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, 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 March 31, 1994
Common stock, no par value 34,494,728 shares
<PAGE>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
Index
Page No.
Part I. Financial Statements:
Statements of Consolidated Income for the Three
Months Ended March 31, 1994 and 1993 and the
Twelve Months Ended March 31, 1994 and 1993 1
Statements of Consolidated Cash Flows
for the Three Months Ended March 31, 1994 and
1993 and the Twelve Months Ended March 31,
1994 and 1993 2
Consolidated Balance Sheets, March 31, 1994
and 1993 and December 31, 1993 3 - 4
Long-Term Debt, March 31, 1994 and 1993 5
Notes to Consolidated Financial Statements 6
Gas Produced, Purchased and Sold 7 - 10
Information by Business Segment 11
Management's Discussion and Analysis of
Financial Condition and Results of Operations 12 - 15
Part II. Other Information 16
Signature 17
<PAGE>
<TABLE>
<CAPTION>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
Statements of Consolidated Income
(Thousands Except Per Share Amounts)
Three Months Ended Twelve Months Ended
March 31, March 31,
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Operating Revenues $439,538 $269,819 $1,264,513 $836,985
Cost of Gas Purchased 281,646 137,366 788,437 425,638
------- ------- --------- -------
Net operating revenues 157,892 132,453 476,076 411,347
------- ------- --------- -------
Operating Expenses:
Operation 50,888 40,157 185,151 161,698
Maintenance 7,128 6,025 30,127 26,300
Depreciation and depletion 22,894 17,649 82,139 66,487
Taxes other than income 16,003 13,273 42,532 37,438
------- ------- --------- -------
Total operating expenses 96,913 77,104 339,949 291,923
------- ------- --------- -------
Operating Income 60,979 55,349 136,127 119,424
Other Income 332 283 1,755 1,635
Interest Charges 9,998 9,064 39,662 35,092
------- ------- --------- -------
Income Before Income Taxes 51,313 46,568 98,220 85,967
Income Taxes 14,954 15,773 19,201 21,251
------- ------- --------- -------
Net Income $ 36,359 $ 30,795 $ 79,019 $ 64,716
======= ======= ========== ======
Average Common Shares Outstanding 34,479 31,409 33,070 31,365
====== ====== ====== ======
Earnings Per Share of
Common Stock $1.05 $.98 $2.39 $2.06
==== === ==== ====
Dividends Per Share of
Common Stock $ .57 $.54 $1.13 $1.07
===== === ==== ====
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
Statements of Consolidated Cash Flows
(Thousands)
Three Months Ended Twelve Months Ended
March 31, March 31,
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Cash Flows from Operating Activities:
Net Income $ 36,359 $ 30,795 $ 79,019 $ 64,716
------- ------- ------- -------
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation and depletion. 22,894 17,649 82,139 66,487
Deferred income taxes 824 (1,691) 3,271 373
Other - net 3,080 2,270 2,129 591
Changes in other assets and liabilities:
Accounts receivable and unbilled revenues (62,813) (11,493) (73,672) (17,364)
Gas stored underground 16,648 6,084 5,488 (13,866)
Material and supplies (238) 1,589 (2,536) 1,068
Deferred purchased gas cost 7,931 11,594 (17,687) (2,722)
Prepaid expenses and other (4,223) (1,162) (4,738) 1,916
Regulatory assets (1,254) (707) (19,204) (3,577)
Accounts payable 21,219 (3,190) 43,156 28,983
Accrued taxes 17,203 15,788 2,439 4,274
Refunds due customers 1,909 (437) 4,883 3,431
Customer credit balances (7,560) (6,963) (919) (374)
Other - net 2,515 (6,033) 5,959 7,897
------- -------- --------- --------
Total adjustments 18,135 23,298 30,708 77,117
------- -------- -------- --------
Net cash provided by
operating activities 54,494 54,093 109,727 141,833
------- -------- ------- -------
Cash Flows from Investing Activities:
Capital expenditures:
Energy resources (14,889) (18,385) (292,749) (59,078)
Utility services (9,647) (8,205) (44,608) (45,684)
Proceeds from sale of property 231 424 1,077 7,158
------- ------- -------- -------
Net cash used in investing activities (24,305) (26,166) (336,280) (97,604)
------- ------- -------- -------
Cash Flows from Financing Activities:
Issuance of common stock 479 190 112,701 1,487
Purchase of treasury stock - (18) (10) (191)
Dividends paid (9,827) (8,481) (36,625) (33,038)
Proceeds from issuance of long-term debt 43,185 31,775 43,112 56,134
Repayments and retirements of long-term debt (1,971) (16,445) (1,971) (25,545)
Increase (decrease) in short-term loans (68,700) (43,500) 114,700 (41,500)
------- ------- ------- --------
Net cash provided (used) by
financing activities (36,834) (36,479) 231,907 (42,653)
------- ------- ------- --------
Increase (decrease) in cash and cash equivalents (6,645) (8,552) 5,354 1,576
Cash and cash equivalents at beginning of period 15,037 11,590 3,038 1,462
------- ------- -------- ---------
Cash and cash equivalents at end of period $ 8,392 $ 3,038 $ 8,392 $ 3,038
======== ======= ======== ========
Cash paid during the period for:
Interest (net of amount capitalized) $ 11,786 $ 10,682 $ 35,696 $ 32,370
Income taxes $ (2,281) $ 1,214 $ 24,052 $ 17,646
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Thousands)
March 31, December 31,
ASSETS 1994 1993 1993
<S> <C> <C> <C>
Property, Plant and Equipment
(Successful Efforts Method):
Energy resources $1,216,567 $ 832,079 $1,203,599
Less accumulated depreciation
and depletion 315,822 261,092 298,370
--------- --------- ---------
Net energy resources 900,745 570,987 905,229
--------- --------- ---------
Utility services 910,736 858,696 903,238
Less accumulated depreciation
and depletion 264,812 246,543 260,043
--------- --------- ---------
Net utility services 645,924 612,153 643,195
--------- --------- ---------
Net property, plant and equipment 1,546,669 1,183,140
--------- --------- ---------
Current Assets:
Cash and cash equivalents 8,392 3,038 15,037
Accounts receivable (less accumulated
provision for doubtful accounts:
March 31, 1994, $12,995; 1993, $11,598;
December 31, 1993, $10,106) 240,383 136,746 171,626
Unbilled revenues 19,020 13,857 27,853
Gas stored underground - current inventory 1,411 6,899 18,059
Material and supplies 12,499 8,722 12,261
Deferred purchased gas cost 9,217 (8,470) 17,148
Prepaid expenses and other 28,200 22,866 23,977
--------- --------- ----------
Total current assets 319,122 183,658 285,961
--------- --------- ----------
Other Assets:
Regulatory assets 88,278 69,074 87,024
Other 26,940 25,960 25,498
--------- --------- ----------
Total other assets 115,218 95,034 112,522
--------- --------- ---------
Total $1,981,009 $1,461,832 $1,946,907
========= ========= =========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Thousands)
March 31, December 31,
CAPITALIZATION AND LIABILITIES 1994 1993 1993
<S> <C> <C> <C>
Capitalization:
Common stockholders' equity:
Common stock, no par value, authorized
80,000 shares; shares issued March 31,
1994, 35,113; March 31, 1993, 32,048;
December 31, 1993, 35,087 $ 223,443 $ 110,431 $ 222,801
Retained earnings 537,137 496,086 520,433
Treasury stock, shares at cost March 31,
1994, 618; March 31, 1993, 621;
December 31, 1993, 622 (14,538) (14,613) (14,623)
Foreign Currency Translation (1,290) - (581)
--------- --------- ---------
Total common stockholders' equity 744,752 591,904 728,030
Long-term debt 422,401 378,520 378,845
--------- --------- ---------
Total capitalization 1,167,153 970,424 1,106,875
--------- - -------- ---------
Current Liabilities:
Long-term debt payable within one year - - 1,971
Short-term loans 185,200 70,500 253,900
Accounts payable 165,027 88,937 143,808
Accrued taxes 32,561 27,914 15,358
Accrued interest 9,832 8,716 12,338
Refunds due customers 16,115 11,232 14,206
Deferred income taxes 3,012 13,368 733
Dividends payable 9,828 8,485 -
Customer credit balances 18 937 7,578
Other 14,071 4,855 14,061
--------- --------- ---------
Total current liabilities 435,664 234,944 463,953
--------- --------- ---------
Deferred and Other Credits:
Deferred income taxes 331,129 221,869 331,140
Deferred investment tax credits 22,907 24,339 23,178
Other 24,156 10,256 21,761
--------- --------- ---------
Total deferred and other credits 378,192 256,464 376,079
--------- --------- ---------
Total $1,981,009 $1,461,832 $1,946,907
========= ========= =========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
Long-Term Debt
(Thousands)
Annual Maturities
Debt Maturities After One Year
March 31, March 31,
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) 69,875 69,143
9 1/2% Convertible subordinated
debentures, due January 15, 2006 2,526 2,877
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
100,000 56,500
------ ----- ------- -------
Total $ 0 $ 0 $422,401 $378,520
====== ===== ======= =======
<F/N>
(a) Not redeemable prior to maturity.
(b) Annual sinking fund payments of $3,750,000 are required beginning in
1999.
</F/N>
</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
March 31, 1994 and 1993 and the results of operations for the
three and twelve months then ended and cash flows for the
three and twelve months then ended. All of the adjustments
are of a normal recurring nature.
C. The results of operations for the three-month periods ended
March 31, 1994 and 1993 are not indicative of results for a
full year because of the seasonal nature of the Company's
operations.
D. At March 31, 1994, 1,127,000 shares of Common Stock were
reserved as follows: 229,000 shares for conversion of the 9
1/2% Convertible Subordinated Debentures, 666,000 shares for
issuance under the Key Employee Restricted Stock Option and
Stock Appreciation Rights Incentive Compensation Plan and
232,000 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%.
<PAGE>
<TABLE>
<CAPTION>
Three Months Ended March 31, 1994
Utility Energy
Services Resources Eliminations Consolidated
<S> <C> <C> <C> <C>
Gas Produced, Purchased and Sold (MMcf):
Produced 423 15,283 15,706
Purchased:
Other producers 15,283 80,634 95,917
Inter-segment purchases 4,762 966 (5,728)
Total purchases 20,045 81,600 (5,728) 95,917
Total produced and purchased 20,468 96,883 (5,728) 111,623
Net decrease in gas in storage (5,961) (5,961)
Extracted natural gas liquids
(equivalent gas volumes) 1,493 1,493
System use and unaccounted for 1,408 466 1,874
Total 25,021 94,924 (5,728) 114,217
Gas Sales (MMcf):
Residential 15,457 15,457
Commercial 5,183 5,183
Industrial 1,223 1,223
Utilities 177 177
Production 15,283 (307) 14,976
Marketing 2,981 79,641 (5,421) 77,201
Total gas sales 25,021 94,924 (5,728) 114,217
Processed gas extracted
Total 25,021 94,924 (5,728) 114,217
Natural Gas Transported (MMcf) 11,092 21,731 (7,428) 25,395
Oil Produced and Sold (thousands of bls) 510 510
Natural Gas Liquids Sold
(thousands of gallons) 51,896 51,896
Average Selling Price
Gas - Utility Sales (per Mcf) $7.746
- Energy Resource Production $2.576
- Energy Resource Marketing $2.444
Oil (per barrel) $12.171
Natural Gas Liquids (per gallon) $.251
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Three Months Ended March 31, 1993
Utility Energy
Services Resources Eliminations Consolidated
<S> <C> <C> <C> <C>
Gas Produced, Purchased and Sold (MMcf):
Produced 647 13,095 13,742
Purchased:
Other producers 15,761 34,911 50,672
Inter-segment purchases 3,765 657 (4,422)
Total purchases 19,526 35,568 (4,422) 50,672
Total produced and purchased 20,173 48,663 (4,422) 64,414
Deduct:
Net decrease in gas in storage (4,183) (4,183)
Extracted natural gas liquids
(equivalent gas volumes) 506 506
System use and unaccounted for 4,715 151 4,866
Total 19,641 48,006 (4,422) 63,225
Gas Sales (MMcf):
Residential 14,027 14,027
Commercial 3,734 3,734
Industrial 1,363 (151) 1,212
Utilities 11 11
Production 13,095 (2,933) 10,162
Marketing 34,911 (832) 34,079
Total gas sales 19,135 48,006 (3,916) 63,225
Processed gas extracted 506 (506)
Total 19,641 48,006 (4,422) 63,225
Natural Gas Transported (MMcf) 10,329 (8,047) 2,282
Oil Produced and Sold (thousands of bls) 549 549
Natural Gas Liquids Sold
(thousands of gallons) 15,748 15,748
Average Selling Price
Gas - Utility Sales (per Mcf) $7.254
- Energy Resource Production $2.276
- Energy Resource Marketing $2.154
Oil (per barrel) $17.040
Natural Gas Liquids (per gallon) $.342
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Twelve Months Ended March 31, 1994
Utility Energy
Services Resources Eliminations Consolidated
<S> <C> <C> <C> <C>
Gas Produced, Purchased and Sold (MMcf):
Produced 1,748 55,738 57,486
Purchased:
Other producers 51,392 263,708 315,100
Inter-segment purchases 8,465 3,654 (12,119)
Total purchases 59,857 267,362 (12,119) 315,100
Total produced and purchased 61,605 323,100 (12,119) 372,586
Deduct:
Net increase in gas in storage 4,426 4,426
Extracted natural gas liquids
(equivalent gas volumes) 3,992 3,992
System use and unaccounted for 4,952 609 5,561
Total 52,227 318,499 (12,119) 358,607
Gas Sales (MMcf):
Residential 31,410 31,410
Commercial 9,684 9,684
Industrial 3,450 (189) 3,261
Utilities 198 198
Production 55,738 (1,093) 54,645
Marketing 7,033 262,761 (10,385) 259,409
Total gas sales 51,775 318,499 (11,667) 358,607
Processed gas extracted 452 (452)
Total 52,227 318,499 (12,119) 358,607
Natural Gas Transported (MMcf) 67,035 72,390 (34,009) 105,416
Oil Produced and Sold (thousands of bls)
2,073 2,073
Natural Gas Liquids Sold
(thousands of gallons) 198,339 198,339
Average Selling Price
Gas - Utility Sales (per Mcf) $7.849
- Energy Resource Production $2.349
- Energy Resource Marketing $2.380
Oil (per barrel) $14.968
Natural Gas Liquids (per gallon) $.276
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Twelve Months Ended March 31, 1993
Utility Energy
Services Resources Eliminations Consolidated
<S> <C> <C> <C> <C>
Gas Produced, Purchased and Sold (MMcf):
Produced 2,820 49,008 51,828
Purchased:
Pipeline suppliers 3,226 3,226
Other producers 44,779 136,495 181,274
Sub-total 48,005 136,495 184,500
Inter-segment purchases 8,538 2,574 (11,112)
Total purchases 56,543 139,069 (11,112) 184,500
Total produced and purchased 59,363 188,077 (11,112) 236,328
Deduct:
Net decrease in gas in storage (27) (27)
Extracted natural gas liquids
(equivalent gas volumes) 1,989 1,989
System use and unaccounted for 14,435 585 15,020
Total 44,955 185,503 (11,112) 219,346
Gas Sales (MMcf):
Residential 30,156 30,156
Commercial 7,827 7,827
Industrial 4,920 (585) 4,335
Utilities 63 63
Production 49,008 (4,609) 44,399
Marketing 136,495 (3,929) 132,566
Total gas sales 42,966 185,503 (9,123) 219,346
Processed gas extracted 1,989 (1,989)
Total 44,955 185,503 (11,112) 219,346
Natural Gas Transported (MMcf) 63,272 (35,032) 28,240
Oil Produced and Sold (thousands of bls) 2,302 2,302
Natural Gas Liquids Sold
(thousands of gallons) 62,184 62,184
Average Selling Price
Gas - Utility Sales (per Mcf) $7.314
- Energy Resource Production $2.077
- Energy Resource Marketing $2.153
Oil (per barrel) $18.352
Natural Gas Liquids (per gallon) $.337
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
Information by Business Segment
(Thousands)
Three Months Ended Twelve Months Ended
March 31, March 31,
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Operating Revenues:
Energy resources $259,886 $124,453 $ 878,497 $491,425
Utility services 197,586 159,345 435,538 390,345
Sales between segments (17,934) (13,979) (49,522) (44,785)
------- ------- --------- -------
Total $439,538 $269,819 $1,264,513 $836,985
======= ======= ========= =======
Operating Income:
Energy resources $ 12,811 $ 12,158 $ 54,806 $ 45,765
Utility services 48,168 43,191 81,321 73,659
-------- ------- -------- -------
Total $ 60,979 $ 55,349 $ 136,127 $119,424
======= ======= ========= =======
Net Income:
Energy resources $ 7,971 $ 8,100 $ 37,871 $ 32,558
Utility services 28,388 22,695 41,148 32,158
------ ------ --------- -------
Total $ 36,359 $ 30,795 $ 79,019 $ 64,716
======= ======= ========= =======
</TABLE>
<PAGE>
Management's Discussion and Analysis of Financial Condition and Results
of Operations
OVERVIEW
Consolidated net income for the quarter ended March 31, 1994 was
$36.4 million, or $1.05 per share, compared with $30.8 million, or $.98
per share, for the quarter ended March 31, 1993. The 18 percent
increase in income is due primarily to higher margins realized from
utility service operations reflecting colder weather.
Consolidated net income for the twelve months ended March 31, 1994
was $79.0 million, or $2.39 per share, compared with $64.7 million, or
$2.06 per share, for the twelve months ended March 31, 1993. The 22
percent increase in income is due primarily to increased margins from
utility service operations and increases in production and average
wellhead prices for natural gas.
RESULTS OF OPERATIONS
ENERGY RESOURCES
________________
Operating revenues were $259.9 million for the quarter ended March
31, 1994 compared with $124.5 million for the quarter ended March 31,
1993. Operating revenues for the twelve months ended March 31, 1994
were $878.5 million compared with $491.4 million for the twelve months
ended March 31, 1993. The increase in revenues for the current
periods is due primarily to increases in gas marketing activity,
production and average wellhead prices for natural gas and increased
production of natural gas liquids which were partially offset by lower
prices for oil and natural gas liquids. The increase in marketed natural
gas and production of natural gas liquids is due primarily to the
acquisition of Louisiana Intrastate Gas Company (LIG) on June 30, 1993.
Three Months Ended Twelve Months Ended
March 31, March 31,
Energy Resources 1994 1993 1994 1993
Operating Revenues (thousands):
Natural Gas:
Production $ 39,364 $ 29,799 $130,924 $101,774
Marketing 194,611 75,200 625,241 293,884
Oil 6,207 9,359 31,024 42,242
Natural Gas Liquids 13,040 5,392 54,769 20,943
Direct Billing Settlements - - 7,815 7,815
Other 6,664 4,703 28,724 24,767
------- ------- ------- -------
Total Revenues $259,886 $124,453 $878,497 $491,425
======= ======= ======= =======
Sales Quantities:
Natural Gas (MMcf):
Production 15,283 13,095 55,738 49,008
Marketing 79,641 34,911 262,761 136,495
Oil (MBls) 510 549 2,073 2,302
Natural Gas Liquids
(thousands of gallons) 51,896 15,748 198,339 62,184
Cost of gas purchased amounted to $201.9 million for the quarter ended
March 31, 1994 compared with $77.6 million for the quarter ended March
31, 1993. Gas purchases for the twelve months ended March 31, 1994
amounted to $658.1 million compared with $302.5 million for the twelve
months ended March 31, 1993. The increased cost for the current
periods reflects the increase in volume of marketed natural
gas and requirements for the higher production level of natural
gas liquids.
Other operating expenses were $45.2 million for the quarter ended
March 31, 1994 compared with $34.7 million for the quarter ended March
31, 1993. Other operating expenses for the twelve months ended March
31, 1994 were $165.6 million compared with $143.1 million for the twelve
months ended March 31, 1993. Increases for the current periods
are attributed to increased production expenses and depreciation and
depletion related to the acquisition of LIG on June 30, 1993, as well as
the higher level of natural gas production.
Operating income was $12.8 million for the quarter ended March 31,
1994 compared with $12.2 million for the quarter ended March 31, 1993.
Operating income for the twelve months ended March 31, 1994 was $54.8
million compared with $45.8 million for the twelve months ended March
31, 1993. The increases for the current periods are attributed to
increases in production and average wellhead prices for natural gas.
The Company expects 1994 gas and oil production to be 15 to 20 percent
greater than 1993 levels. Average wellhead gas prices for the first
quarter of 1994 were $.30/Mcf higher than the first quarter of
1993 due in part to the high winter demand resulting from
extremely cold weather experienced throughout most of the eastern
United States. The Company believes that the need to
refill storage pools depleted to meet the high winter demand,
plus a growing interest in security of supply following the
recent cold weather, should sustain the strength in
wellhead gas prices.
UTILITY SERVICES
________________
Operating revenues, which are derived principally from the sale and
transportation of natural gas, were $197.6 million for the quarter ended
March 31, 1994 compared with $159.3 million for the quarter ended March
31, 1993. The increase in revenues is the result of increased retail
gas sales due primarily to colder weather and increased retail rates to
pass-through higher gas costs to customers. Operating revenues were
$435.6 million for the twelve months ended March 31, 1994 compared with
$390.3 million for the twelve months ended March 31, 1993. The increase
in revenues is the result of increased retail gas sales reflecting
colder weather, the return to gas sales of some commercial and
industrial customers previously using transportation service, and the
full-year impact of a retail rate increase for Pennsylvania customers
that went into effect in July of 1992. The implementation of Order 636
has resulted in a shift of utility revenues from pipeline sales to
marketed gas sales.
Three Months Ended Twelve Months Ended
March 31, March 31,
Utility Services 1994 1993 1994 1993
Operating Revenues (thousands):
Retail Gas Sales $170,648 $136,392 $348,568 $301,759
Pipeline Gas Sales 62 6,035 6,284 25,294
Transportation Service 14,251 13,270 45,741 48,327
Storage Service 2,157 1,477 7,607 5,602
Marketed Gas Sales 8,401 - 18,601 -
Other 2,067 2,171 8,737 9,363
------- ------- ------- -------
Total Revenues $197,586 $159,345 $435,538 $390,345
======= ======= ======= =======
Sales Quantities (MMcf):
Retail Gas Sales 22,024 18,283 43,723 37,817
Pipeline Gas Sales 16 1,358 1,472 6,067
Transportation 11,092 10,329 67,035 63,272
Marketed Gas 2,981 - 7,033 -
Heating Degree Days (Normal:
Quarter-2,995; Annual-5,968)
3,182 2,798 6,012 5,679
Cost of gas purchased amounted to $97.0 million for the quarter
ended March 31, 1994 compared with $73.3 million for the quarter ended
March 31, 1993. The increase in the cost of gas purchased is the result
of the increase in retail sales volumes and the pass-through of higher
costs in rates to retail customers. Gas purchases amounted to $177.3
million for the twelve months ended March 31, 1994 compared with $165.8
million for the twelve months ended March 31, 1993. The increase is the
result of higher retail sales volumes.
Other operating expenses amounted to $52.4 million for the quarter
ended March 31, 1994 compared with $42.8 million for the quarter ended
March 31, 1993. The increase is attributed primarily to provisions for
estimated interstate rate refunds and higher taxes other than income
related to increased sales. Other operating expenses were $177.0
million for the twelve months ended March 31, 1994 compared with $150.8
million for the twelve months ended March 31, 1993. The increase
reflects the recording of the provision for estimated interstate rate
refunds, higher taxes other than income related to increased sales, and
increased depreciation.
Operating income was $48.2 million for the quarter ended March 31,
1994 compared with $43.2 million for the quarter ended March 31, 1993.
The increase in operating income is due primarily to increased retail
sales reflecting colder weather. Operating income for the twelve months
ended March 31, 1994 was $81.3 million compared with $73.7 million for
the twelve months ended March 31, 1993. The increase in operating
income is due to increased retail gas sales reflecting colder weather
and the full-year impact of a retail rate increase for Pennsylvania
customers that went into effect in July of 1992.
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 three months ended March 31, 1994 were
$24.5 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 March 31, 1994, $167.1 million of commercial paper and $18.1 million
of bank loans were outstanding at an average interest rate of 3.49
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 intends to file a shelf registration by May 31, 1994
for the issuance of $100 million of Medium-Term Notes -- Series C.
Proceeds from issuance of the Medium-Term Notes will be used to repay
short-term loans incurred to finance a portion of capital expenditures
and acquisitions.
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. Gas stored
underground--current inventory decreased reflecting higher withdrawals
to meet the demand caused by colder weather. The increase in Energy
Resource property, plant and equipment and accumulated depreciation,
accounts receivable, accounts payable, prepaid expenses and other
current assets, deferred income taxes, other current liabilities and
other deferred credits compared to March 31, 1993 are due primarily to
the acquisition of LIG. The increase in regulatory assets since March
31, 1993 is due to accounting for income taxes applicable to rate
regulated operations.
<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
March 31, 1994:
None
<PAGE>
Signature
17
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: May 13, 1994
