,289
<ALLOWANCES> 0
<INVENTORY> 683
<CURRENT-ASSETS> 2,253
<PP&E> 9,828
<DEPRECIATION> 3,516
<TOTAL-ASSETS> 10,298
<CURRENT-LIABILITIES> 2,260
<BONDS> 3,650
<COMMON> 36
1
3
<OTHER-SE> 2,462
<TOTAL-LIABILITY-AND-EQUITY> 10,298
<SALES> 2,618
<TOTAL-REVENUES> 2,636
<CGS> 1,897
<TOTAL-COSTS> 2,434
<OTHER-EXPENSES> 14
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 110
<INCOME-PRETAX> 78
<INCOME-TAX> 20
<INCOME-CONTINUING> 58
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 58
<EPS-PRIMARY> .51
<EPS-DILUTED> .50
