SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1995
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _______ TO _______
COMMISSION FILE NUMBER 1-3551
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, 1995
Common stock, no par value 34,694,575 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, 1995 and 1994 and the
Twelve Months Ended March 31, 1995 and 1994 1
Statements of Consolidated Cash Flows
for the Three Months Ended March 31, 1995
and 1994 and the Twelve Months Ended March 31,
1995 and 1994 2
Consolidated Balance Sheets, March 31, 1995 and
1994 and December 31, 1994 3 - 4
Long-Term Debt, March 31, 1995 and 1994 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 - 17
Part II. Other Information 18
Signature 19
<PAGE>
<TABLE>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
Statements of Consolidated Income
(Thousands Except Per Share Amounts)
<CAPTION>
Three Months Ended Twelve Months Ended
March 31, March 31,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Operating Revenues . . . $404,691 $439,538 $1,362,433 $1,264,513
Cost of Gas Purchased. . 258,557 281,646 903,816 788,437
Net operating revenues. 146,134 157,892 458,617 476,076
Operating Expenses:
Operation . . . . . . . 48,314 50,888 190,225 185,151
Maintenance . . . . . . 6,978 7,128 31,587 30,127
Depreciation and
depletion . . . 28,625 22,894 99,078 82,139
Taxes other than income 13,905 16,003 40,146 42,532
Total operating
expenses. . . . 97,822 96,913 361,036 339,949
Operating Income . . . . 48,312 60,979 97,581 136,127
Other Income . . . . . . (611) 332 2,220 1,755
Interest Charges . . . . 12,866 9,998 46,773 39,662
Income Before
Income Taxes . . . 34,835 51,313 53,028 98,220
Income Taxes . . . . . . 7,081 14,954 904 19,201
Net Income . . . . . . .$ 27,754 $ 36,359 $ 52,124 $ 79,019
Average Common Shares
Outstanding. 34,635 34,479 34,554 33,070
Earnings Per Share of
Common Stock. . . . . . $.80 $ 1.05 $ 1.51 $ 2.39
Dividends Per Share of
Common Stock. . . . . . $.59 $ .57 $ 1.17 $ 1.13
</TABLE>
<PAGE>
<TABLE>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
Statements of Consolidated Cash Flows
(Thousands)
<CAPTION>
Three Months Ended Twelve Months Ended
March 31, March 31,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Cash Flows from Operating Activities:
Net Income. . . . . . . . . . $ 27,754 $ 36,359 $ 52,124 $ 79,019
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation and depletion.. . . . 28,625 22,894 99,078 82,139
Deferred income taxes (benefits) . (9,616) 824 (15,499) 3,271
Other - net . . . . . . . 2,543 3,080 1,029 2,129
Changes in other assets and liabilities:
Accounts receivable and unbilled revenues (20,161) (62,813) 43,375 (73,672)
Gas stored underground. . 11,412 16,648 (2,278) 5,488
Material and supplies . . 2,774 (238) 2,397 (2,536)
Deferred purchased gas cost . . . 25,695 7,931 10,022 (17,687)
Prepaid expenses and other. . . . (2,657) (4,223) (8,026) (4,738)
Regulatory assets . . . . 21 (1,254) (88) (19,204)
Accounts payable. . . . . (10,397) 21,219 (52,030) 43,156
Accrued taxes . . . . . . (3,684) 17,203 (16,657) 2,439
Refunds due customers . . 2,792 1,909 8,932 4,883
Customer credit balances. (9,198) (7,560) 1,211 (919)
Other - net . . . . . . . 15,542 2,515 18,496 5,959
Total adjustments. . . . 33,691 18,135 89,962 30,708
Net cash provided (used) by operating
activities. . . . . 61,445 54,494 142,086 109,727
Cash Flows from Investing Activities:
Capital expenditures . . . . (30,724) (24,536) (152,362) (337,357)
Proceeds from sale of property. . . . 647 231 1,611 1,077
Net cash used in investing activities . (30,077) (24,305) (150,751) (336,280)
Cash Flows from Financing Activities:
Issuance of common stock. . . 658 479 1,970 112,701
Purchase of treasury stock . (69) - (464) (10)
Dividends paid. . . . . . . . (10,224) (9,827) (40,083) (36,625)
Proceeds from issuance of long-term debt. . . . - 43,185 (102) 43,112
Repayments and retirements of long-term debt. . - (1,971) - (1,971)
Increase (decrease) in short-term loans . . . . (28,441) (68,700) 55,659 114,700
Net cash provided (used) by
financing activities. . . . (38,076) (36,834) 16,980 231,907
Increase (decrease) in cash and cash equivalents (6,708) (6,645) 8,315 5,354
Cash and cash equivalents at beginning of period 23,415 15,037 8,392 3,038
Cash and cash equivalents at end of period . . $ 16,707 $ 8,392 $ 16,707 $ 8,392
Cash paid during the period for:
Interest (net of amount capitalized). . . . . $ 13,418 $ 11,786 $ 41,737 $ 35,696
Income taxes . . . . . . . . $ (465) $ (2,281) $ 14,914 $ 24,052
</TABLE>
<PAGE>
<TABLE>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Thousands)
<CAPTION>
March 31, December 31,
1995 1994 1994
ASSETS
<S> <C> <C> <C>
Property, Plant and Equipment:
Exploration and production
(successful efforts method) $ 998,625 $ 917,568 $ 983,328
Natural gas marketing . . . . . . . . . 312,919 298,999 309,579
Natural gas distribution. . . . . . . . 561,455 528,674 552,789
Natural gas transmission. . . . . . . . 389,177 382,062 387,921
Total. . . . . . . . . . . . . . . . 2,262,176 2,127,303 2,233,617
Less accumulated depreciation and depletion 666,217 580,634 637,951
Net property, plant and equipment. 1,595,959 1,546,669 1,595,666
Current Assets:
Cash and cash equivalents . . . . . . . 16,707 8,392 23,415
Accounts receivable (less accumulated
provision for doubtful accounts:
March 31, 1995 $13,224; 1994 $12,995;
December 31, 1994, $10,890) . . . . . 199,845 240,383 172,178
Unbilled revenues . . . . . . . . . . 15,954 19,020 25,794
Gas stored underground - current inventory 3,689 1,411 15,101
Material and supplies . . . . . . . . . 10,102 12,499 12,876
Deferred purchased gas cost . . . . . . (805) 9,217 24,890
Prepaid expenses and other . . . . . . 36,226 28,200 33,569
Total current assets . . . . . . . . 281,718 319,122 307,823
Other Assets:
Regulatory assets . . . . . . . . . . . 88,366 88,278 88,387
Other . . . . . . . . . . . . . . . . 26,722 26,940 27,246
Total other assets . . . . . . . . . 115,088 115,218 115,633
Total . . . . . . . . . . . . . . $1,922,765 $1,981,009 $2,019,122
</TABLE>
<PAGE>
<TABLE>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Thousands)
<CAPTION>
March 31, December 31,
1995 1994 1994
CAPITALIZATION AND LIABILITIES
<S> <C> <C> <C>
Capitalization:
Common stockholders' equity:
Common stock, no par value, authorized
80,000 shares; shares issued March 31, 1995,
35,329; March 31, 1994, 35,113; December 31,
1994, 35,173 . . . . . . . . . . . . . $ 227,086 $ 223,443 $ 224,963
Retained earnings . . . . . . . . . . . 548,775 537,137 541,476
Treasury stock, shares at cost March 31, 1995,
634; March 31, 1994, 618; December 31, 1994,
632. . . . . . . . . . . . . . . . . . (15,002) (14,538) (14,933)
Foreign currency translation. . . . . (1,514) (1,290) (1,504)
Total common stockholders' equity. . 759,345 744,752 750,002
Long-term debt . . . . . . . . . . . . . 397,026 422,401 398,282
Total capitalization . . . . . . . 1,156,371 1,167,153 1,148,284
Current Liabilities:
Long-term debt payable within one year . 24,500 - 24,500
Short-term loans . . . . . . . . . . . . 240,859 185,200 269,300
Accounts payable . . . . . . . . . . . . 112,997 165,027 123,394
Accrued taxes . . . . . . . . . . . . . . 15,904 32,561 19,588
Accrued interest . . . . . . . . . . . . 11,421 9,832 13,032
Refunds due customers . . . . . . . . . . 25,047 16,115 22,255
Dividends payable . . . . . . . . . . . 10,231 9,828 -
Customer credit balances . . . . . . . . 1,229 18 10,427
Other . . . . . . . . . . . . . . . . . . 197 17,083 16,399
Total current liabilities. . . . . 442,385 435,664 498,895
Deferred and Other Credits:
Deferred income taxes . . . . . . . . . . 344,875 331,129 326,597
Deferred investment tax credits . . . . . 21,816 22,907 22,082
Other . . . . . . . . . . . . . . . . . . 27,318 24,156 23,264
Total deferred and other credits . 394,009 378,192 371,943
Total . . . . . . . . . . . . . . $1,992,765 $1,981,009 $2,019,122
</TABLE>
<PAGE>
<TABLE>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
Long-Term Debt
(Thousands)
<CAPTION>
Annual Maturities
Debt Maturities After One Year
March 31, March 31,
1995 1994 1995 1994
<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) 70,675 69,875
9 1/2% Convertible subordinated
debentures, due January 15, 2006 851 2,526
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 24,500 75,500 100,000
Total . . . . . . . . . . . . . $24,500 $ 0 $397,026 $422,401
<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 th e
Company's 1994 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, 1995 and 1994 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, 1995
and 1994 are not indicative of results for a full year because of the
seasonal nature of the Company's operations.
D. At March 31, 1995, 2,713,000 shares of Common Stock were reserved as
follows: 77,000 shares for conversion of the 9 1/2% Convertible
Subordinated Debentures, 653,000 shares for issuance under
the Key Employee Restricted
Stock Option and Stock Appreciation Rights Incentive Compensation Plan,
1,726,000 shares for issuance under the Long-Term Incentive Plan, 76,000
shares for issuance under the Non-Employee Directors' Stock Incentive Plan,
and 181,000 shares for issuance under the Company's Dividend Reinvestment
and Stock Purchase Plan.
<PAGE>
<TABLE>
<CAPTION>
Three Months Ended March 31, 1995
Exploration Natural Gas Natural Gas Natural Gas Intersegment
and Production Marketing Distribution Transmission Eliminations Consolidated
<S> <C> <C> <C> <C> <C> <C>
Gas Produced, Purchased and Sold (MMcf):
Produced 17,262 29 532 17,823
Purchased:
Other producers 113,481 11,894 1,571 126,946
Inter-segment purchases 958 10,744 5,030 (16,732)
Total purchases 958 124,225 16,924 1,571 (16,732) 126,946
Total produced and purchased 18,220 124,225 16,953 2,103 (16,732) 144,769
Deduct:
Net increase (decrease) in gas in storage (5,117) (171) (5,288)
Extracted natural gas liquids
(equivalent gas volumes) 467 1,593 2,060
System use and unaccounted for 131 407 4,210 225 4,973
Total 17,622 122,225 17,860 2,049 (16,732) 143,024
Gas Sales (MMcf):
Residential 13,414 13,414
Commercial 1,778 1,778
Industrial and Utility 2,668 1 2,669
Production 17,262 (228) 17,034
Marketing 360 122,225 2,048 (16,504) 108,129
Total 17,622 122,225 17,860 2,049 (16,732) 143,024
Natural Gas Transported (MMcf) 26,593 6,309 30,429 (27,720) 35,611
Oil Produced and Sold (thousands of bls) 511 511
Natural Gas Liquids Sold
(thousands of gallons) 15,047 48,233 63,280
Average Selling Price:
Residential Gas Sales (per Mcf) $ 9.155
Commercial Gas Sales 9.468
Industrial and Utility Gas Sales 1.883
Produced Natural Gas $ 1.612
Marketed Natural Gas 1.347 $ 1.602 $2.073
Oil (per barrel) 16.256
Natural Gas Liquids (per gallon) .349 .267
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Three Months Ended March 31, 1994
Exploration Natural Gas Natural Gas Natural Gas Intersegment
and Production Marketing Distribution Transmission Eliminations Consolidated
<S> <C> <C> <C> <C> <C> <C>
Gas Produced, Purchased and Sold (MMcf):
Produced 15,283 15 408 15,706
Purchased:
Other producers 80,634 12,593 2,690 95,917
Inter-segment purchases 519 13,455 4,728 307 (19,009)
Total purchases 519 94,089 17,321 2,997 (19,009) 95,917
Total produced and purchased 15,802 94,089 17,336 3,405 (19,009) 111,623
Deduct:
Net increase (decrease) in gas in storage (5,961) (5,961)
Extracted natural gas liquids
(equivalent gas volumes) 226 1,267 1,493
System use and unaccounted for 86 380 1,273 135 1,874
Total 15,490 92,442 22,024 3,270 (19,009) 114,217
Gas Sales (MMcf):
Residential 15,457 15,457
Commercial 5,183 5,183
Industrial and Utility 1,384 289 (273) 1,400
Production 15,283 (1,678) 13,605
Marketing 207 92,442 2,981 (17,058) 78,572
Total 15,490 92,442 22,024 3,270 (19,009) 114,217
Natural Gas Transported (MMcf) 21,731 3,122 35,331 (34,789) 25,395
Oil Produced and Sold (thousands of bls) 510 510
Natural Gas Liquids Sold
(thousands of gallons) 8,442 43,454 51,896
Average Selling Price:
Residential Gas Sales (per Mcf) $ 8.393
Commercial Gas Sales 6.753
Industrial and Utility Gas Sales 4.275 $ 4.647
Produced Natural Gas $ 2.520
Marketed Natural Gas 1.884 $2.393 2.818
Oil (per barrel) 12.171
Natural Gas Liquids (per gallon) .272 .247
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Twelve Months Ended March 31, 1995
Exploration Natural Gas Natural Gas Natural Gas Intersegment
and Production Marketing Distribution Transmission Eliminations Consolidated
<S> <C> <C> <C> <C> <C> <C>
Gas Produced, Purchased and Sold (MMcf):
Produced 64,486 157 1,995 66,638
Purchased:
Other producers 422,557 44,933 6,144 473,634
Inter-segment purchases 2,962 45,209 13,265 165 (61,601)
Total purchases 2,962 467,766 58,198 6,309 (61,601) 473,634
Total produced and purchased 67,448 467,766 58,355 8,304 (61,601) 540,272
Deduct:
Net increase (decrease) in gas in storage 1,085 (352) 733
Extracted natural gas liquids
(equivalent gas volumes) 1,787 6,703 8,490
System use and unaccounted for 525 1,629 9,328 358 11,840
Total 65,136 459,434 47,942 8,298 (61,601) 519,209
Gas Sales (MMcf):
Residential 27,527 27,527
Commercial 6,276 6,276
Industrial and Utility 14,139 100 (3,303) 10,936
Production 64,486 (5,787) 58,699
Marketing 650 459,434 8,198 (52,511) 415,771
Total 65,136 459,434 47,942 8,298 (61,601) 519,209
Natural Gas Transported (MMcf) 108,588 11,798 118,570 (93,403) 145,553
Oil Produced and Sold (thousands of bls) 1,987 1,987
Natural Gas Liquids Sold
(thousands of gallons) 57,637 199,272 256,909
Average Selling Price:
Residential Gas Sales (per Mcf) $ 9.388
Commercial Gas Sales 7.774
Industrial and Utility Gas Sales 2.190
Produced Natural Gas $ 1.723
Marketed Natural Gas 1.578 $1.751 $2.084
Oil (per barrel) 15.772
Natural Gas Liquids (per gallon) .316 .267
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Twelve Months Ended March 31, 1994
Exploration Natural Gas Natural Gas Natural Gas Intersegment
and Production Marketing Distribution Transmission Eliminations Consolidated
<S> <C> <C> <C> <C> <C> <C>
Gas Produced, Purchased and Sold (MMcf):
Produced 55,738 116 1,632 57,486
Purchased:
Other producers 267,671 32,453 18,939 319,063
Inter-segment purchases 3,405 43,708 15,349 2,769 (65,231)
Total purchases 3,405 311,379 47,802 21,708 (65,231) 319,063
Total produced and purchased 59,143 311,379 47,918 23,340 (65,231) 376,549
Deduct:
Net increase (decrease) in gas in storage 630 3,796 4,426
Extracted natural gas liquids
(equivalent gas volumes) 2,725 4,429 7,154
System use and unaccounted for 229 1,181 3,565 1,387 6,362
Total 56,189 305,769 43,723 18,157 (65,231) 358,607
Gas Sales (MMcf):
Residential 31,410 31,410
Commercial 9,684 9,684
Industrial and Utility 2,629 10,672 (9,842) 3,459
Production 55,738 (2,464) 53,274
Marketing 451 305,769 7,033 (52,473) 260,780
Total Gas Sales 56,189 305,769 43,723 17,705 (64,779) 358,607
Processed Gas Extracted 452 (452)
Total 56,189 305,769 43,723 18,157 (65,231) 358,607
Natural Gas Transported (MMcf) 72,390 9,613 109,463 (86,050) 105,416
Oil Produced and Sold (thousands of bls) 2,073 2,073
Natural Gas Liquids Sold
(thousands of gallons) 53,667 144,672 198,339
Average Selling Price:
Residential Gas Sales (per Mcf) $ 8.577
Commercial Gas Sales 7.000
Industrial and Utility Gas Sales 4.328 $ 5.212
Produced Natural Gas $ 2.309
Marketed Natural Gas 2.075 $ 2.300 2.645
Oil (per barrel) 14.968
Natural Gas Liquids (per gallon) .307 .265
</TABLE>
<PAGE>
<TABLE>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
Information by Business Segment
(Thousands)
<CAPTION>
Three Months Ended Twelve Months Ended
March 31, March 31,
1995 1994 1995 1994
(Thousands)
<S> <C> <C> <C> <C>
Operating Revenues:
Exploration and production . $ 46,344 $ 52,136 $ 190,003 $ 205,510
Natural gas marketing . . 211,005 233,926 867,857 749,707
Natural gas distribution. 162,281 179,673 373,083 370,205
Natural gas transmission 31,645 36,478 111,936 154,281
Sales between segments . (46,584) (62,675) (180,446) (215,190)
Total . . . . . . . . $404,691 $439,538 $1,362,433 $1,264,513
Operating Income:
Exploration and production . $ 1,731 $ 11,354 $ 21,220 $ 42,700
Natural gas marketing . . 2,247 1,457 4,879 12,106
Natural gas distribution. 32,787 36,762 39,205 48,689
Natural gas transmission 11,547 11,406 32,277 32,632
Total . . . . . . . . . $ 48,312 $ 60,979 $ 97,581 $ 136,127
Capital Expenditures:
Exploration and production . .$ 16,384 $ 13,784 $ 87,060 $ 96,602
Natural gas marketing . . 3,327 1,105 17,987 196,147
Natural gas distribution. 9,522 5,975 36,259 26,647
Natural gas transmission. 1,491 3,672 11,056 17,961
Total . . . . . . . . . $ 30,724 $ 24,536 $ 152,362 $ 337,357
</TABLE>
<PAGE>
Management's Discussion and Analysis of Financial Condition and Results of
Operations
OVERVIEW
Consolidated net income for the quarter ended March 31, 1995 was $27.8
million or $.80 per share, compared with $36.4 million or
$1.05 per share for the
quarter ended March 31, 1994. The decrease
in income is due to a 36 percent
decline in average wellhead gas prices and lower
retail utility gas sales reflecting 12
percent warmer weather. These decreases were partially
offset by a 13 percent
increase in natural gas production.
Consolidated net income for the twelve months ended March 31, 1995 was
$52.1 million or $1.51 per share, compared with $79.0
million or $2.39 per share
for the twelve months ended March 31, 1994. The decrease in income is due
primarily to a 25 percent decline in average wellhead
gas prices, lower margins from
the Company's Louisiana Intrastate Gas subsidiary,
and lower retail utility gas sales
reflecting 13 percent warmer weather. The impact of these items was partially
offset by a 16 percent increase in natural gas production.
RESULTS OF OPERATIONS
EXPLORATION AND PRODUCTION
Operating revenues, which are derived primarily from the sale of produced
natural gas, oil and natural gas liquids and from contract drilling,
were $46.3 million for the quarter ended March 31, 1995, compared
with $52.1 million for the quarter
ended March 31, 1994. Operating revenues for the twelve months ended March
31, 1995 were $190.0 million compared with $205.5 million for the twelve months
ended March 31, 1994. The decrease in revenues for the current periods is due
primarily to lower wellhead prices for natural gas which were
partially offset by
increased production of natural gas and increases
in production and prices for
natural gas liquids.
<PAGE>
Three Months Ended Twelve Months Ended
March 31, March 31,
Exploration and Production 1995 1994 1995 1994
Operating Revenues (thousands):
Natural Gas . . . . . . $27,828 $38,506 $111,132 $128,691
Oil . . . . . . . . 8,307 6,207 31,339 31,024
Natural Gas Liquids . . 5,252 2,299 18,197 16,452
Contract Drilling . . . 2,846 3,474 14,799 14,928
Direct Billing Settlements . . . - - 7,815 7,815
Other . 2,111 1,650 6,721 6,600
Total Revenues . $46,344 $52,136 $190,003 $205,510
Sales Quantities:
Natural Gas (MMcf). . . 17,262 15,283 64,486 55,738
Oil (MBls). . . . . . . 511 510 1,987 2,073
Natural Gas Liquids
(thousands of gallons) . . . 15,047 8,442 57,637 53,667
<PAGE>
Gas purchased amounted to $2.8 million for the quarter ended March 31,
1995 compared with $2.7 million for the quarter ended March 31, 1994. Gas
purchased for the twelve months ended March 31, 1995 amounted to $10.7 million
compared with $15.4 million for the twelve months ended March 31, 1994. The
decrease in gas purchased for the twelve month period is due to lower prices.
Other operating expenses were $41.8 million for the three months ended
March 31, 1995 compared with $38.0 million for the three months ended March
31, 1994. Other operating expenses for the twelve months ended March 31, 1995
were $158.1 million compared with $147.4 million for the twelve months ended
March 31, 1994. Increases for the current periods are attributed to increased
depreciation and depletion related to the higher level of
natural gas production.
Operating income was $1.7 million for the three months ended March 31,
1995 compared with $11.4 million for the three months ended March 31, 1994.
Operating income for the twelve months ended March 31, 1995 was $21.2 million
compared with $42.7 million for the twelve months ended March 31, 1994. The
decrease in operating income for the current periods reflects lower
wellhead prices
for natural gas which was partially offset by increased gas production.
Average wellhead natural gas prices continued to decline during the first
quarter of 1995. Prices for oil and natural gas liquids
rebounded during the first
quarter of 1995 reversing the declining trend that began as far back as 1991.
While natural gas prices are expected to remain depressed,
gas production for 1995 is
expected to be 10 to 15 percent higher than 1994 levels which will lessen the
impact of lower prices.
NATURAL GAS MARKETING
Operating revenues, which are derived primarily
from the marketing of natural
gas, sale of produced natural gas liquids, and intrastate
transportation of natural gas
in Louisiana, were $211.0 million for the three months ended March 31, 1995
compared with $233.9 million for the three months ended March 31, 1994. The
decrease in revenues reflects a 33 percent decrease in the average price of
marketed gas partially offset by a 32 percent increase in marketed gas volumes.
Operating revenues for the twelve months ended March 31, 1995 were $867.9
million compared with $749.7 million for the twelve months ended March 31, 1994.
Increases in marketed gas sales and production of
natural gas liquids, reflecting a full year of operations
of LIG, were partially offset by a 24 percent decline in the
average price of marketed natural gas.
<PAGE>
Three Months Ended Twelve Months Ended
March 31, March 31,
Natural Gas Marketing 1995 1994 1995 1994
Operating Revenues (thousands):
Natural Gas Marketing $195,755 $221,255 $804,582 $703,071
Natural Gas Liquids . 12,884 10,741 53,256 38,317
Transportation. . . . 2,293 1,887 9,672 8,134
Other . 73 43 347 185
Total Revenues $211,005 $233,926 $867,857 $749,707
Sales Quantities:
Marketed Natural Gas (MMcf). . 122,225 92,442 459,434 305,769
Natural Gas Liquids
(thousands of gallons) . . . 48,233 43,454 199,272 144,672
Gas purchased amounted to $201.3 million for the three months ended March
31, 1995 compared with $225.4 million for the three months ended March 31,
1994. The decrease in cost of gas purchased is due primarily
to the lower prices of
gas purchased for marketing. Gas purchased for the twelve months ended March
31, 1995 was $833.3 million compared with $719.4 million for the twelve months
ended March 31, 1994. The increase reflects the higher volume of marketed
natural gas and requirements for the higher production
levels of natural gas liquids
partially offset by lower prices for purchased gas.
<PAGE>
Other operating expenses were $7.5 million for the three months ended March
31, 1995 compared with $7.0 million for the three months ended March 31, 1994.
Other operating expenses for the twelve months ended March 31, 1995 were $29.7
million compared with $18.2 million for the twelve months ended March 31, 1994.
The increase for the twelve months reflects a full year of operations for LIG.
Operating income was $2.2 million for the three months ended March 31,
1995 compared with $1.5 million for the three months ended March 31, 1994.
Operating income for the twelve months ended March 31, 1995 was $4.9 million
compared with $12.1 million for the twelve months ended March 31, 1994. The
decrease for the twelve months is due to lower margins for liquids processing.
NATURAL GAS DISTRIBUTION
Operating revenues, which are derived from the sale and transportation of
natural gas primarily to retail customers at state regulated rates, were $162.3
million for the three months ended March 31, 1995 compared with $179.7 million
for the three months ended March 31, 1994. The decrease in revenues is due
primarily to lower retail gas sales reflecting
weather that was 12 percent warmer
than the first quarter of 1994. Operating revenues for the twelve months ended
March 31, 1995 were $373.1 million compared with $370.2 million for the twelve
months ended March 31, 1994. The increase in
revenues is due to increased sales
to utilities and higher transportation revenues which were
substantially offset by
lower retail gas sales reflecting 13 percent warmer weather.
<PAGE>
Three Months Ended Twelve Months Ended
March 31, March 31,
Natural Gas Distribution 1995 1994 1995 1994
Operating Revenues (thousands):
Residential Gas Sales $122,807 $129,730 $258,433 $269,408
Commercial Gas Sales. 16,834 35,001 48,789 67,784
Industrial and Utility Gas Sales. 5,025 5,917 30,961 11,377
Transportation Service . . . . . 16,292 7,714 30,328 17,210
Other . 1,323 1,311 4,572 4,426
Total Revenues. . . $162,281 $179,673 $373,083 $370,205
Sales Quantities (MMcf):
Residential Gas Sales 13,414 15,457 27,527 31,410
Commercial Gas Sales. 1,778 5,183 6,276 9,684
Industrial and Utility Gas Sales. 2,668 1,384 14,139 2,629
Transportation Deliveries. . . . 6,309 3,122 11,798 9,613
Heating Degree Days . 2,796 3,182 5,221 6,012
Gas purchased amounted to $96.7 million for the three months ended March
31, 1995 compared with $107.7 million for the three months ended March 31,
1994. The decrease in gas costs is due primarily to lower retail
gas sales. Gas
purchased for the twelve months ended March 31, 1995 was $221.9 million
compared with $210.4 million for the twelve months ended March 31, 1994. The
increase in gas costs reflects the pass-through of
higher costs in rates to retail customers and the
increase in sales to utility customers partially offset by lower
retail gas sales.
<PAGE>
Other operating expenses were $32.8 million for the three months ended
March 31, 1995 compared with $35.2 million for the three months ended March
31, 1994. Other operating expenses for the twelve months ended March 31, 1995
of $112.0 million were substantially unchanged from the $111.1 million for the
twelve months ended March 31, 1994.
Operating income was $32.8 million for the three months ended March 31,
1995 compared with $36.8 million for the three months ended March 31, 1994.
Operating income for the twelve months ended March 31, 1995 was $39.2 million
compared with $48.7 million for the twelve months ended March 31, 1994. The
decrease in operating income for the current periods is due primarily
to lower retail
gas sales reflecting the warmer weather.
NATURAL GAS TRANSMISSION
Operating revenues, which are derived from the interstate
transportation and storage of natural gas
subject to federal regulation, and the marketing of natural
gas, were $31.6 million for the three months
ended March 31, 1995 compared with $36.5 million for
the three months ended March 31, 1994. The decrease is due
primarily to a decrease in the selling price and
volume of marketed natural gas. Operating revenues
for the twelve months ended March 31, 1995 were $111.9
million compared with $154.3 million for the twelve
months ended March 31, 1994. The decrease in
revenues reflects the effects of discontinuing merchant sales of gas
under the FERC Order 636
restructuring which took effect in the middle of 1993.
<PAGE>
Three Months Ended Twelve Months Ended
March 31, March 31,
Natural Gas Transmission 1995 1994 1995 1994
Operating Revenues (thousands):
Industrial and Utility Gas Sales. $ 363 $ 1,343 $ 1,329 $ 55,623
Marketed Gas Sales. . 4,245 8,401 17,088 18,601
Transportation Service . . . . . 20,849 21,348 69,459 61,553
Storage Service . . . 4,391 3,933 17,451 12,162
Other . 1,797 1,453 6,609 6,342
Total Revenues. . . $31,645 $36,478 $111,936 $154,281
Sales Quantities (MMcf):
Industrial and Utility Gas Sales. . 1 289 100 10,672
Marketed Gas Sales. . 2,048 2,981 8,198 7,033
Transportation Deliveries. . . . 30,429 35,331 118,570 109,463
Gas purchased amounted to $3.3 million for the three months ended March
31, 1995 compared with $ 7.5 million for the three months ended March 31, 1994.
The decrease is due primarily to lower marketed gas sales.
Gas purchased for the
twelve months ended March 31, 1995 was $14.0 million compared with $54.3
million for the twelve months ended March 31, 1994. The decrease in gas costs
reflects the elimination of pipeline gas sales pursuant to FERC Order 636
restructuring.
<PAGE>
Other operating expenses amounted to $16.8 million for the three months
ended March 31, 1995 compared with $17.6 million for the three months ended
March 31, 1994. Other operating expenses for the twelve months ended March 31,
1995 were $65.6 million compared with $67.4 million for the twelve months ended
March 31, 1994.
Operating income of $11.5 million for the three months ended March 31, 1995
and $32.3 million for the twelve months ended March 31, 1995 was substantially
the same as the 1994 amounts of $11.4 million and $32.7 million, respectively.
CAPITAL RESOURCES AND LIQUIDITY
Operating Activities
Cash required for operations is impacted primarily by the seasonal nature of
the Company's distribution 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.
In addition, short-term
loans are 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 its distribution,
transmission and
storage plant, and continuing development and expansion of its
resource production
activities. A total of $140.9 million has been authorized
for the 1995 capital
expenditure program, with $71.0 million
allocated to exploration and production,
$25.2 million for natural gas marketing,
$25.1 million for natural gas distribution
and $19.6 million for natural gas transmission.
Capital expenditures for the three
months ended March 31, 1995 were $30.7 million.
Short-term loans are also used as interim financing
for a portion of capital
expenditures. The Company expects to finance its
1995 capital expenditures with
cash generated from operations and temporarily with short-term loans.
<PAGE>
Financing Activities
The Company has adequate borrowing capacity to meet its financing
requirements. In January 1995, the Company established a five-year revolving
Credit Agreement with a group of banks providing $500
million of available credit.
The agreement requires a facility fee of one-tenth of
one percent. Bank loans and
commercial paper, supported by available credit, are used to meet short-term
financing requirements. At March 31, 1995, $210.5 million of commercial paper
and $30.4 million of bank loans were outstanding at an average interest rate of
6.11 percent. Adequate credit is expected
to continue to be available in the future.
In April 1995, Columbia Gas filed its bankruptcy
reorganization plan, which is
subject to approval, that includes settlement of
Equitable's producer claims for
abrogation of long-term contracts by Columbia. Based upon the plan, Equitable
expects to net approximately $25
million of pre-tax income, after pro-rata distribution to claim
co-owners. In addition, Equitable will receive approximately
$19 million related to direct billing settlements
previously approved by the FERC.
Balance Sheet Changes
The changes in deferred purchased gas cost are due to the timing of pass-
through of gas costs to ratepayers. Changes in deferred purchased gas costs
generally do not affect results of operations due to regulatory procedures for
purchased gas cost recovery in rates.
<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, 1995:
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: May 12, 1995
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