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 JUNE 30, 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 (IRS Employer
or organization) 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 June 30, 1995
Common stock, no par value 34,716,939 shares
<PAGE>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
Index
Part I. Financial Statements:
Statements of Consolidated Income for the Three
Months Ended June 30, 1995 and 1994, the Six
Months Ended June 30, 1995 and 1994 and the
Twelve Months Ended June 30, 1995 and 1994
Statements of Consolidated Cash Flows
for the Three Months Ended June 30, 1995
and 1994, the Six Months Ended June 30, 1995
and 1994, and the Twelve Months Ended June 30,
1995 and 1994
Consolidated Balance Sheets, June 30, 1995 and
1994 and December 31, 1994
Long-Term Debt, June 30, 1995 and 1994
Notes to Consolidated Financial Statements
Gas Produced, Purchased and Sold
Information by Business Segment
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Part II. Other Information
Signature
<PAGE>
<TABLE>
<CAPTION>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
Statements of Consolidated Income
(Thousands Except Per Share Amounts)
Three Months Ended Six Months Ended Twelve Months Ended
June 30, June 30, June 30,
1995 1994 1995 1994 1995 1994
<S> <C> <C> <C> <C> <C> <C>
Operating Revenues $316,534 $316,122 $721,225 $755,660 $1,362,845 $1,372,853
Cost of Gas Purchased 218,721 221,331 477,278 502,977 901,206 887,865
Net operating revenues 97,813 94,791 243,947 252,683 461,639 484,988
Operating Expenses:
Operation 49,620 45,244 97,934 96,132 194,601 190,363
Maintenance 6,223 7,719 13,201 14,847 30,091 30,862
Depreciation and
depletion 28,800 22,434 57,425 45,328 105,444 87,770
Taxes other than
income 8,138 9,340 22,043 25,343 38,944 43,790
Total operating
expenses 92,781 84,737 190,603 181,650 369,080 352,785
Operating Income 5,032 10,054 53,344 71,033 92,559 132,203
Other Income 447 176 (164) 508 2,491 2,076
Interest Charges 12,678 10,931 25,544 20,929 48,520 41,960
Income (Loss)
Before Income Taxes (7,199) (701) 27,636 50,612 46,530 92,319
Income Taxes (Benefits) (6,037) (6,758) 1,044 8,196 1,625 16,074
Net Income (Loss) $ (1,162) $ 6,057 $ 26,592 $ 42,416 $ 44,905 $ 76,245
Average Common
Shares Outstanding 34,703 34,506 34,666 34,492 34,601 33,780
Earnings (Loss) Per Share of
Common Stock $(.03) $.18 $.77 $1.23 $1.30 $2.26
Dividends Per Share of
Common Stock $ - $ - $.59 $ .57 $1.17 $1.13
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
Statements of Consolidated Cash Flows
(Thousands)
Three Months Ended Six Months Ended Twelve Months Ended
June 30, June 30, June 30,
1995 1994 1995 1994 1995 1994
<S> <C> <C> <C> <C> <C> <C>
Cash Flows from Operating Activities:
Net income (loss) $ (1,162) $ 6,057 $ 26,592 $ 42,416 $ 44,905 $ 76,245
Adjustments to Reconcile Net Income
to Net Cash Provided by Operating
Activities:
Depreciation and depletion 28,800 22,434 57,425 45,328 105,444 87,770
Deferred income taxes (benefits) (4,581) (4,748) (14,197) (3,924) (15,332) 744
Other - net (307) 275 2,236 3,355 447 2,672
Changes in other assets and liabilities:
Accounts receivable
and unbilled revenues 19,900 67,279 (261) 4,466 (4,004) (34,494)
Gas stored underground (3,865) (6,134) 7,547 10,514 (9) 21,276
Material and supplies (1,740) (2,330) 1,034 (2,568) 2,987 (4,799)
Deferred purchased gas cost 834 (5,563) 26,529 2,368 16,419 (17,966)
Prepaid expenses and other (2,802) 4,562 (5,459) 339 (15,390) (5,685)
Regulatory assets (1,449) (1,333) (1,428) (2,587) (204) (18,750)
Accounts payable 2,429 (28,015) (7,968) (6,796) (21,586) (231)
Accrued taxes (1,852) (15,153) (5,536) 2,050 (3,356) 1,850
Refunds due customers (3,840) 2,055 (1,048) 3,964 3,037 8,864
Customer credit balances 816 1,321 (8,382) (6,239) 706 205
Other - net (6,983) 5,812 8,559 8,327 5,701 2,684
Total adjustments 25,360 40,462 59,051 58,597 74,860 44,140
Net cash provided by
operating activities 24,198 46,519 85,643 101,013 119,765 120,385
Cash Flows from Investing Activities:
Capital expenditures (24,266) (35,970) (54,990) (60,506) (140,658) (155,355)
Proceeds from sale of property 106 284 753 515 1,433 1,042
Net cash used in
investing activities (24,160) (35,686) (54,237) (59,991) (139,225) (154,313)
Cash Flows from Financing Activities:
Issuance of common stock 544 395 1,202 874 2,119 113,053
Purchase of treasury stock (5) - (74) - (469) (10)
Dividends paid (10,238) (9,835) (20,462) (19,662) (40,486) (37,974)
Proceeds from issuance 17,878 - 17,878 43,185 17,776 43,112
of long-term debt
Repayments and retirements - - - (1,971) - (1,971)
of long-term debt
Increase (decrease) in (16,785) 2,700 (45,226) (66,000) 36,174 (96,600)
short-term loans
Net cash provided (used) by
financing activities (8,606) (6,740) (46,682) (43,574) 15,114 19,610
Increase (decrease) in cash and
cash equivalents (8,568) 4,093 (15,276) (2,552) (4,346) (14,318)
Cash and cash equivalents at
beginning of period 16,707 8,392 23,415 15,037 12,485 26,803
Cash and cash equivalents at
end of period $ 8,139 $ 12,485 $ 8,139 $ 12,485 $ 8,139 $ 12,485
Cash paid during the period for:
Interest (net of amount capitalized) $15,960 $ 6,097 $29,378 $ 18,693 $51,600 $ 37,886
Income taxes $ 8,006 $ 8,792 $ 7,541 $ 6,511 $14,128 $ 19,469
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Thousands)
June 30, December 31,
1995 1994 1994
ASSETS
<S> <C> <C> <C>
Property, Plant and Equipment:
Exploration and production
(successful efforts method) $1,010,688 $ 940,296 $ 983,328
Natural gas marketing 315,461 300,486 309,579
Natural gas distribution 568,316 534,558 552,789
Natural gas transmission 390,497 384,460 387,921
Total 2,284,962 2,159,800 2,233,617
Less accumulated depreciation
and depletion 694,479 601,153 637,951
Net property, plant
and equipment 1,590,483 1,558,647 1,595,666
Current Assets:
Cash and cash equivalents 8,139 12,485 23,415
Accounts receivable (less accumulated
provision for doubtful accounts:
June 30, 1995 $12,708; 1994 $13,079;
December 31, 1994, $10,890) 194,069 189,802 172,178
Unbilled revenues 2,346 2,238 25,794
Gas stored underground
- current inventory 7,554 7,545 15,101
Material and supplies 11,842 14,829 12,876
Deferred purchased gas cost (1,639) 14,780 24,890
Deferred income taxes 9,569 2,210 (4,444)
Prepaid expenses and other 39,028 23,638 33,569
Total current assets 270,908 267,527 303,379
Other Assets:
Regulatory assets 89,815 89,611 88,387
Other 30,844 26,664 27,246
Total other assets 120,659 116,275 115,633
Total $1,982,050 $1,942,449 $2,014,678
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Thousands)
June 30, 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 June 30, 1995,
35,352; June 30, 1994, 35,139; December 31,
1994, 35,173 $ 227,670 $ 224,004 $ 224,963
Retained earnings 547,606 543,187 541,476
Treasury stock, shares at cost June 30, 1995,
635; June 30, 1994, 618; December 31, 1994,
632 (15,007) (14,538) (14,933)
Foreign currency translation (1,200) (1,278) (1,504)
Total common stockholders' equity 759,069 751,375 750,002
Long-term debt 415,195 422,425 398,282
Total capitalization 1,174,264 1,173,800 1,148,284
Current Liabilities:
Long-term debt payable within one year 24,500 - 24,500
Short-term loans 224,074 187,900 269,300
Accounts payable 115,426 137,012 123,394
Accrued taxes 14,052 17,408 19,588
Accrued interest 7,395 12,988 13,032
Refunds due customers 21,207 18,170 22,255
Customer credit balances 2,045 1,339 10,427
Other 10,161 11,763 11,955
Total current liabilities 418,860 386,580 494,451
Deferred and Other Credits:
Deferred income taxes 339,854 334,527 326,597
Deferred investment tax credits 21,542 22,635 22,082
Other 27,530 24,907 23,264
Total deferred and other credits 388,926 382,069 371,943
Total $1,982,050 $1,942,449 $2,014,678
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
Long-Term Debt
(Thousands)
Annual Maturities
Debt Maturities After One Year
June 30, June 30,
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) 70,884 70,066
9 1/2% Convertible subordinated
debentures, due January 15, 2006 811 2,359
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
6.8% to 7.6% Series C, due 2007 thru 2018 18,000
Total $24,500 $ $415,195 $422,425
<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 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 June 30, 1995 and 1994 and the
results of operations for the three, six and twelve months then ended
and cash flows for the three, six and twelve months then ended. All of
the adjustments are of a normal recurring nature.
C. The results of operations for the three- and six-month periods ended
June 30, 1995 and 1994 are not indicative of results for a full year
because of the seasonal nature of the Company's operations.
D. At June 30, 1995, 2,688,000 shares of Common Stock were reserved as
follows: 74,000 shares for conversion of the 9 1/2% Convertible
Subordinated Debentures, 644,000 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 168,000 shares for
issuance under the Company's Dividend Reinvestment and Stock Purchase
Plan.
E. The Company filed a shelf registration with the Securities and Exchange
Commission effective June 4, 1994 to issue $100 million of Medium-Term
Notes--Series C to be used to retire short-term loans. As of June 30,
1995, $18 million of Medium-Term Notes-- Series C have been issued.
<PAGE>
<TABLE>
<CAPTION>
Three Months Ended June 30, 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 17,564 33 560 18,157
Purchased:
Other producers 122,209 13,417 1,448 137,074
Inter-segment purchases 768 12,921 1,894 (15,583)
Total purchases 768 135,130 15,311 1,448 (15,583) 137,074
Total produced
and purchased 18,332 135,130 15,344 2,008 (15,583) 155,231
Deduct:
Net increase (decrease)
in gas in storage 2,224 171 2,395
Extracted natural gas liquids
(equivalent gas volumes) 485 1,650 2,135
System use and unaccounted for 145 422 2,279 (121) 2,725
Total 17,702 133,058 10,841 1,958 (15,583) 147,976
Gas Sales (MMcf):
Residential 4,070 4,070
Commercial 581 581
Industrial and Utility 6,190 6,190
Production 17,564 (80) 17,484
Marketing 138 133,058 1,958 (15,503) 119,651
Total 17,702 133,058 10,841 1,958 (15,583) 147,976
Natural Gas Transported (MMcf) 30,929 3,126 27,765 (22,206) 39,614
Oil Produced and Sold 500
(thousands of bls) 500
Natural Gas Liquids Sold
(thousands of gallons) 16,087 49,791 65,878
Average Selling Price:
Residential Gas Sales (per Mcf) $9.657
Commercial Gas Sales 9.246
Industrial and Utility Gas Sales 1.927 N/A
Produced Natural Gas $1.482
Marketed Natural Gas 2.283 $1.584 $1.936
Oil (per barrel) 17.270
Natural Gas Liquids (per gallon) .328 .277
</TABLE>
PAGE
<PAGE>
<TABLE>
<CAPTION>
Three Months Ended June 30, 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 14,151 47 467 14,665
Purchased:
Other producers 97,278 8,283 1,377 106,938
Inter-segment purchases 625 9,335 2,340 103 (12,403)
Total purchases 625 106,613 10,623 1,480 (12,403) 106,938
Total produced
and purchased 14,776 106,613 10,670 1,947 (12,403) 121,603
Deduct:
Net increase (decrease)
in gas in storage 2,822 2,822
Extracted natural gas liquids
(equivalent gas volumes) 363 1,842 2,205
System use and unaccounted for 125 408 116 (69) 580
Total 14,288 104,363 7,732 2,016 (12,403) 115,996
Gas Sales (MMcf):
Residential 4,310 4,310
Commercial 1,733 1,733
Industrial and Utility 1,689 97 (92) 1,694
Production 14,151 (2,012) 12,139
Marketing 137 104,363 1,919 (10,299) 96,120
Total 14,288 104,363 7,732 2,016 (12,403) 115,996
Natural Gas Transported (MMcf) 26,248 1,786 28,806 (21,726) 35,114
Oil Produced and Sold
(thousands of bls) 477 477
Natural Gas Liquids Sold
(thousands of gallons) 12,869 51,509 64,378
Average Selling Price:
Residential Gas Sales (per Mcf) $9.314
Commercial Gas Sales 6.298
Industrial and Utility Gas Sales 3.026 $3.814
Produced Natural Gas $2.006
Marketed Natural Gas 1.876 $2.016 2.326
Oil (per barrel) 14.432
Natural Gas Liquids (per gallon) .280 .253
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Six Months Ended June 30, 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 34,826 62 1,092 35,980
Purchased:
Other producers 235,690 25,311 3,019 264,020
Inter-segment purchases 1,726 23,665 6,924 (32,315)
Total purchases 1,726 259,355 32,235 3,019 (32,315) 264,020
Total produced
and purchased 36,552 259,355 32,297 4,111 (32,315) 300,000
Deduct:
Net increase (decrease)
in gas in storage (2,893) (2,893)
Extracted natural gas liquids
(equivalent gas volumes) 952 3,243 4,195
System use and unaccounted for 276 829 6,489 104 7,698
Total 35,324 255,283 28,701 4,007 (32,315) 291,000
Gas Sales (MMcf):
Residential 17,484 17,484
Commercial 2,359 2,359
Industrial and Utility 8,858 1 8,859
Production 34,826 (308) 34,518
Marketing 498 255,283 4,006 (32,007) 227,780
Total 35,324 255,283 28,701 4,007 (32,315) 291,000
Natural Gas Transported (MMcf) 57,522 9,435 58,194 (49,926) 75,225
Oil Produced and Sold
(thousands of bls) 1,011 1,011
Natural Gas Liquids Sold
(thousands of gallons) 31,134 98,024 129,158
Average Selling Price:
Residential Gas Sales
(per Mcf) $9.272
Commercial Gas Sales 9.413
Industrial and Utility Gas Sales 1.914 N/A
Produced Natural Gas $ 1.546
Marketed Natural Gas 1.606 $1.593 $2.006
Oil (per barrel) 16.758
Natural Gas Liquids (per gallon) .338 .272
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Six Months Ended June 30, 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 29,434 62 875 30,371
Purchased:
Other producers 177,912 20,876 4,067 202,855
Inter-segment purchases 1,144 22,790 7,068 410 (31,412)
Total purchases 1,144 200,702 27,944 4,477 (31,412) 202,855
Total produced
and purchased 30,578 200,702 28,006 5,352 (31,412) 233,226
Deduct:
Net increase (decrease)
in gas in storage (3,139) (3,139)
Extracted natural gas liquids
(equivalent gas volumes) 589 3,109 3,698
System use and unaccounted for 211 788 1,389 66 2,454
Total 29,778 196,805 29,756 5,286 (31,412) 230,213
Gas Sales (MMcf):
Residential 19,767 19,767
Commercial 6,916 6,916
Industrial and Utility 3,073 386 (365) 3,094
Production 29,434 (3,690) 25,744
Marketing 344 196,805 4,900 (27,357) 174,692
Total 29,778 196,805 29,756 5,286 (31,412) 230,213
Natural Gas Transported (MMcf) 47,979 4,908 64,137 (56,515) 60,509
Oil Produced and Sold
(thousands of bls) 987 987
Natural Gas Liquids Sold
(thousands of gallons) 21,311 94,963 116,274
Average Selling Price:
Residential Gas Sales (per Mcf) $8.594
Commercial Gas Sales 6.639
Industrial and Utility Gas Sales 3.589 $4.438
Produced Natural Gas $2.272
Marketed Natural Gas 1.881 $2.194 2.625
Oil (per barrel) 13.263
Natural Gas Liquids (per gallon) .277 .250
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Twelve Months Ended June 30, 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 67,899 143 2,088 70,130
Purchased:
Other producers 447,488 50,067 6,215 503,770
Inter-segment purchases 3,105 48,795 12,819 62 (64,781)
Total purchases 3,105 496,283 62,886 6,277 (64,781) 503,770
Total produced
and purchased 71,004 496,283 63,029 8,365 (64,781) 573,900
Deduct:
Net increase (decrease)
in gas in storage 487 (181) 306
Extracted natural gas liquids
(equivalent gas volumes) 1,909 6,511 8,420
System use and unaccounted for 545 1,643 11,491 306 13,985
Total 68,550 488,129 51,051 8,240 (64,781) 551,189
Gas Sales (MMcf):
Residential 27,287 27,287
Commercial 5,124 5,124
Industrial and Utility 18,640 3 (3,211) 15,432
Production 67,899 (3,855) 64,044
Marketing 651 488,129 8,237 (57,715) 439,302
Total 68,550 488,129 51,051 8,240 (64,781) 551,189
Natural Gas Transported (MMcf) 113,269 13,138 117,529 (93,883) 150,053
Oil Produced and Sold
(thousands of bls) 2,010 2,010
Natural Gas Liquids Sold
(thousands of gallons) 60,855 197,554 258,409
Average Selling Price:
Residential Gas Sales (per Mcf) $9.440
Commercial Gas Sales 8.440
Industrial and Utility Gas Sales 2.027 N/A
Produced Natural Gas $ 1.602
Marketed Natural Gas 1.665 $1.649 $1.993
Oil (per barrel) 16.463
Natural Gas Liquids
(per gallon) .326 .273
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Twelve Months Ended June 30, 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 58,058 122 1,822 60,002
Purchased:
Other producers 324,445 37,467 10,243 372,155
Inter-segment purchases 3,295 44,786 13,691 1,103 (62,875)
Total purchases 3,295 369,231 51,158 11,346 (62,875) 372,155
Total produced
and purchased 61,353 369,231 51,280 13,168 (62,875) 432,157
Deduct:
Net increase (decrease)
in gas in storage 2,177 (2,383) (206)
Extracted natural gas liquids
(equivalent gas volumes) 2,610 6,271 8,881
System use and unaccounted for 211 1,589 3,615 336 5,751
Total 58,532 361,371 45,488 15,215 (62,875) 417,731
Gas Sales (MMcf):
Residential 31,336 31,336
Commercial 10,173 10,173
Industrial and Utility 3,979 6,289 (5,793) 4,475
Production 58,058 (3,696) 54,362
Marketing 474 361,371 8,952 (53,412) 317,385
Total Gas Sales 58,532 361,371 45,488 15,241 (62,901) 417,731
Processed Gas Extracted (26) 26
Total 58,532 361,371 45,488 15,215 (62,875) 417,731
Natural Gas
Transported (MMcf) 98,638 9,148 117,403 (93,820) 131,369
Oil Produced and Sold
(thousands of bls) 2,032 2,032
Natural Gas Liquids Sold
(thousands of gallons) 52,140 196,181 248,321
Average Selling Price:
Residential Gas Sales
(per Mcf) $8.686
Commercial Gas Sales 6.839
Industrial and Utility Gas Sales 3.766 $4.430
Produced Natural Gas $ 2.227
Marketed Natural Gas 1.873 $2.210 2.576
Oil (per barrel) 14.169
Natural Gas Liquids (per gallon) .292 .262
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
Information by Business Segment
(Thousands)
Three Months Ended Six Months Ended Twelve Months Ended
June 30, June 30, June 30,
1995 1994 1995 1994 1995 1994
(Thousands)
<S> <C> <C> <C> <C> <C> <C>
Operating Revenues:
Exploration and production $ 44,099 $ 43,402 $ 90,443 $ 95,538 $ 190,700 $ 202,390
Natural gas marketing 227,236 225,897 438,241 459,823 869,196 860,761
Natural gas distribution 63,656 59,801 225,937 239,474 376,938 377,558
Natural gas transmission 24,985 25,874 56,630 62,352 111,047 140,804
Sales between segments (43,442) (38,852) (90,026) (101,527) (185,036) (208,660)
Total $316,534 $316,122 $721,225 $755,660 $1,362,845 $1,372,853
Operating Income (Loss):
Exploration and production $ (2,611) $ 4,209 $ (880) $ 15,563 $ 14,400 $ 37,923
Natural gas marketing 1,732 240 3,979 1,697 6,371 10,684
Natural gas distribution 234 (273) 33,021 36,489 39,712 45,564
Natural gas transmission 5,677 5,878 17,224 17,284 32,076 38,032
Total $ 5,032 $ 10,054 $ 53,344 $ 71,033 $ 92,559 $ 132,203
Capital Expenditures:
Exploration and production $ 14,022 $ 23,804 $ 30,406 $ 37,588 $ 77,278 $ 105,218
Natural gas marketing 2,573 1,507 5,900 2,612 19,053 6,182
Natural gas distribution 6,185 7,614 15,707 13,589 34,830 27,944
Natural gas transmission 1,486 3,045 2,977 6,717 9,497 16,011
Total $ 24,266 $ 35,970 $ 54,990 $ 60,506 $ 140,658 $ 155,355
</TABLE>
<PAGE>
Management's Discussion and Analysis of Financial Condition and Results of
Operations
OVERVIEW
Consolidated net loss for the quarter ended June 30, 1995 was $1.2
million or $.03 per share, compared with income of $6.1 million or $.18 per
share for the quarter ended June 30, 1994. The decrease in income is due
to a 26 percent decline in average wellhead gas prices, higher interest
expense and increased depreciation and depletion expense which were
partially offset by higher production of natural gas and oil, improved
operating results from intrastate pipeline operations and higher oil
prices.
Consolidated net income for the six months ended June 30, 1995 was
$26.6 million or $.77 per share, compared with $42.4 million or $1.23 per
share for the six months ended June 30, 1994. The decrease in income is
due to a 32 percent decline in average wellhead gas prices and lower retail
gas sales reflecting warmer weather, partially offset by an 18 percent
increase in natural gas production.
Consolidated net income for the twelve months ended June 30, 1995 was
$44.9 million or $1.30 per share, compared with $76.2 million or $2.26 per
share for the twelve months ended June 30, 1994. The decrease in income is
due primarily to a 28 percent decline in average wellhead gas prices, lower
margins from natural gas marketing, and lower retail utility gas sales
reflecting 13 percent warmer weather. The impact of these items was
partially offset by a 17 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, of $44.1 million for the quarter ended June 30, 1995 were
substantially the same as the $43.4 million for the quarter ended June 30,
1994. Increased production of natural gas, oil and natural gas liquids,
and higher oil prices were offset by a 26 percent decline in average
wellhead gas prices. Operating revenues for the six months ended June 30,
1995 were $90.4 million compared with $95.5 million for the six months
ended June 30, 1994. Operating revenues for the twelve months ended June
30, 1995 were $190.7 million compared with $202.4 million for the twelve
months ended June 30, 1994. The decrease in revenues for the six-month and
twelve-month periods is due primarily to lower wellhead prices for natural
gas which were partially offset by increased production of natural gas,
higher oil prices and increased production and prices for natural gas
liquids.
<PAGE>
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended Twelve Months Ended
June 30, June 30, June 30,
Exploration and Production 1995 1994 1995 1994 1995 1994
<S> <C> <C> <C> <C> <C> <C>
Operating Revenues (thousands):
Natural Gas $26,024 $28,381 $53,852 $66,887 $108,775 $129,306
Oil 8,635 6,884 16,942 13,091 33,090 28,791
Natural Gas Liquids 5,278 3,607 10,530 5,906 19,868 15,220
Contract Drilling 2,857 3,062 5,703 6,536 14,594 15,160
Direct Billing Settlements - - - - 7,815 7,815
Other 1,305 1,468 3,416 3,118 6,558 6,098
Total Revenues $44,099 $43,402 $90,443 $95,538 $190,700 $202,390
Sales Quantities:
Natural Gas (MMcf) 17,564 14,151 34,826 29,434 67,899 58,058
Oil (MBls) 500 477 1,011 987 2,010 2,032
Natural Gas Liquids
(thousands of gallons) 16,087 12,869 31,134 21,311 60,855 52,140
</TABLE>
<PAGE>
Management's Discussion and Analysis of Financial Condition and Results of
Operations (Continued)
Gas purchased of $2.6 million for the quarter ended June 30, 1995 and
$5.4 million for the six months ended June 30, 1995 was substantially the
same as the 1994 amounts of $2.9 million and $5.6 million, respectively.
Gas purchased for the twelve months ended June 30, 1995 amounted to $10.3
million compared with $13.9 million for the twelve months ended June 30,
1994. The decrease in gas purchased for the twelve month period is due to
lower prices offset by higher requirements reflecting increased production
of natural gas liquids.
Other operating expenses were $44.1 million for the quarter ended June
30, 1995 compared with $36.3 million for the quarter ended June 30, 1994.
Other operating expenses for the six months ended June 30, 1995 were $85.9
million compared with $74.3 million for the six months ended June 30, 1994.
Other operating expenses for the twelve months ended June 30, 1995 were
$166.0 million compared with $150.6 million for the twelve months ended
June 30, 1994. Increases for the current periods are attributed to
increased depreciation and depletion related to the higher level of natural
gas production and higher depletion rates.
Operating results for the quarter ended June 30, 1995 were a loss of
$2.6 million compared with income of $4.2 million for the quarter ended
June 30, 1994. Operating results for the six months ended June 30, 1995
were a loss of $.9 million compared with income of $15.6 million for the
six months ended June 30, 1994. Operating income for the twelve months
ended June 30, 1995 was $14.4 million compared with $37.9 million for the
twelve months ended June 30, 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 six months of 1995. Prices for oil and natural gas liquids rebounded
during the first six months 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 5 to 10 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 $227.2 million for the
quarter ended June 30, 1995 compared with $225.9 million for the quarter
ended June 30, 1994. The increase in revenues is due to a 27 percent
increase in marketed gas volumes substantially offset by a 21 percent
decrease in the average price of marketed gas. Operating revenues for the
six months ended June 30, 1995 were $438.2 million compared with $459.8
million for the six months ended June 30, 1994. The decrease in revenues
is due to a 27 percent decline in the average price of marketed gas which
was partially offset by a 30 percent increase in marketed gas volumes and
higher production and prices for natural gas liquids. Operating revenues
for the twelve months ended June 30, 1995 were $869.2 million compared with
$860.8 million for the twelve months ended June 30, 1994. A 35 percent
increase in marketed gas sales and higher prices for natural gas liquids
were partially offset by a 25 percent decline in the average price of
marketed natural gas.
<PAGE>
Management's Discussion and Analysis of Financial Condition and
Results of Operations (Continued)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended Twelve Months Ended
June 30, June 30, June 30,
Natural Gas Marketing 1995 1994 1995 1994 1995 1994
<S> <C> <C> <C> <C> <C> <C>
Operating Revenues
(thousands):
Natural Gas Marketing $210,787 $210,442 $406,542 $431,697 $804,927 $798,700
Natural Gas Liquids 13,806 13,035 26,690 23,776 54,027 51,352
Transportation 2,417 2,357 4,710 4,244 9,732 10,491
Other 226 63 299 106 510 218
Total Revenues $227,236 $225,897 $438,241 $459,823 $869,196 $860,761
Sales Quantities:
Marketed Natural
Gas (MMcf) 133,058 104,363 255,283 196,805 488,129 361,371
Natural Gas Liquids
(thousands of gallons) 49,791 51,509 98,024 94,963 197,554 196,181
</TABLE>
<PAGE>
Management's Discussion and Analysis of Financial Condition and Results of
Operations (Continued)
Gas purchased of $218.1 million for the quarter ended June 30, 1995 was
substantially the same as the $218.5 million for the quarter ended June 30,
1994. An increase in purchase volumes was offset by lower prices. Gas
purchased for the six months ended June 30, 1995 amounted to $419.3 million
compared with $443.9 million for the six months ended June 30, 1994. The
decrease reflects lower prices for purchased gas partially offset by higher
volume of marketed gas and higher requirements for liquids production. Gas
purchased for the twelve months ended June 30, 1995 was $832.8 million
compared with $825.9 million for the twelve months ended June 30, 1994. The
increase reflects the higher volume of marketed natural gas partially offset
by lower prices for purchased gas.
Other operating expenses of $7.4 million for the quarter ended June 30,
1995 and $14.9 million for the six months ended June 30, 1995 were
substantially the same as the 1994 amounts of $7.2 million and $14.2 million,
respectively. Other operating expenses for the twelve months ended June 30,
1995 were $30.0 million compared with $24.2 million for the twelve months
ended June 30, 1994.
Operating income was $1.7 million for the quarter ended June 30, 1995
compared with $.2 million for the quarter ended June 30, 1994. Operating
income for the six months ended June 30, 1995 was $4.0 million compared with
$1.7 million for the six months ended June 30, 1994. The increase in
operating income for the three-month and six-month periods reflects higher
margins for liquids processing. Operating income for the twelve months ended
June 30, 1995 was $6.4 million compared with $10.7 million for the twelve
months ended June 30, 1994. The decrease for the twelve months is due to
lower margins for marketed gas sales.
<PAGE>
Management's Discussion and Analysis of Financial Condition and Results of
Operations (Continued)
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
$63.6 million for the quarter ended June 30, 1995 compared with $59.8
million for the quarter ended June 30, 1994. The increase in revenues is
due primarily to increased industrial and utility gas sales partially
offset by the effect of commercial customers moving from gas sales to
transportation service. Operating revenues for the six months ended June
30, 1995 were $225.9 million compared with $239.5 million for the six
months ended June 30, 1994. The decrease in revenues is due to lower
retail gas sales reflecting warmer weather and the effect of commercial
customers moving from gas sales to transportation service. Operating
revenues for the twelve months ended June 30, 1995 were $376.9 million
compared with $377.6 million for the twelve months ended June 30, 1994.
Increased sales to utilities and higher transportation revenues were offset
by lower retail gas sales reflecting 13 percent warmer weather and the
effect of commercial customers moving from gas sales to transportation
service.
<PAGE>
Management's Discussion and Analysis of Financial Condition
and Results of Operations (Continued)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended Twelve Months Ended
June 30, June 30, June 30,
Natural Gas Distribution 1995 1994 1995 1994 1995 1994
<S> <C> <C> <C> <C> <C> <C>
Operating Revenues (thousands):
Residential Gas Sales $39,303 $40,145 $162,110 $169,875 $257,591 $272,182
Commercial Gas Sales 5,372 10,915 22,206 45,916 43,246 69,575
Industrial and Utility
Gas Sales 11,929 5,111 16,954 11,028 37,779 14,984
Transportation Service 5,660 2,468 21,952 10,182 33,520 16,366
Other 1,392 1,162 2,715 2,473 4,802 4,451
Total Revenues $63,656 $59,801 $225,937 $239,474 $376,938 $377,558
Sales Quantities (MMcf):
Residential Gas Sales 4,070 4,310 17,484 19,767 27,287 31,336
Commercial Gas Sales 581 1,733 2,359 6,916 5,124 10,173
Industrial and Utility
Gas Sales 6,190 1,689 8,858 3,073 18,640 3,979
Transportation Deliveries 3,126 1,786 9,435 4,908 13,138 9,148
Heating Degree Days 655 644 3,451 3,826 5,232 6,033
</TABLE>
<PAGE>
Management's Discussion and Analysis of Financial Condition and Results of
Operations (Continued)
Gas purchased amounted to $38.0 million for the quarter ended June 30,
1995 compared with $33.4 million for the quarter ended June 30, 1994. The
increase in gas costs is due primarily to higher industrial and utility gas
sales and the pass-through of higher costs in rates to retail customers.
Gas purchased for the six months ended June 30, 1995 amounted to $134.7
million compared with $141.1 million for the six months ended June 30,
1994. The decrease in gas costs is due to lower retail gas sales partially
offset by increased industrial and utility gas sales and the pass-through
of higher costs in rates to retail customers. Gas purchased for the twelve
months ended June 30, 1995 was $226.5 million compared with $217.7 million
for the twelve months ended June 30, 1994. The increase in gas costs
reflects the pass-through of higher costs in rates to retail customers and
the increase in sales to industrial and utility customers partially offset
by lower retail gas sales.
Other operating expenses were $25.4 million for the quarter ended June
30, 1995 compared with $26.7 million for the quarter ended June 30, 1994.
Other operating expenses were $58.2 million for the six months ended June
30, 1995 compared with $61.9 million for the six months ended June 30,
1994. Other operating expenses were $110.7 million for the twelve months
ended June 30, 1995 compared with $114.3 million for the twelve months
ended June 30, 1994. The decrease in operating expenses for the six-month
and twelve-month periods is due primarily to lower gross receipts
tax reflecting the decrease in retail revenues.
Operating income was $.2 million for the quarter ended June 30, 1995
compared with a loss of $.3 million for the quarter ended June 30, 1994.
The increase in operating income is due primarily to higher industrial and
utility gas sales and lower operating expenses. Operating income was $33.0
million for the six months ended June 30, 1995 compared with $36.5 million
for the six months ended June 30, 1994. Operating income for the twelve
months ended June 30, 1995 was $39.7 million compared with $45.6 million
for the twelve months ended June 30, 1994. The decrease in operating
income for the six and twelve month periods is due primarily to lower
retail gas sales reflecting warmer weather.
<PAGE>
Management's Discussion and Analysis of Financial Condition and Results of
Operations (Continued)
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 $25.0 million for the quarter ended
June 30, 1995 compared with $25.9 million for the quarter ended June 30,
1994. Operating revenues for the six months ended June 30, 1995 amounted
to $56.6 million compared with $62.4 million for the six months ended June
30, 1994. The decrease in revenues for the three-month and six-month
periods is due to lower selling prices for marketed natural gas. Operating
revenues for the twelve months ended June 30, 1995 were $111.0 million
compared with $140.8 million for the twelve months ended June 30, 1994.
The decrease in revenues reflects the effects of discontinuing merchant
sales of gas as a result of FERC Order 636 restructuring and lower selling
prices for marketed natural gas.
<PAGE>
Management's Discussion and Analysis of Financial Condition and
Results of Operations (Continued)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended Twelve Months Ended
June 30, June 30, June 30,
Natural Gas Transmission 1995 1994 1995 1994 1995 1994
<S> <C> <C> <C> <C> <C> <C>
Operating Revenues (thousands):
Industrial and Utility
Gas Sales $ 363 $ 370 $ 726 $ 1,713 $ 1,322 $ 27,862
Marketed Gas Sales 3,791 4,463 8,036 12,864 16,416 23,064
Transportation Service 14,950 15,022 35,799 36,370 69,387 68,831
Storage Service 4,352 4,361 8,743 8,294 17,442 14,867
Other 1,529 1,658 3,326 3,111 6,480 6,180
Total Revenues $24,985 $25,874 $56,630 $62,352 $111,047 $140,804
Sales Quantities (MMcf):
Industrial and Utility
Gas Sales - 97 1 386 3 6,289
Marketed Gas Sales 1,958 1,919 4,006 4,900 8,237 8,952
Transportation Deliveries 27,765 28,806 58,194 64,137 117,529 117,403
</TABLE>
<PAGE>
Management's Discussion and Analysis of Financial Condition and Results of
Operations (Continued)
Gas purchased amounted to $2.8 million for the quarter ended June 30,
1995 compared with $4.2 million for the quarter ended June 30, 1994. Gas
purchased for the six months ended June 30, 1995 amounted to $6.1 million
compared with $11.6 million for the six months ended June 30, 1994. The
decrease in gas costs for the three-month and six-month periods is due to
lower prices for gas purchased for marketing. Gas purchased for the twelve
months ended June 30, 1995 was $12.6 million compared with $34.8 million
for the twelve months ended June 30, 1994. The decrease in gas costs
reflects the elimination of pipeline gas sales pursuant to FERC Order 636
restructuring and lower prices for gas purchased for marketing.
Other operating expenses of $16.6 million for the quarter ended June
30, 1995, $33.4 million for the six months ended June 30, 1995 and $66.4
million for the twelve months ended June 30, 1995 were substantially the
same as the 1994 amounts of $15.8 million, $33.4 million and $67.9 million,
respectively.
Operating income of $5.7 million for the quarter ended June 30, 1995
and $17.1 million for the six months ended June 30, 1995 were substantially
the same as the 1994 amounts of $5.9 million and $17.3 million,
respectively. Operating income for the twelve months ended June 30, 1995
amounted to $32.0 million compared with $38.1 million for the twelve months
ended June 30,1994. The decrease in income is due to income generated in
the 1994 period as a result of FERC Order 636 restructuring.
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 six months ended June 30, 1995
were $55.0 million.
<PAGE>
Management's Discussion and Analysis of Financial Condition and Results of
Operations (Continued)
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.
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 June 30,
1995, $223.0 million of commercial paper and $1.1 million of bank loans
were outstanding at an average interest rate of 6.0 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 by the bankruptcy court, 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.
In June 1995, the Company offered for sale all of its gas and oil
properties in the Northern Appalachian Basin areas of New York,
Pennsylvania and West Virginia. The properties comprise less than 4
percent of the exploration and production segment's total gas and oil
production and reserves. The Company operates the majority of these
properties, with its working interest averaging approximately 25 percent.
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 June 30, 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/ Dan C. Eaton
-------------------------------------
Dan C. Eaton
Vice President -
Strategic & Financial Planning
Date: August 11, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 8,139
<SECURITIES> 0
<RECEIVABLES> 196,415
<ALLOWANCES> 12,708
<INVENTORY> 19,396
<CURRENT-ASSETS> 270,908
<PP&E> 2,284,962
<DEPRECIATION> 694,479
<TOTAL-ASSETS> 1,982,050
<CURRENT-LIABILITIES> 418,860
<BONDS> 415,195
<COMMON> 212,663
0
0
<OTHER-SE> 546,406
<TOTAL-LIABILITY-AND-EQUITY> 1,982,050
<SALES> 316,534
<TOTAL-REVENUES> 316,534
<CGS> 0
<TOTAL-COSTS> 311,502
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 1,469
<INTEREST-EXPENSE> 12,678
<INCOME-PRETAX> (7,199)
<INCOME-TAX> (6,037)
<INCOME-CONTINUING> (1,162)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,162)
<EPS-PRIMARY> (.03)
<EPS-DILUTED> (.03)
</TABLE>
