SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1994
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 1-3551
EQUITABLE RESOURCES, INC.
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 25-0464690
(State of incorporation or organization) (IRS Employer
Identification No.)
420 Boulevard of the Allies, Pittsburgh, Pennsylvania 15219
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (412) 261-3000
____________
NONE
(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
Indicate the number of shares outstanding of each of issuer's classes of
common stock, as of the close of the period covered by this report.
Outstanding at
Class September 30, 1994
Common stock, no par value 34,535,436 shares
<PAGE>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
Index
Page No.
Part I. Financial Statements:
Statements of Consolidated Income for the Three
Months Ended September 30, 1994 and 1993,
the Nine Months Ended September 30, 1994
and 1993 and the Twelve Months Ended
September 30, 1994 and 1993 1
Statements of Consolidated Cash Flows
for the Three Months Ended September 30, 1994
and 1993, the Nine Months Ended September 30,
1994 and 1993, and the Twelve Months Ended
September 30, 1994 and 1993 2
Consolidated Balance Sheets, September 30, 1994
and 1993 and December 31, 1993 3 - 4
Long-Term Debt, September 30, 1994 and 1993 5
Notes to Consolidated Financial Statements 6
Gas Produced, Purchased and Sold 7 - 12
Information by Business Segment 13
Management's Discussion and Analysis of
Financial Condition and Results of Operations 14 - 17
Part II. Other Information 18
Signature 19
<PAGE>
<TABLE>
<CAPTION>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
Statements of Consolidated Income
(Thousands Except Per Share Amounts)
Three Months Ended Nine Months Ended Twelve Months Ended
September 30, September 30, September 30,
1994 1993 1994 1993 1994 1993
<S> <C> <C> <C> <C> <C> <C>
Operating Revenues $297,712 $272,745 $1,053,372 $750,346 $1,397,820 $1,011,731
Cost of Gas Purchased 200,089 167,737 703,066 427,006 920,217 569,111
------- ------- --------- ------- --------- ---------
Net operating revenues 97,623 105,008 350,306 323,340 477,603 442,620
------- ------- --------- ------- --------- ---------
Operating Expenses:
Operation 46,983 45,001 143,115 125,190 192,345 169,604
Maintenance 8,327 7,599 23,174 20,608 31,590 27,571
Depreciation and
depletion 23,265 20,749 68,593 55,201 90,286 72,447
Taxes other than income 6,201 6,872 31,544 28,227 43,119 37,845
------- ------- --------- ------- --------- ---------
Total operating
expenses 84,776 80,221 266,426 229,226 357,340 307,467
------- ------- --------- ------- --------- ---------
Operating Income 12,847 24,787 83,880 94,114 120,263 135,153
Other Income 810 125 1,318 263 2,761 1,381
Interest Charges 11,387 10,811 32,316 28,508 42,536 37,448
------- ------- --------- ------- --------- ---------
Income Before
Income Taxes 2,270 14,101 52,882 65,869 80,488 99,086
Income Taxes (Benefits) (111) 5,489 8,085 17,631 10,474 27,714
------- ------- --------- ------- --------- ---------
Net Income $ 2,381 $ 8,612 $ 44,797 $ 48,238 $ 70,014 $ 71,372
======= ======= ========= ======= ========= ========
Average Common
Shares Outstanding 34,526 32,195 34,503 31,728 34,492 31,645
====== ====== ====== ====== ====== ======
Earnings Per Share of
Common Stock $.07 $.27 $1.30 $1.52 $2.03 $2.26
=== === ==== ==== ==== ====
Dividends Per Share of
Common Stock $.28 $.27 $.85 $.81 $1.14 $1.08
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
Statements of Consolidated Cash Flows
(Thousands)
Three Months Ended Nine Months Ended Twelve Months Ended
September 30, September 30, September 30,
1994 1993 1994 1993 1994 1993
<S> <C> <C> <C> <C> <C> <C>
Cash Flows from Operating Activities:
Net Income $ 2,381 $ 8,612 $ 44,797 $ 48,238 $70,014 $ 71,372
-------- -------- -------- ------- ------ ------
Adjustments to Reconcile Net Income
to Net Cash
Provided by Operating Activities:
Depreciation and 23,265 20,749 68,593 55,201 90,286 72,447
depletion
Deferred income taxes 5,826 11,014 1,902 7,102 (4,444) 7,530
(benefits)
Other - net (1,893) (1,994) 1,462 8 2,773 60
Changes in other assets
and liabilities:
Accounts receivable and
unbilled revenues 28,277 7,140 32,743 23,748 (13,357) (23,684)
Gas stored underground (7,666) 374 2,848 (15,464) 13,236 (6,909)
Material and supplies 1,324 (982) (1,244) 540 (2,493) 630
Deferred purchased (16,726) (24,147) (14,358) (17,837) (10,545) (16,564)
gas cost
Prepaid expenses and other(7,133) (17,126) (6,794) (12,779) 4,308 (7,483)
Regulatory assets (290) (7,089) (2,877) (9,583) (11,951) (12,453)
Accounts payable (23,997) (3,851) (30,793) 8,331 (20,377) 19,936
Accrued taxes (7,822) (3,160) (5,772) (1,936) (2,812) 1,657
Refunds due customers 3,139 4,048 7,103 1,685 7,955 5,622
Other - net 3,768 (2,800) 5,856 (6,512) 9,457 3,118
-------- -------- -------- ------- ------ ------
Total adjustments 72 (17,824) 58,669 32,504 62,036 43,907
-------- -------- -------- ------- ------ ------
Net cash provided
(used) by operating
activities 2,453 (9,212) 103,466 80,742 132,050 115,279
-------- -------- -------- ------- ------ ------
Cash Flows from Investing Activities:
Capital expenditures:
Energy resources (28,888) (48,376) (69,088) (273,421) (91,912) (291,232)
Utility services (11,182) (12,722) (31,488) (32,239) (42,415) (45,980)
Proceeds from sale of property 290 185 805 928 1,147 6,299
-------- -------- -------- ------- ------ ------
Net cash used in
investing activities (39,780) (60,913) (99,771) (304,732) (133,180) (330,913)
-------- -------- -------- ------- ------ ------
Cash Flows from Financing Activities:
Issuance of common stock 425 112,116 1,299 112,349 1,362 112,874
Purchase of treasury stock - - - (18) (10) (37)
Dividends paid (9,839) (8,490) (29,501) (25,457) (39,323) (33,927)
Proceeds from issuance of
long-term debt - - 43,185 31,775 43,112 31,720
Repayments and retirements
of long-term debt - - (1,971) (16,445) (1,971) (16,445)
Increase (decrease) in
short-term loans 50,100 (52,000) (15,900) 118,500 5,500 125,500
-------- -------- -------- ------- ------ ------
Net cash provided (used) by
financing activities 40,686 51,626 (2,888) 220,704 8,670 219,685
-------- -------- -------- ------- ------ ------
Increase (decrease) in cash and
cash equivalents 3,359 (18,499) 807 (3,286) 7,540 4,051
Cash and cash equivalents
at beginning of period 12,485 26,803 15,037 11,590 8,304 4,253
-------- -------- -------- ------- ------ ------
Cash and cash equivalents
at end of period $15,844 $ 8,304 $ 15,844 $ 8,304 $ 15,844 $ 8,304
====== ======== ======== ======= ====== ======
Cash paid during the period for:
Interest (net of amount
capitalized) $12,287 $ 12,409 $ 30,980 $ 27,808 $ 37,764 $ 32,807
====== ======== ====== ======== ======== ========
Income taxes $ 2,952 $ 8,206 $ 9,463 $ 22,795 $ 14,215 $ 26,411
====== ======== ====== ======== ======== ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Thousands)
September 30, December 31,
1994 1993 1993
<S> <C> <C> <C>
ASSETS
Property, Plant and Equipment
(Successful Efforts Method):
Energy resources $1,264,574 $1,185,796 $1,203,599
Less accumulated
depreciation and depletion 346,645 284,965 298,370
--------- --------- ---------
Net energy resources 917,929 900,831 905,229
--------- --------- ---------
Utility services 929,208 884,218 903,238
Less accumulated
depreciation and depletion 274,667 254,196 260,043
--------- --------- ---------
Net utility services 654,541 630,022 643,195
--------- --------- ---------
Net property, plant and equipment 1,572,470 1,530,853 1,548,424
--------- --------- ---------
Current Assets:
Cash and cash equivalents 15,844 8,304 15,037
Accounts receivable (less accumulated
provision for doubtful accounts:
September 30, 1994, $10,986; 1993, $8,978;
December 31, 1993, $10,106) 159,110 148,558 171,626
Unbilled revenues 6,746 5,949 27,853
Gas stored underground - current inventory 15,211 28,447 18,059
Material and supplies 13,505 11,012 12,261
Deferred purchased gas cost 31,506 20,961 17,148
Prepaid expenses and other 30,771 35,079 23,977
--------- --------- ---------
Total current assets 272,693 258,310 285,961
--------- --------- ---------
Other Assets:
Regulatory assets 89,901 77,950 87,024
Other 27,604 28,331 25,498
--------- --------- ---------
Total other assets 117,505 106,281 112,522
--------- --------- ---------
Total $1,962,668 $1,895,444 $1,946,907
========= ========= =========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Thousands)
September 30, December 31,
1994 1993 1993
<S> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stockholders' equity:
Common stock, no par value, authorized
80,000 shares; shares issued September 30,
1994, 35,153; September 30, 1993,
35,077; December 31, 1993, 35,087 $ 224,437 $ 222,683 $ 222,801
Retained earnings 535,729 505,038 520,433
Treasury stock, shares at cost September 30,
1994, 618; September 30, 1993, 621;
December 31, 1993, 622 (14,538) (14,613) (14,623)
Foreign currency translation (807) - (581)
---------- --------- ---------
Total common stockholders' equity 744,821 713,108 728,030
Long-term debt 408,117 378,717 378,845
---------- --------- ---------
Total capitalization 1,152,938 1,091,825 1,106,875
---------- --------- ---------
Current Liabilities:
Long-term debt payable within one year 14,500 1,971 1,971
Short-term loans 238,000 232,500 253,900
Accounts payable 113,015 133,392 143,808
Accrued taxes 9,586 12,398 15,358
Accrued interest 11,360 9,842 12,338
Refunds due customers 21,309 13,354 14,206
Deferred income taxes 6,245 6,276 (4,805)
Customer credit balances 5,797 7,500 7,578
Other 12,936 6,622 14,061
---------- --------- ---------
Total current liabilities 432,748 423,855 458,415
---------- --------- ---------
Deferred and Other Credits:
Deferred income taxes 329,159 331,112 336,678
Deferred investment tax credits 22,363 23,915 23,178
Other 25,460 24,737 21,761
---------- --------- ---------
Total deferred and other credits 376,982 379,764 381,617
---------- --------- ---------
Total $1,962,668 $1,895,444 $1,946,907
========= ========= =========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
Long-Term Debt
(Thousands)
Annual Maturities
Debt Maturities After One Year
September 30, September 30,
1994 1993 1994 1993
<S> <C> <C> <C> <C>
8 1/4% Debentures, due July 1, 1996 (a) $ $ $ 75,000 $ 75,000
7 1/2% Debentures, due July 1, 1999
($75,000 principal amount net of
unamortized original issue discount) (a) 70,266 69,501
9 1/2% Convertible subordinated
debentures, due January 15, 2006 2,351 2,716
9.9% Debentures, due April 15, 2013 (b) 75,000 75,000
Medium-Term Notes:
7.2% to 9.0% Series A,
due 1998 thru 2021 100,000 100,000
5.1% to 7.6% Series B,
due 1995 thru 2023 14,500 85,500 56,500
Other 1,971
------ ----- ------- -------
Total $14,500 $1,971 $408,117 $378,717
====== ===== ======= =======
<FN>
(a) Not redeemable prior to maturity.
(b) Annual sinking fund payments of $3,750,000 are required beginning in 1999.
</FN>
</TABLE>
<PAGE>
Equitable Resources, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
A. The accompanying financial statements should be read in conjunction with
the Company's 1993 Annual Report on Form 10-K.
B. In the opinion of the Company, the accompanying unaudited consolidated
financial statements contain all adjustments necessary to present fairly
the financial position as of September 30, 1994 and 1993 and the results
of operations for the three, nine and twelve months then ended and cash
flows for the three, nine and twelve months then ended. All of the
adjustments are of a normal recurring nature. Certain balance sheet
information contained in the prior period comparative information has been
reclassified to conform with the September 30, 1994 presentation.
C. The results of operations for the three- and nine-month periods ended
September 30, 1994 and 1993 are not indicative of results for a full year
because of the seasonal nature of the Company's operations.
D. At September 30, 1994, 2,891,000 shares of Common Stock were reserved as
follows: 213,000 shares for conversion of the 9 1/2% Convertible
Subordinated Debentures, 664,000 shares for issuance under the Key
Employee Restricted Stock Option and Stock Appreciation Rights Incentive
Compensation Plan, 1,725,000 shares for issuance under the Long-Term
Incentive Plan, 80,000 shares for issuance under the Non-Employee
Directors' Stock Incentive Plan, and 209,000 shares for issuance under the
Company's Dividend Reinvestment and Stock Purchase Plan.
E. The Company filed a shelf registration in March 1992 to issue $100 million
of Medium-Term Notes--Series B to be used primarily to retire short-term
loans incurred to temporarily finance a portion of 1991 acquisitions.
Through December 31, 1993, the Company issued $56.5 million of Medium-Term
Notes. The remaining $43.5 million of Medium-Term Notes were issued
during the first quarter of 1994. These notes have maturity dates ranging
from three to thirty years and a weighted average interest rate of 6.60%.
The Company filed a shelf registration effective June 9, 1994 to issue
$100 million of Medium-Term Notes--Series C to be used to retire short-
term loans. No Series C Notes have been issued.
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Three Months Ended September 30, 1994
Utility Energy
Services Resources Eliminations Consolidated
<S> <C> <C> <C> <C>
Gas Produced, Purchased and Sold (MMcf):
Produced 585 15,640 16,225
------- ------- ------- -------
Purchased:
Other producers 14,049 106,161 120,210
Inter-segment purchases 2,157 3,850 (6,007)
------- ------- ------- -------
Total purchases 16,206 110,011 (6,007) 120,210
------- ------- ------- -------
Total produced and purchased 16,791 125,651 (6,007) 136,435
Deduct:
Net increase in gas in storage 3,184 3,184
Extracted natural gas liquids
(equivalent gas volumes) 2,176 2,176
System use and unaccounted for 916 535 1,451
------- ------- ------- -------
Total 12,691 122,940 (6,007) 129,624
======= ======= ======= =======
Gas Sales (MMcf):
Residential 1,925 1,925
Commercial 1,246 1,246
Industrial 3,967 (3,039) 928
Utilities 3,400 3,400
Production 15,640 15,640
Marketing 2,153 107,300 (2,968) 106,485
------- ------- ------- -------
Total 12,691 122,940 (6,007) 129,624
======= ======= ======= =======
Natural Gas Transported (MMcf) 23,437 29,965 (12,793) 40,609
======= ======= ======= =======
Oil Produced and Sold (thousands of bls) 493 493
Natural Gas Liquids Sold
(thousands of gallons) 66,373 66,373
Average Selling Price
Gas - Utility Sales (per Mcf) $4.195
- Energy Resource Production $ 1.734
- Energy Resource Marketing $ 1.800
Oil (per barrel) $ 16.605
Natural Gas Liquids (per gallon) $ .268
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Three Months Ended September 30, 1993
Utility Energy
Services Resources Eliminations Consolidated
<S> <C> <C> <C> <C>
Gas Produced, Purchased and Sold (MMcf):
Produced 299 13,806 14,105
------- ------- ------- -------
Purchased:
Other producers 7,955 73,648 81,603
Inter-segment purchases 313 1,268 (1,581)
------- ------- ------- -------
Total purchases 8,268 74,916 (1,581) 81,603
------- ------- ------- -------
Total produced and purchased 8,567 88,722 (1,581) 95,708
Deduct:
Net increase in gas in storage 3,264 3,264
Extracted natural gas liquids
(equivalent gas volumes) 1,229 1,229
System use and unaccounted for 691 691
------- ------- ------- -------
Total 4,612 87,493 (1,581) 90,524
======= ======= ======= =======
Gas Sales (MMcf):
Residential 2,105 2,105
Commercial 433 433
Industrial 842 (39) 803
Utilities 3 3
Production 13,806 (6) 13,800
Marketing 1,255 73,687 (1,562) 73,380
------- ------- ------- -------
Total gas sales 4,638 87,493 (1,607) 90,524
Processed gas extracted (26) 26
------- ------- ------- -------
Total 4,612 87,493 (1,581) 90,524
======= ======= ======= =======
Natural Gas Transported (MMcf) 20,202 28,658 (9,036) 39,824
======= ======= ======= =======
Oil Produced and Sold (thousands of bls) 531 531
Natural Gas Liquids Sold
(thousands of gallons) 65,085 65,085
Average Selling Price
Gas - Utility Sales (per Mcf) $7.940
- Energy Resource Production $ 2.101
- Energy Resource Marketing $ 2.253
Oil (per barrel) $ 15.725
Natural Gas Liquids (per gallon) $ .292
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Nine Months Ended September 30, 1994
Utility Energy
Services Resources Eliminations Consolidated
<S> <C> <C> <C> <C>
Gas Produced, Purchased and Sold (MMcf):
Produced 1,522 45,074 46,596
------- ------- ------- -------
Purchased:
Other producers 38,992 284,073 323,065
Inter-segment purchases 9,270 5,434 (14,704)
------- ------- ------- -------
Total purchases 48,262 289,507 (14,704) 323,065
------- ------- ------- -------
Total produced and purchased 49,784 334,581 (14,704) 369,661
Deduct:
Net increase in gas in storage 45 45
Extracted natural gas liquids
(equivalent gas volumes) 5,874 5,874
System use and unaccounted for 2,371 1,534 3,905
------- ------- ------- -------
Total 47,368 327,173 (14,704) 359,837
======= ======= ======= =======
Gas Sales (MMcf):
Residential 21,692 21,692
Commercial 8,162 8,162
Industrial 5,835 (3,039) 2,796
Utilities 4,626 4,626
Production 45,074 (409) 44,665
Marketing 7,053 282,099 (11,256) 277,896
------- ------- ------- -------
Total 47,368 327,173 (14,704) 359,837
======= ======= ======= =======
Natural Gas Transported (MMcf) 50,317 77,944 (27,143) 101,118
======= ======= ======= =======
Oil Produced and Sold (thousands of bls) 1,480 1,480
Natural Gas Liquids Sold
(thousands of gallons) 182,647 182,647
Average Selling Price
Gas - Utility Sales (per Mcf) $6.725
- Energy Resource Production $ 2.103
- Energy Resource Marketing $ 2.064
Oil (per barrel) $ 14.380
Natural Gas Liquids (per gallon) $ .260
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Nine Months Ended September 30, 1993
Utility Energy
Services Resources Eliminations Consolidated
<S> <C> <C> <C> <C>
Gas Produced, Purchased and Sold (MMcf):
Produced 1,264 38,732 39,996
------- ------- ------- -------
Purchased:
Other producers 37,058 149,063 186,121
Inter-segment purchases 5,847 2,546 (8,393)
------- ------- ------- -------
Total purchases 42,905 151,609 (8,393) 186,121
------- ------- ------- -------
Total produced and purchased 44,169 190,341 (8,393) 226,117
Deduct:
Net increase in gas in storage 6,535 6,535
Extracted natural gas liquids
(equivalent gas volumes) 2,213 2,213
System use and unaccounted for 6,454 294 6,748
------- ------- ------- -------
Total 31,180 187,834 (8,393) 210,621
======= ======= ======= =======
Gas Sales (MMcf):
Residential 20,516 20,516
Commercial 5,411 5,411
Industrial 3,020 (333) 2,687
Utilities 20 20
Production 38,732 (3,719) 35,013
Marketing 1,255 149,102 (3,383) 146,974
------- ------- ------- -------
Total gas sales 30,222 187,834 (7,435) 210,621
Processed gas extracted 958 (958)
------- ------- ------- -------
Total 31,180 187,834 (8,393) 210,621
======= ======= ======= =======
Natural Gas Transported (MMcf) 48,617 28,658 (26,008) 51,267
======= ======= ======= =======
Oil Produced and Sold (thousands of bls) 1,598 1,598
Natural Gas Liquids Sold
(thousands of gallons) 95,229 95,229
Average Selling Price
Gas - Utility Sales (per Mcf) $7.425
- Energy Resource Production $ 2.261
- Energy Resource Marketing $ 2.309
Oil (per barrel) $16.788
Natural Gas Liquids (per gallon) $ .307
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Twelve Months Ended September 30, 1994
Utility Energy
Services Resources Eliminations Consolidated
<S> <C> <C> <C> <C>
Gas Produced, Purchased and Sold (MMcf):
Produced 2,230 59,892 62,122
------- ------- ------- -------
Purchased:
Other producers 53,804 352,995 406,799
Inter-segment purchases 10,891 6,233 (17,124)
------- ------- ------- -------
Total purchases 64,695 359,228 (17,124) 406,799
------- ------- ------- -------
Total produced and purchased 66,925 419,120 (17,124) 468,921
Deduct:
Net decrease in gas in storage (286) (286)
Extracted natural gas liquids
(equivalent gas volumes) 6,666 6,666
System use and unaccounted for 4,176 1,534 5,710
------- ------- ------- -------
Total 63,035 410,920 (17,124) 456,831
======= ======= ======= =======
Gas Sales (MMcf):
Residential 31,156 31,156
Commercial 10,986 10,986
Industrial 6,405 (3,046) 3,359
Utilities 4,638 4,638
Production 59,892 (409) 59,483
Marketing 9,850 351,028 (13,669) 347,209
------- ------- ------- -------
Total 63,035 410,920 (17,124) 456,831
======= ======= ======= =======
Natural Gas Transported (MMcf) 67,972 99,945 (35,763) 132,154
======= ======= ======= =======
Oil Produced and Sold (thousands of bls) 1,994 1,994
Natural Gas Liquids Sold
(thousands of gallons) 249,609 249,609
Average Selling Price
Gas - Utility Sales (per Mcf) $7.056
- Energy Resource Production $ 2.147
- Energy Resource Marketing $ 2.119
Oil (per barrel) $ 14.359
Natural Gas Liquids (per gallon) $ .262
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Twelve Months Ended September 30, 1993
Utility Energy
Services Resources Eliminations Consolidated
<S> <C> <C> <C> <C>
Gas Produced, Purchased and Sold (MMcf):
Produced 1,910 51,552 53,462
------- ------- ------- -------
Purchased:
Pipeline suppliers 681 681
Other producers 48,135 185,067 233,202
Inter-segment purchases 7,526 3,249 (10,775)
------- ------- ------- -------
Total purchases 56,342 188,316 (10,775) 233,883
Total produced and purchased 58,252 239,868 (10,775) 287,345
Deduct:
Net increase in gas in storage 1,444 1,444
Extracted natural gas liquids
(equivalent gas volumes) 2,762 2,762
System use and unaccounted for 10,711 448 11,159
------- ------- ------- -------
Total 46,097 236,658 (10,775) 271,980
====== ======= ======= =======
Gas Sales (MMcf):
Residential 29,856 29,856
Commercial 7,729 7,729
Industrial 5,713 (487) 5,226
Utilities 37 37
Production 51,552 (4,264) 47,288
Marketing 1,255 185,106 (4,517) 181,844
------- ------- ------- -------
Total gas sales 44,590 236,658 (9,268) 271,980
Processed gas extracted 1,507 (1,507)
------- ------- ------- -------
Total 46,097 236,658 (10,775) 271,980
======= ======= ======= =======
Natural Gas Transported (MMcf) 66,583 28,658 (35,670) 59,571
======= ======= ======= ========
Oil Produced and Sold (thousands of bls) 2,178 2,178
Natural Gas Liquids Sold
(thousands of gallons) 110,924 110,924
Average Selling Price
Gas - Utility Sales (per Mcf) $7.222
- Energy Resource Production $ 2.317
- Energy Resource Marketing $ 2.371
Oil (per barrel) $17.130
Natural Gas Liquids (per gallon) $ .318
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
Information by Business Segment
(Thousands)
Three Months Ended Nine Months Ended Twelve Months Ended
September 30, September 30, September 30,
1994 1993 1994 1993 1994 1993
<S> <C> <C> <C> <C> <C> <C>
Operating Revenues:
Energy resources $262,822 $239,900 $ 775,895 $514,421 $1,004,538 $ 666,211
Utility services 58,469 45,750 327,275 272,437 452,135 392,640
Sales between
Segments (23,579) (12,905) (49,798) (36,512) (58,853) (47,120)
------- ------- --------- ------- --------- ---------
Total $297,712 $272,745 $1,053,372 $750,346 $1,397,820 $1,011,731
======= ======= ========= ======= ========= =========
Operating Income:
Energy resources $ 11,889 $ 22,681 $ 29,149 $ 45,487 $ 37,815 $ 57,839
Utility services 958 2,106 54,731 48,627 82,448 77,314
------- ------- -------- ------- --------- ---------
Total $ 12,847 $ 24,787 $ 83,880 $ 94,114 $ 120,263 $ 135,153
======= ======= ======== ======= ========= =========
Net Income (Loss):
Energy resources $ 6,993 $ 9,650 $ 19,928 $ 27,041 $ 30,887 $ 37,319
Utility services (4,612) (1,038) 24,869 21,197 39,127 34,053
------- ------- -------- ------- -------- ---------
Total $ 2,381 $ 8,612 $ 44,797 $ 48,238 $ 70,014 $ 71,372
======= ======= ======== ======= ========= =========
</TABLE>
<PAGE>
Management's Discussion and Analysis of Financial Condition and Results of
Operations
OVERVIEW
Consolidated net income for the quarter ended September 30, 1994 was $2.4
million, or $.07 per share, compared with $8.6 million, or $.27 per share, for
1993. The decrease in income is due primarily to lower selling prices for
produced natural gas, lower margins from gas processing and intrastate
transportation and the effect of income generated in the 1993 period as a
result of the transition to the Federal Energy Regulatory
Commission (FERC) Order 636 restructuring.
Consolidated net income for the nine months ended September 30, 1994 was
$44.8 million, or $1.30 per share, compared with $48.2 million, or $1.52 per
share for 1993. Net income for the twelve months ended September 30, 1994 was
$70.0 million, or $2.03 per share, compared with $71.4 million, or $2.26 per
share, for 1993. The decrease in income for the nine- and twelve-month
periods is due primarily to lower selling prices for produced natural gas and
oil and lower margins from gas processing and intrastate transportation, which
were partially offset by increased natural gas production and increased
margins from utility service operations.
RESULTS OF OPERATIONS
ENERGY RESOURCES
Operating revenues were $262.8 million for the quarter ended September
30, 1994 compared with $239.9 million for 1993. The increase in revenues is
due primarily to an increase in gas marketing activity. Operating revenues
were $775.9 million for the nine months ended September 30, 1994 compared with
$514.4 million for 1993, and $1.0 billion for the twelve months ended
September 30, 1994 compared with $666.2 million for 1993. The increase in
revenues for the nine- and twelve-month periods is due primarily to increases
in gas marketing activity and production of natural gas liquids which reflect
the June 1993 acquisition of Louisiana Intrastate Gas Company (LIG). Also, an
increase in natural gas production of approximately 16 percent for the nine-
and twelve-month periods more than offset the impact of lower wellhead prices.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended Twelve Months Ended
September 30, September 30, September 30,
1994 1993 1994 1993 1994 1993
<S> <C> <C> <C> <C> <C> <C>
ENERGY RESOURCES
Operating Revenues (thousands):
Natural Gas:
Production $ 27,119 $ 28,999 $ 94,791 $ 87,555 $ 128,596 $119,460
Marketing 193,113 166,023 582,383 344,239 743,973 438,927
Oil 8,186 8,357 21,277 26,833 28,620 37,309
Natural Gas Liquids 17,813 18,999 47,495 29,230 65,386 35,270
Direct Billing
Settlements 7,815 7,815 7,815 7,815 7,815 7,815
Other 8,776 9,707 22,134 18,749 30,148 27,430
------- ------- ------- ------- --------- -------
Total Revenues $262,822 $239,900 $775,895 $514,421 $1,004,538 $666,211
======= ======= ======= ======= ========= =======
Sales Quantities:
Natural Gas (MMcf):
Production 15,640 13,806 45,074 38,732 59,892 51,552
Marketing 107,300 73,687 282,099 149,102 351,028 185,106
Oil (MBls) 493 531 1,480 1,598 1,994 2,178
Natural Gas Liquids
(thousands of
gallons) 66,373 65,085 182,647 95,229 249,609 110,924
</TABLE>
<PAGE>
Management's Discussion and Analysis of Financial Condition and Results of
Operations (Continued)
Cost of gas purchased amounted to $204.0 million for the quarter ended
September 30, 1994 compared with $177.7 million for 1993, $611.3 million for
the nine months ended September 30, 1994 compared with $360.4 million for 1993
and $784.6 million for the twelve months ended September 30, 1994 compared
with $457.8 million for 1993. The increased cost for the current periods
reflects the increase in volume of marketed natural gas and increased
requirements due to the higher production level of natural gas liquids.
Other operating expenses were $47.0 million for the quarter ended September
30, 1994 compared with $39.5 million for 1993. The increase in other
operating expenses is due to increased production expenses, depreciation and
depletion related to the higher level of natural gas production. Other
operating expenses were $135.5 million for the nine months ended September 30,
1994 compared with $108.5 million for 1993 and $182.2 million for the twelve
months ended September 30, 1994 compared with $150.6 million for 1993.
Increases for the nine- and twelve-month periods are attributed to the
acquisition of LIG, as well as the higher level of natural gas production.
Operating income was $11.8 million for the quarter ended September 30, 1994
compared with $22.7 million for 1993, $29.1 million for the nine months ended
September 30, 1994 compared with $45.5 million for 1993 and $37.8 million for
the twelve months ended September 30, 1994 compared with $57.8 million for
1993. The decreases for the current periods are due primarily to lower
selling prices for produced natural gas and lower margins from gas processing
and intrastate transportation, a portion of which was offset by increased
production of natural gas. The nine- and twelve-month periods were also
adversely impacted by oil prices that were 14% and 16%, respectively, below
1993 levels.
UTILITY SERVICES
Operating revenues, which are derived principally from the sale and
transportation of natural gas, were $58.5 million for the quarter ended
September 30, 1994 compared with $45.7 million for 1993. The increase in
revenues is the result of increased off-system gas sales, gas sales to
commercial and industrial customers previously using transportation service
and increased retail rates to pass-through higher gas costs to customers.
Operating revenues were $327.3 million for the nine months ended September 30,
1994 compared with $272.4 million for 1993 and $452.1 million for the twelve
months ended September 30, 1994 compared with $392.6 million for 1993. The
increase in revenues for the nine- and twelve-month periods is the result of
increased retail gas sales to commercial and industrial customers previously
using transportation service, colder weather, increased retail rates to pass-
through higher gas costs and increased off-system sales. The implementation
of FERC Order 636 has resulted in a shift from pipeline gas sales to marketed
gas sales.
<PAGE>
Management's Discussion and Analysis of Financial Conditions
and Results of Operations (Continued)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended Twelve Months Ended
September 30, September 30, September 30,
1994 1993 1994 1993 1994 1993
<S> <C> <C> <C> <C> <C> <C>
UTILITY SERVICES
Operating Revenues (thousands):
Retail Gas Sales $44,210 $25,785 $271,029 $210,175 $375,166 $300,136
Pipeline Gas Sales (6) 1,063 71 12,196 132 24,194
Transportation
Service 5,629 11,060 25,966 34,691 36,035 49,293
Storage Service 2,542 2,132 7,081 4,985 9,023 6,348
Marketed Gas Sales 4,265 3,668 17,129 3,668 23,661 3,668
Other 1,829 2,042 5,999 6,722 8,118 9,001
------ ------ ------- ------- ------- -------
Total Revenues $58,469 $45,750 $327,275 $272,437 $452,135 $392,640
====== ====== ======= ======= ======= =======
Sales Quantities (MMcf):
Retail Gas Sales 10,537 2,881 40,293 27,130 53,144 38,990
Pipeline Gas Sales 1 476 22 2,795 41 5,852
Transportation 23,437 20,202 50,317 48,617 67,972 66,583
Marketed Gas 2,153 1,255 7,053 1,255 9,850 1,255
Heating Degree Days
- Actual 90 118 3,916 3,539 6,005 5,609
- Normal 120 120 3,848 3,848 5,968 5,968
</TABLE>
Cost of gas purchased amounted to $19.1 million for the quarter ended
September 30, 1994 compared with $2.3 million for 1993, $139.7 million for
the nine months ended September 30, 1994, compared with $101.2 million for
1993 and $192.1 million for the twelve months ended September 30, 1994
compared with $155.9 million for 1993. The increase in the cost of gas
purchased for the current periods is the result of the increase in sales
volumes and the pass-through of higher costs in rates to retail customers.
Other operating expenses amounted to $38.4 million for the quarter ended
September 30, 1994 compared with $41.3 million for 1993. The decrease is
attributed to higher provisions for estimated interstate rate refunds
recorded in the 1993 period. Other operating expenses were $132.8 million
for the nine months ended September 30, 1994 compared with $122.6 million for
1993 and $177.5 million for the twelve months ended September 30, 1994
compared with $159.4 million for 1993. The increases for the nine- and
twelve-months periods reflect increased provisions for estimated interstate
rate refunds, higher taxes other than income related to increased sales, and
increased uncollectible account expense.
Operating income was $1.0 million for the quarter ended September 30,
1994 compared with $2.1 million for 1993. Operating income decreased due to
the effect of income generated in the 1993 period as a result of FERC Order
636 restructuring. Operating income was $54.7 million for the nine months
ended September 30, 1994 compared with $48.6 million 1993 and $82.5 million
for the twelve months ended September 30, 1994 compared with $77.3 million
for 1993. The increase in operating income for the nine- and twelve-month
periods is due to increased retail gas sales reflecting colder weather and
higher margins from pipeline operations.
<PAGE>
Management's Discussion and Analysis of Financial Condition and Results of
Operations (Continued)
CAPITAL RESOURCES AND LIQUIDITY
Operating Activities
Cash required for operations is impacted primarily by the seasonal
nature of the Company's utility operations. Gas purchased for storage during
the nonheating season is financed with short-term loans which are repaid as
gas is withdrawn from storage and sold during the heating season. Short-term
loans are also used to provide other working capital requirements during the
nonheating season.
Investing Activities
The Company's business requires major ongoing expenditures for
replacements, improvements and additions to utility plant and continuing
development and expansion of its energy resources. A total of $151.2 million
has been authorized for the 1994 capital expenditure program, of which 60
percent is allocated to Energy Resources. Capital expenditures for the nine
months ended September 30, 1994 were $100.6 million.
Short-term loans are used as interim financing for a portion of capital
expenditures. The Company expects to finance its 1994 capital expenditures
with cash generated from operations and temporarily with short-term loans.
Financing Activities
The Company believes it has adequate borrowing capacity to meet its
financing requirements. Bank loans and commercial paper, supported by
available credit, are used to meet short-term financing requirements. At
September 30, 1994, $197.0 million of commercial paper and $41.0 million of
bank loans were outstanding at an average interest rate of 4.91 percent.
Lines of credit currently available to the Company total $325 million which
require commitment fees averaging one-tenth of one percent. Adequate lines
of credit are expected to continue to be available in the future.
The Company filed a shelf registration effective June 9, 1994 to issue
$100 million of Medium-Term Notes -- Series C to be used to retire short-term
loans. No Series C Notes have been issued.
Balance Sheet Changes
The changes in deferred purchased gas cost are due to the timing of
pass-through of gas costs to rate payers. Changes in deferred purchased gas
cost do not affect results of operations due to regulatory procedures for
recovery of purchased gas cost in rates. The increase in regulatory assets
since September 30, 1993 is due primarily to accounting for income taxes and
postretirement benefits other than pension applicable to rate regulated
operations. The decrease in gas stored underground is the result of FERC Order
636 restructuring.
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
None
(b) Reports on Form 8-K during the quarter ended September 30,
1994:
None.
<PAGE>
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.
EQUITABLE RESOURCES, INC.
(Registrant)
s/ Joseph L. Giebel
------------------------------
Joseph L. Giebel
Vice President - Accounting
and Administration
Chief Accounting Officer
Date: November 10, 1994
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S FORM 10-Q DATED 9/30/94 AND FORM 10-K DATED 12/31/93 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000033213
<NAME> EQUITABLE RESOURCES, INC.
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 9-MOS YEAR
<FISCAL-YEAR-END> DEC-31-1994 DEC-31-1993
<PERIOD-END> SEP-30-1994 DEC-31-1993
<CASH> 15,844 15,037
<SECURITIES> 0 0
<RECEIVABLES> 165,856 199,479
<ALLOWANCES> 10,986 10,106
<INVENTORY> 28,716 30,320
<CURRENT-ASSETS> 272,693 285,961
<PP&E> 2,193,782 2,106,837
<DEPRECIATION> 621,312 558,413
<TOTAL-ASSETS> 1,962,668 1,946,907
<CURRENT-LIABILITIES> 432,748 458,415
<BONDS> 408,117 378,845
<COMMON> 209,899 208,178
0 0
0 0
<OTHER-SE> 534,922 519,852
<TOTAL-LIABILITY-AND-EQUITY> 1,962,668 1,946,907
<SALES> 1,053,372 1,094,794
<TOTAL-REVENUES> 1,053,372 1,094,794
<CGS> 0 0
<TOTAL-COSTS> 969,492 964,297
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 7,220 9,352
<INTEREST-EXPENSE> 32,316 38,728
<INCOME-PRETAX> 52,882 93,475
<INCOME-TAX> 8,085 20,020
<INCOME-CONTINUING> 44,797 73,455
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 44,797 73,455
<EPS-PRIMARY> 1.30 2.27
<EPS-DILUTED> 1.30 2.27
</TABLE>
