FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1993
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 1-10032
PROVIDENCE ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
Rhode Island 05-0389170
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
100 Weybosset Street, Providence, Rhode Island 02903
(Address of principal executive offices)
(Zip Code)
401-272-9191
Registrant's telephone number, including area code
(Former name, former address and former fiscal year, if changed since last
report).
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No .
APPLICABLE ONLY TO CORPORATE ISSUERS:
Common stock, $1.00 par value, 5,512,650 shares outstanding at
February 14, 1994.
</PAGE>
PROVIDENCE ENERGY CORPORATION
FORM 10-Q
DECEMBER 31, 1993
PART I: FINANCIAL INFORMATION PAGE
Item 1 - Financial Statements
Consolidated Statements of Income for the
three and twelve months ended
December 31, 1993 and 1992 I-1
Consolidated Balance Sheets as of
December 31, 1993, December 31, 1992 and
September 30, 1993 I-2
Consolidated Statements of Cash Flow for the
three months ended December 31, 1993 and 1992 I-3
Consolidated Statements of Capitalization as of
December 31, 1993, December 31, 1992 and
September 30, 1993 I-4
Notes to Consolidated Financial Statements I-5
Item 2 - Management's Discussion and Analysis of
Financial Conditions and Results of Operations I-10
PART II: OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K II-1
Signature II-2
</PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PROVIDENCE ENERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE PERIODS ENDED DECEMBER 31
(Unaudited)
THREE MONTHS TWELVE MONTHS
1993 1992 1993 1992
(thousands, except per share amounts)
Operating revenues $ 62,957 $ 61,435 $210,839 $198,046
Cost of gas sold 38,774 37,431 127,657 116,497
Operating margin 24,183 24,004 83,182 81,549
Operating expenses:
Other operation 10,530 9,586 41,200 40,575
Maintenance 784 799 3,586 3,233
Depreciation and amortization 2,381 2,275 9,168 8,729
Taxes -
State gross receipts 1,863 1,520 6,091 4,999
Local property and other 1,618 1,669 6,794 6,773
Federal income 1,901 2,217 3,382 3,562
Total operating expenses 19,077 18,066 70,221 67,871
Operating income 5,106 5,938 12,961 13,678
Nonutility operations and other:
Revenues - - - 185
Operating costs - - - 211
Other income (loss), net 185 (57) 415 384
185 (57) 415 358
Income before interest expense 5,291 5,881 13,376 14,036
Interest expense:
Long-term debt 1,119 1,120 5,171 4,344
Other 318 491 1,425 2,519
Interest capitalized (34) (23) (128) (200)
1,403 1,588 6,468 6,663
Income before preferred stock
dividends of subsidiary 3,888 4,293 6,908 7,373
Preferred dividends of subsidiary (174) (174) (696) (696)
Net income applicable to
common stock $ 3,714 $ 4,119 $ 6,212 $ 6,677
======== ======== ======== ========
Net income per common share $ .68 $ .91 $ 1.24 $ 1.48
======== ======== ======== ========
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Dividends paid per common share $ .26 $ .25 $ 1.03 $ 1.00
======== ======== ========= ========
Weighted average common shares
outstanding 5,497.8 4,547.7 4,999.3 4,507.5
======== ======== ========= ========
PAGE I-1a
</PAGE>
PROVIDENCE ENERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(thousands)
December 31, December 31, September 30,
1993 1992 1993
ASSETS
Gas plant, at original cost $225,793 $213,825 $221,769
Less - Accumulated depreciation and
utility plant acquisition
adjustments 74,536 67,251 72,436
151,257 146,574 149,333
Nonutility property, net 2,096 2,179 2,118
Current assets:
Cash and temporary cash investments 4,805 2,402 1,455
Accounts receivable, less allowance of
$2,250 at 12/31/93, $2,399 at
12/31/92 and $2,404 at 9/30/93 31,246 26,329 17,238
Unbilled revenues 12,145 11,320 2,854
Deferred gas costs 24,425 2,517 16,453
Inventories, at average cost -
Liquefied natural gas, propane and
underground storage 9,921 7,574 11,390
Materials and supplies 1,859 1,652 1,854
Deferred capacity charges - 1,007 -
Prepaid and refundable taxes 4,640 5,851 7,170
Prepayments 1,037 1,088 910
90,078 59,740 59,324
Net assets of discontinued operations 280 309 295
Deferred charges and other assets 17,382 11,374 13,480
Total assets $261,093 $220,176 $224,550
======== ======== ========
CAPITALIZATION AND LIABILITIES
Capitalization
(See accompanying statement): $144,538 $126,740 $143,531
Current liabilities:
Notes payable 38,000 35,695 23,800
Current portion of long-term debt 2,071 1,918 466
Gas supplier refunds - 2,885 -
Accounts payable 23,078 16,190 18,618
Accrued taxes 7,975 8,251 7,560
Accrued vacation 1,718 1,707 1,703
Customer deposits 3,217 2,817 2,952
Other 3,688 2,759 3,408
79,747 72,222 58,507
Deferred credits and reserves:
Accumulated deferred Federal
income taxes 19,034 13,641 14,018
Unamortized investment tax credits 2,970 3,129 3,010
Other 14,804 4,444 5,484
36,808 21,214 22,512
Total capitalization and liabilities $261,093 $220,176 $224,550
======== ======== ========
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PROVIDENCE ENERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED DECEMBER 31
(Unaudited)
1993 1992
(thousands)
Cash provided by (used for)
Operations:
Income after interest expense $ 3,888 $ 4,293
Items not requiring cash -
Depreciation and amortization 2,399 2,354
Deferred Federal income taxes 145 167
Amortization of investment tax credits (40) (38)
Changes in assets and liabilities
which provided (used) cash:
Accounts receivable (14,008) (11,582)
Unbilled revenues (9,291) (7,956)
Deferred gas costs 428 (2,517)
Inventories 1,464 (14)
Deferred capacity charges - 336
Prepaid and refundable taxes 3,449 1,656
Prepayments (127) 127
Gas supplier refunds - 2,885
Accounts payable 5,260 5,764
Accrued taxes 681 842
Refundable gas costs - (1,795)
Accrued vacation, customer deposits
and other 560 (148)
Net cash used for operations (5,192) (5,626)
Investment Activities:
Expenditures for property, plant
and equipment (4,336) (3,959)
Deferred charges and other (46) (465)
Total (4,382) (4,424)
Financing Activities:
Issuance of common stock 439 416
Issuance of Mortgage Bonds 16,000
Payments on long-term debt (114) (122)
Increase (decrease) in notes payable, net (1,800) 12,285
Cash dividends on preferred stock (174) (174)
Cash dividends on common stock (1,427) (1,134)
Total 12,924 11,271
Increase in cash and cash equivalents 3,350 1,221
Cash and cash equivalents at beginning
of period 1,455 1,181
Cash and cash equivalents at end of period $ 4,805 $ 2,402
======= =======
Supplemental disclosure of cash-flow information:
Cash paid during period for-
Interest (net of amount capitalized) $ 943 $ 1,547
Income taxes (net of refunds) $ (258) $ 1,298
PAGE I-3
</PAGE>
PROVIDENCE ENERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CAPITALIZATION
(Unaudited)
(Thousands)
December 31, December 31, September 30,
1993 1992 1993
Common stock equity:
Common stock, $1 par
Authorized - 20,000 shares
Outstanding - 5,493 at 12/31/93,
4,561 at 12/31/92
and 5,486 at
9/30/93 $ 5,493 $ 4,561 $ 5,486
Amount paid in excess of par 52,014 35,774 51,582
Retained earnings 18,587 17,557 16,300
Total common stock equity 76,094 57,892 73,368
Cumulative preferred stock of subsidiary:
Providence Gas Company -
Redeemable 8.7% Series, $100 par
Authorized - 80 shares
Outstanding - 80 shares as of
12/31/93, 12/31/92 and 9/30/93 8,000 8,000 8,000
Long-term debt:
First mortgage bonds 61,000 53,200 61,000
Senior debentures - 7,533 -
Capital leases 1,515 1,967 1,629
Other - 66 -
Total long-term debt 62,515 62,766 62,629
Less: current portion 2,071 1,918 466
Long-term debt, net 60,444 60,848 62,163
Total capitalization $144,538 $ 126,740 $ 143,531
======== ========= =========
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PROVIDENCE ENERGY CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Accounting Policies
It is the Registrant's opinion that the financial
information contained in this report reflects all normal,
recurring adjustments necessary to a fair statement of the
results for the periods reported; however, such results are
not necessarily indicative of results to be expected for the
year, due to the seasonal nature of the Registrant's
operations. Certain information and footnote disclosures
normally included in financial statements prepared in
accordance with generally accepted accounting principles have
been condensed or omitted in this Form 10-Q pursuant to the
rules and regulations of the Securities and Exchange
Commission. However, the disclosures herein when read with
the annual report for 1993 filed on Form 10-K are adequate to
make the information presented not misleading.
Reclassifications
Certain prior year income statement amounts have been
reclassified for consistent presentation with the current
period.
Environmental Matters
Federal, state, and local laws and regulations
establishing standards and requirements for the protection of
the environment have increased both in number and in scope
within recent years. The Registrant cannot predict the
future impact of such standards and requirements, which are
subject to change and can take effect retroactively. The
Registrant continues to monitor the status of these laws and
regulations. Such monitoring involves the review of past and
current operations and properties. To the best of its
knowledge, subject to the following two paragraphs, the
Registrant believes it is in substantial compliance with such
laws and regulations. However, should future costs be
incurred, the Registrant anticipates recovery from third
parties or through its rate filings.
At one property formerly owned by the Registrant, a
study was done to determine the extent of the environmental
contamination at the property. This study is currently being
PAGE I-5
</PAGE>
reviewed by the Rhode Island Department of Environmental
Management. The Registrant is unable to predict the future
costs that may be incurred for this site. However, based
upon current information, the Registrant does not believe the
outcome of this matter will have a material impact on its
results of operations and financial condition.
In January 1990, the Registrant received notice from the
Massachusetts Department of Environmental Protection that it
is one of several "potentially responsible parties" under the
Comprehensive Environmental Response Compensation and
Liability Act and also the Superfund Amendment and
Reauthorization Act. This will require the Registrant to
share in clean-up cost, if any, at a waste disposal site in
Massachusetts. While no preliminary estimates of costs are
currently available, the Registrant's degree of
responsibility is believed to be minimal.
Management anticipates requesting rate relief for all
costs related to environmental matters and believes that the
resolution of these matters will not have a materially
adverse effect on the Registrant's results of operations and
financial condition.
FERC Order 636
In August 1992, the Federal Energy Regulatory Commission
issued a companion document to Order 636 (Issued April 1992)
called Order 636-A. A combination of principles contained in
the documents will make a number of significant changes to
the structure of services provided by interstate natural gas
companies. Furthermore, pipelines must provide
transportation services that are equal in quantity for all
gas supplies, whether purchased from the pipeline or another
supplier of natural gas.
In response to Order 636 and Order 636-A, the Registrant
has solicited supply proposals from major producers and
marketers. Also, the Registrant is reviewing different
pipeline service options and is exploring new underground
storage opportunities in an effort to restructure its
existing long-term contracts. These actions are expected to
permit the Registrant to achieve a diverse, secure, flexible
and economical supply portfolio. Additional one time
expenses, such as contract exit fees, are anticipated in the
short-term as a result of the Orders. At the appropriate
time, full recovery of certain costs related to the Orders
will be pursued by the Registrant through the regulatory
process.
PAGE I-6
</PAGE>
Based upon current information, the Registrant
anticipates transition costs to total $15 million. Of this
amount, the Registrant, as of November 1993, has currently
begun recovering $5.8 million through its Cost of Gas
Adjustment Clause (CGA). The Registrant has recorded a
liability of $15 million along with a regulatory asset
anticipating future recovery.
Furthermore, the Registrant expects to eventually
realize long-term savings in its gas costs. With the
necessary resources in place, the Registrant anticipates that
it can properly manage this matter and that this matter will
not have a material impact on the Registrant's financial
position or results of operations.
Properties
ProvGas owns properties that are located in Providence,
Rhode Island adjacent to the Providence River. These
properties, along with much of downtown Providence, appear to
have been the result of the filling of lands formerly flowed
by tidal waters. The extent to which ProvGas' properties
consist of such land cannot be established with precision,
but they most likely include its main distribution center and
the land on which is situated the Algonquin LNG storage tank.
In 1991, the Rhode Island Supreme Court issued an
opinion containing statements to the effect that the State
retains title to shoreland created by fill from ocean
dredging. The statements appear to contradict earlier
judicial authority to the effect that where the owner of land
abutting the river extends the upland out from the natural
shoreline to an established harbor line, all of the rights of
the public in the upland, as extended, are extinguished.
Although to date the Rhode Island Supreme Court has not
clarified its opinion and the Rhode Island legislature has
taken no meaningful action to resolve the problem, management
believes no action will be taken by the State which will
interfere in any material way with ProvGas' ability to
conduct its normal course of operations or impact its
financial condition.
FASB 106
On October 1, 1993, the Registrant adopted the
provisions of the Statement of Financial Accounting Standards
No. 106, "Employers' Accounting for Post-retirement Benefits
Other Than Pensions" (SFAS No. 106). SFAS No. 106 requires
that these benefits, which include health care and life
PAGE I-7
</PAGE>
insurance, be accrued over the service life of covered
employees. Prior to the adoption of SFAS 106, the Registrant
accounted for these costs when paid. The Registrant's
actuarially calculated amount of prior service costs
(transition obligation), not previously accrued, is estimated
at approximately $9.9 million. The Registrant's annual
expense for fiscal 1994, including the amortization of the
transition obligation over twenty years, is approximately
$1.5 million. The Registrant will recognize additional
expenses of $900,000 during fiscal 1994 as a result of SFAS
No. 106 as compared to the previous "pay-as-you-go" method.
The Registrant's estimated transition obligation and
expense under SFAS No. 106 are derived using a discount rate
of eight percent with a medical care cost trend of 13.8
percent. A one percent change in the medical care rate would
impact the estimated transition obligation by $1.3 million
while the change in the annual expense component would be
$100,000.
The Rhode Island Public Utility Commission (RIPUC) has
allowed the Registrant to recover only those post-retirement
benefit costs which can be tax effectively funded. The
Registrant expects to fund approximately $1.2 million of the
$1.5 million annual post-retirement benefit costs. The
$300,000 short-fall will be expensed without current
recovery.
The RIPUC has also required the Registrant to delay full
recovery of the $1.2 million funded amount. The Registrant
is allowed recovery of the incremental difference above the
"pay-as-you-go" amount (approximately $600,000) and the
amount tax effectively funded ($1.2 million) over a three
year period with one-third of the incremental cost recovered
each year.
Amounts funded, but not recovered during fiscal years
1994 and 1995 will be deferred and will be recovered over a
seven year period beginning in fiscal 1997. As of December
31, 1993, $200,000 has been deferred.
PAGE I-8
</PAGE>
FAS 109
The Company has adopted the Financial Accounting
Standards Board (FASB) new standard on Accounting for Income
Taxes (FAS 109). The accompanying financial statements
reflects this new accounting. The Company did not restate
prior periods.
The standard requires the use of the liability method of
accounting. Under this method, the existing deferred tax
accounts on the accompanying balance sheet have been adjusted
to reflect the effect of currently enacted tax rates
applicable to the years in which these taxes will become
payable. Also, the accounts have been adjusted to reflect
the cumulative timing differences for which deferred taxes
had not been previously recorded.
Consistent with regulatory precedent, the related
adjustments to the deferred tax accounts will be recovered
from or returned to ratepayers in future periods. As a
result, the adoption of FAS 109 has not had an impact on
current earnings and is not expected to impact future
earnings. The Company has recorded a net regulatory asset of
$3.7 million upon adoption of FAS 109.
PAGE I-9
</PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITIONS AND RESULTS OF OPERATIONS
The Registrant's current operating revenues and operating
margin have increased, while net income decreased over the
comparable periods presented, as shown in the table below:
THREE MONTHS TWELVE MONTHS
1993 1992 1993 1992
(thousands of dollars)
Operating revenues $62,957 $61,435 $210,839 $198,046
======= ======= ======== ========
Operating margin $24,183 $24,004 $ 83,182 $ 81,549
======= ======= ======== ========
Net income $ 3,714 $ 4,119 $ 6,212 $ 6,677
======= ======= ======== ========
Factors having a direct impact on these results were:
Rate Design: The Rhode Island Public Utilities
Commission (RIPUC) in fiscal 1993 approved The Providence Gas
Company's (ProvGas), the Registrant's largest natural gas
subsidiary, request to adopt a declining block rate structure.
This structure allows ProvGas to recover more fixed costs from
rates immediately when a customer begins buying natural gas.
Also, the structure will help balance customer bills during
the year and will help protect ProvGas and the customers
during periods of extreme weather conditions. This results in
a stabilization of earnings from year to year. For accounting
and gas cost recovery purposes, ProvGas will record the
embedded cost of gas using seasonal gas factors; $4.36 per Mcf
in the heating season (October through March) and $2.77 per
Mcf in the non-heating season (April through September). The
effect of the seasonal gas cost accounting will be that the
quarterly operating margin will decrease in the heating season
and increase in the non-heating season when compared to the
previous method. Annual earnings, however, should not be
affected by this rate design change.
Another significant attribute of the new rate design
structure as compared to the previous method is a higher
customer charge. The average monthly customer charge has been
increased to recognize that a substantial portion of ProvGas'
costs are relatively fixed and must be recovered from
customers even when gas consumption is less than expected.
PAGE I-10
</PAGE>
ProvGas' volumetric charge has decreased in order to off-set
the increased customer charge.
Degree Days: The following table illustrates the change
in degree days (weather) during the quarter and twelve month
periods this year versus last year.
1993 1992 Change % Change
Three months 1,998 2,007 (9) (.5)
Twelve months 5,709 5,769 (60) (1.0)
The net increase in the average number of customers for
the latest quarter and twelve month periods was approximately
2,200 and 1,500, respectively. Although the actual increase
for new customers exceeded one percent for both the current
quarter and twelve month period, this was offset by a greater
than normal number of shut-offs for non-payments and housing
vacancies during 1992. The modest increase was the result of
new housing construction and conversions from other energy
sources.
As a result of stable temperatures experienced during
the latest quarter and twelve month periods (as compared to
the prior year), residential sales (which provide the
Registrant with its greatest source of sales) increased 119
million cubic feet (MMcf) or .6 percent and 271 MMcf or 2.0
percent, respectively.
Non-firm sales for the current three and twelve month
periods decreased 200 MMcf or 15.3 percent and 2,714 MMcf or
40.3 percent, respectively. Non-firm revenues have decreased
$400,000 or 11.5 percent and $1.1 million or 9.1 percent for
the current three and twelve month periods, respectively, as
compared to last year. The decrease in non-firm sales for the
current quarter and twelve month periods reflects the
expiration of a short-term contract in November 1992 with a
cogeneration customer that was located outside of the
Registrant's service territory. However, this did not have a
material impact on the Registrant's financial position or
results of operation due to ProvGas' 1992 non-firm margin
sharing agreement.
Firm revenues were $59.6 million for the latest quarter,
an increase of $2.0 million or 3.5 percent over the same
period last year. For the current twelve month period, firm
revenues have increased by $13.8 million or 7.5 percent. The
increases are the result of higher gas costs (passed on to
PAGE I-11
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customers through the Cost of Gas Adjustment Clause (CGA) and
additional customers and rate increases implemented in
November 1993. For additional information on the rate case
awards, please refer to the discussion of liquidity and
capital resources below.
Overall, other operation and maintenance expenses have
increased during the current periods presented. The increase
for the current quarter was $930,000 or 8.9 percent while the
twelve month increase was $980,000 or 2.2 percent. The
increases during the current quarter and twelve month periods
were the result of normal wage increases granted due to
negotiated union contract terms and employee merit raises.
Also, due to compliance with the Federal Energy Regulatory
Commission's release of Order 636 and with the adoption of the
Financial Accounting Standards Board, Standard No. 106,
relative to post-retirement benefits, operating expenses have
further increased in an effort to comply with these
regulations. Refer to the disclosure of these issues in the
notes to the financial statements.
Taxes for the current twelve month period have increased
$900,000 or 6.1 percent. This was the result of an increase
in state gross receipts tax due to higher revenues recorded
during the current period.
Interest expenses for the latest three and twelve months
periods have decreased $185,000 or 11.6 percent and $195,000
or 2.9 percent, respectively. A decline in short-term
interest rates coupled with a decline in weighted average
borrowings caused a decrease in short-term interest expense.
Conversely, interest expenses on long-term debt increased
during the current twelve month period due to the timing of
payment of the called debt and when proceeds relative to the
issuance of First Mortgage Bonds, Series O, P & Q. Offsetting
the increase were sinking fund payments and the premature
retirement of First Mortgage Bonds, Series L and Senior
Debentures Series II.
LIQUIDITY AND CAPITAL RESOURCES
On October 14, 1993, ProvGas received approval from the
Rhode Island Public Utilities Commission (RIPUC) to implement
a new rate design, effective November 14, 1993, that will help
promote economic development and reduce the Registrant's
earnings sensitivity to weather. In addition to the improved
stability in earnings, the new rates are designed to increase
annual operating margin by approximately $700,000. Other
components of the rate award included an allowed return on
equity of 11.2 percent.
PAGE I-12
</PAGE>
On October 3, 1991, the Massachusetts Department of
Public Utilities (MDPU) approved a settlement order reached
between the Massachusetts Attorney General's Office and North
Attleboro Gas Company regarding a rate request filed by North
Attleboro Gas. Due to the magnitude of the award (32
percent), the MDPU ordered North Attleboro Gas to phase-in the
rate award over a five year period effective November 1, 1991.
As a result, North Attleboro Gas phased-in an annual revenue
increase of $201,000 on November 1, 1993. Future increases
will phase-in each November 1 through the year 1995.
In November 1993, ProvGas received proceeds of $16
million related to an issuance of First Mortgage Bonds, Series
Q (5.62%). The net proceeds received from the issuance were
used to pay down short-term debt. In turn, the short-term
debt was used to call long-term debt bearing a high interest
rate. The previous issuances called were First Mortgage
Bonds, Series L (8.85%) and the Series II Senior Debentures
(8.50%). This issuance will generate savings to the
Registrant of approximately $300,000, net of tax.
In June 1993, the Registrant priced its public offering
of 850,000 share of common stock at $19 per common share. The
net proceeds of $15.3 million, along with an additional $1.1
million, totalling $16.4 million, was contributed as capital
to ProvGas. ProvGas used the equity for repayment of short-
term debt incurred to finance ProvGas' capital expenditures.
In November 1992, ProvGas issued $25 million of First
Mortgage Bonds. These First Mortgage Bonds, which consisted
of $12.5 million (8.09%) designated as Series O and $12.5
million (8.09%) designated as Series P, will mature in
September 2022. The net proceeds provided by this issuance
were used to paydown short-term debt.
The Registrant meets seasonal cash requirements and
finances its capital expenditures program on an interim basis
through short-term borrowings. For example, during the latest
quarter, the Registrant's accounts receivable and unbilled
revenues have increased $23.3 million. These fluctuations are
the result of higher monthly sales during the current winter
months and a moratorium on residential shut-offs during the
heating season. Because of these increases, which negatively
impact cash flow, the Registrant must borrow to maintain an
appropriate level of liquidity.
Capital expenditures for the latest quarter were $4.3
million as compared to $4.0 million last year. The increase
was the result of adding new and replacement mains, services
PAGE I-13
</PAGE>
and meters. Forecasted capital expenditures for the next
three years will total approximately $50-$60 million related
mostly to main, services and meters.
PAGE I-14
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PROVIDENCE ENERGY CORPORATION AND SUBSIDIARIES
PART II. OTHER INFORMATION
Item 6 (b). Reports on Form 8-K
No reports on Form 8-K were filed during the quarter for
which this report is filed.
PAGE II-1
</PAGE>
PROVIDENCE ENERGY CORPORATION AND SUBSIDIARIES
It is the opinion of management that the financial information
contained in this report reflects all adjustments necessary to a
fair statement of results for the period reported, but such
results are not necessarily indicative of results to be expected
for the year due to the seasonal nature of the Registrant's gas
operations. All accounting policies and practices have been
applied in a manner consistent with prior periods.
SIGNATURE
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.
Providence Energy Corporation
(Registrant)
BY:/s/ Gary S. Gillheeney
GARY S. GILLHEENEY
Vice President, Financial
and Information Services
and Treasurer
Dated: February 14, 1994
PAGE II - 2
</PAGE>
PROVIDENCE ENERGY CORPORATION AND SUBSIDIARIES
It is the opinion of management that the financial information
contained in this report reflects all adjustments necessary to a
fair statement of results for the period reported, but such
results are not necessarily indicative of results to be expected
for the year due to the seasonal nature of the Registrant's gas
operations. All accounting policies and practices have been
applied in a manner consistent with prior periods.
SIGNATURE
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.
Providence Energy Corporation
(Registrant)
BY:
GARY S. GILLHEENEY
Vice President, Financial
and Information Services
and Treasurer
Dated: February 14, 1994
PAGE II - 2
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