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, 1996
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, 1996
Common stock, no par value 35,101,171 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, 1996 and 1995,
and the Twelve Months Ended March 31,
1996 and 1995 1
Statements of Consolidated Cash Flows
for the Three Months Ended March 31, 1996
and 1995, and the Twelve Months Ended
March 31, 1996 and 1995 2
Consolidated Balance Sheets, March 31, 1996
and 1995 and December 31, 1995 3 - 4
Long-Term Debt, March 31, 1996 and 1995 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 - 18
PART II. OTHER INFORMATION 19
SIGNATURE 20
<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,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Operating Revenues................. $ 640,278 $ 404,691 $ 1,661,577 $ 1,362,433
Cost of Energy Purchased........... 475,471 258,557 1,128,272 903,816
----------- ----------- ----------- -----------
Net operating revenues.......... 164,807 146,134 533,305 458,617
----------- ----------- ----------- -----------
Operating Expenses:
Operation....................... 52,661 48,314 202,848 190,225
Maintenance..................... 5,908 6,978 25,565 31,587
Depreciation and depletion...... 21,582 28,625 97,582 99,078
Impairment of assets............ - - 121,081 -
Taxes other than income......... 15,253 13,905 43,186 40,146
----------- ----------- ----------- -----------
Total operating expenses...... 95,404 97,822 490,262 361,036
----------- ----------- ----------- -----------
Operating Income................... 69,403 48,312 43,043 97,581
Other Income........................ 2,169 (611) 3,167 2,220
Interest Charges................... 10,474 12,866 47,706 46,773
----------- ----------- ----------- -----------
Income (Loss) Before Income Taxes.. 61,098 34,835 (1,496) 53,028
Income Taxes (Benefits)............ 22,372 7,081 (14,015) 904
----------- ----------- ----------- -----------
Net Income......................... $ 38,726 $ 27,754 $ 12,519 $ 52,124
=========== =========== =========== ===========
Average Common
Shares Outstanding.............. 35,035 34,635 34,892 34,554
=========== =========== =========== ===========
Earnings Per Share of
Common Stock.................... $ 1.11 $ .80 $ .36 $ 1.51
=========== =========== =========== ===========
Dividends Per Share of
Common Stock.................... $ .59 $ .59 $ 1.18 $ 1.17
=========== =========== =========== ===========
</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,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Cash Flows from Operating Activities:
Net income............................... $ 38,726 $ 27,754 $ 12,519 $ 52,124
----------- ------------- ----------- ----------
Adjustments to reconcile net income
to net cash provided by operating
activities:
Impairment of assets.................. - - 121,081 -
Depreciation and depletion............ 21,582 28,625 97,582 99,078
Deferred income taxes (benefits)...... 12,824 (9,616) (51,908) (15,499)
Other - net........................... 2,754 2,543 (556) 1,029
Changes in other assets and liabilities:
Accounts receivable and unbilled revenues (89,321) (20,161) (143,435) 43,375
Gas stored underground.............. 9,758 11,412 3,525 (2,278)
Material and supplies............... 2,068 2,774 (552) 2,397
Deferred purchased gas cost......... (8,583) 25,695 (19,548) 10,022
Prepaid expenses and other.......... (341) (2,657) (6,438) (8,026)
Regulatory assets................... 365 21 2,154 (88)
Accounts payable.................... 68,853 (10,397) 138,041 (52,030)
Accrued taxes....................... 8,347 (3,684) 10,550 (16,657)
Refunds due customers............... 672 2,792 (8,372) 8,932
Customer credit balances............ (8,716) (9,198) (186) 1,211
Deferred revenue.................... (5,426) - 124,448 -
Other - net......................... 14,234 15,542 7,247 18,496
----------- ------------- ----------- ----------
Total adjustments................... 29,070 33,691 273,633 89,962
----------- ------------- ----------- ----------
Net cash provided by operating
activities...................... 67,796 61,445 286,152 142,086
----------- ------------- ----------- ----------
Cash Flows from Investing Activities:
Capital expenditures..................... (18,831) (30,724) (106,219) (152,362)
Proceeds from sale of property........... 425 647 24,388 1,611
----------- ------------- ----------- ----------
Net cash used in investing
activities (18,406) (30,077) (81,831) (150,751)
----------- ------------- ----------- ----------
Cash Flows from Financing Activities:
Issuance of common stock................. 543 658 2,641 1,970
Purchase of treasury stock............... - (69) (171) (464)
Dividends paid........................... (20,702) (10,224) (51,575) (40,083)
Proceeds from issuance of long-term debt. - - 17,836 (102)
Repayments and retirements of long-term debt - - (24,500) -
Increase (decrease) in short-term loans.. (3,654) (28,441) (109,513) 55,659
----------- ------------- ------------ ----------
Net cash provided (used) by
financing activities............ (23,813) (38,076) (165,282) 16,980
----------- ------------- ----------- ----------
Increase (decrease) in cash and
cash equivalents 25,577 (6,708) 39,039 8,315
Cash and cash equivalents at
beginning of period 30,169 23,415 16,707 8,392
----------- ------------- ----------- ----------
Cash and cash equivalents at end of period.. $ 55,746 $ 16,707 $ 55,746 $ 16,707
=========== ============= =========== ==========
Cash paid during the period for:
Interest (net of amount capitalized)..... $ 11,688 $ 13,418 $ 44,629 $ 41,737
=========== ============= =========== ==========
Income taxes............................. $ 606 $ (465) $ 42,343 $ 14,914
=========== ============= =========== ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Thousands)
March 31, December 31,
1996 1995 1995
ASSETS
<S> <C> <C> <C>
Current Assets:
Cash and cash equivalents............................... $ 55,746 $ 16,707 $ 30,169
Accounts receivable (less accumulated
provision for doubtful accounts:
March 31, 1996 $13,075; 1995 $13,224;
December 31, 1995, $10,539)........................... 336,771 199,845 240,846
Unbilled revenues ...................................... 22,612 15,954 31,752
Gas stored underground - current inventory ............. 164 3,689 9,922
Material and supplies .................................. 10,509 10,102 12,577
Deferred purchased gas cost ............................ 18,743 (805) 10,160
Prepaid expenses and other ............................. 42,664 36,226 42,323
------------- ------------ -------------
Total current assets............................... 487,209 281,718 377,749
------------- ------------ -------------
Property, Plant and Equipment:
Exploration and production (successful efforts method).. 875,867 998,625 869,329
Energy marketing........................................ 301,258 312,919 295,061
Natural gas distribution................................ 570,669 561,455 568,272
Natural gas transmission................................ 386,666 389,177 388,986
------------- ------------ -------------
Total property, plant and equipment................ 2,134,460 2,262,176 2,121,648
Less accumulated depreciation and depletion .......... 682,507 666,217 664,065
------------- ------------ -------------
Net property, plant and equipment.................. 1,451,953 1,595,959 1,457,583
------------- ------------ -------------
Other Assets:
Regulatory assets ...................................... 84,876 88,366 85,241
Other................................................... 49,567 26,722 41,235
------------- ------------ -------------
Total other assets ................................... 134,443 115,088 126,476
------------- ------------ -------------
Total.............................................. $ 2,073,605 $ 1,992,765 $ 1,961,808
============= ============ =============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Thousands)
March 31, December 31,
1996 1995 1995
CAPITALIZATION AND LIABILITIES
<S> <C> <C> <C>
Current Liabilities:
Long-term debt payable within one year............. $ - $ 24,500 $ -
Short-term loans................................... 131,346 240,859 135,000
Accounts payable................................... 251,038 112,997 182,185
Accrued taxes...................................... 26,454 15,904 18,107
Accrued interest................................... 12,639 11,421 14,842
Refunds due customers.............................. 16,675 25,047 16,003
Dividends payable.................................. 10,352 10,231 -
Customer credit balances........................... 1,043 1,229 9,759
Other.............................................. 26,520 197 13,383
-------------- -------------- ---------------
Total current liabilities..................... 476,067 442,385 389,279
-------------- -------------- ---------------
Long--Term Debt ....................................... 415,692 397,026 415,527
-------------- -------------- ---------------
Deferred and Other Credits:
Deferred income taxes.............................. 277,377 344,875 265,737
Deferred investment tax credits.................... 20,716 21,816 20,991
Deferred revenue................................... 124,448 - 129,874
Other.............................................. 23,605 27,318 25,321
-------------- -------------- ---------------
Total deferred and other credits.............. 446,146 394,009 441,923
-------------- -------------- ---------------
Capitalization:
Common stockholders' equity:
Common stock, no par value, authorized 80,000
shares; shares issued March
31, 1996, 35,440; March 31, 1995, 35,329;
December 31, 1995, 35,414..................... 224,500 227,086 223,854
Retained earnings ............................... 520,060 548,775 502,036
Treasury stock, shares at cost March 31, 1996,
339; March 31, 1995, 634;
December 31, 1995, 407........................ (7,722) (15,002) (9,673)
Foreign currency translation..................... (1,138) (1,514) (1,138)
-------------- -------------- ---------------
Total common stockholders' equity............. 735,700 759,345 715,079
-------------- -------------- ---------------
Total..................................... $ 2,073,605 $ 1,992,765 $ 1,961,808
============== ============== ===============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
Long-Term Debt
(Thousands)
Annual Maturities
Debt Maturities After One Year
March 31, March 31,
1996 1995 1996 1995
<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) (b).......... 71,540 70,675
9 1/2% Convertible subordinated
debentures, due January 15, 2006.................. 652 851
9.9% Debentures, due April 15, 2013 (c)............... 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 2003 thru 2023......... 24,500 75,500 75,500
6.8% to 7.6% Series C, due 2007 thru 2018......... 18,000
-------- -------- ---------- ----------
Total.......................................... $ - $ 24,500 $ 415,692 $ 397,026
======== ======== ========== ==========
<FN>
(a) 8 1/4% Debentures will be retired with proceeds from issuance of
new long-term debt.
(b) Not redeemable prior to maturity.
(c) Annual sinking fund payments of $3,750,000 are required beginning in 1999.
</FN>
</TABLE>
<PAGE>
Equitable Resources, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
A. The accompanying financial statements should be read in conjunction with
the Company's 1995 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, 1996 and 1995 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, 1996
and 1995 are not indicative of results for a full year because of the
seasonal nature of the Company's operations.
D. At March 31, 1996, 2,591,000 shares of Common Stock were reserved as
follows: 59,000 shares for conversion of the 9 1/2% Convertible
Subordinated Debentures, 601,000 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 129,000 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 in June 1994 to issue $100 million of Medium-Term Notes--Series C
to be used to retire short-term loans. As of March 31, 1996, $18 million of
Medium-Term Notes--Series C have been issued.
F. Effective March 29,1996, the Company acquired all of the outstanding
stock of Conogen, Inc. (Conogen) in exchange for 239,316 shares of the
Company's common stock valued at $7 million and subject to an additional
contingent amount to be paid by January 1998 based upon Conogen's
financial performance. At the time of closing, the Company tendered
68,376 shares of common stock held in treasury with 170,940 shares to be
tendered in July 1996. The effect of this acquisition on the
consolidated financial statements of the Company is not material.
Conogen is a design-builder and performance contractor in self-funded
energy and resource efficiency projects for commercial, industrial and
institutional customers.
<PAGE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31, 1996
Exploration Energy 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 .................................... 16,378 34 539 16,951
------ ------- ------ ------- ------- -------
Purchased:
Other producers........................... 135,184 16,683 2,636 154,503
Inter-segment purchases .................. 591 9,899 5,400 (15,890)
------ ------- ------ ------- ------- -------
Total purchases ....................... 591 145,083 22,083 2,636 (15,890) 154,503
------ ------- ------ ------- ------- -------
Total produced and purchased ........ 16,969 145,083 22,117 3,175 (15,890) 171,454
Deduct:
Net increase (decrease) in gas in storage. (5,299) (5,299)
Extracted natural gas liquids
(equivalent gas volumes) .............. 430 1,305 1,735
System use and unaccounted for............ 108 331 2,678 26 3,143
------ ------- ------ ------- ------- -------
Total................................ 16,431 143,447 24,738 3,149 (15,890) 171,875
====== ======= ====== ======= ======= =======
Gas Sales (MMcf):
Residential.................................. 15,017 15,017
Commercial................................... 6,332 6,332
Industrial and Utility....................... 3,389 (447) 2,942
Production................................... 16,378 (295) 16,083
Marketing.................................... 53 143,447 3,149 (15,148) 131,501
------ ------- ------ ------- ------- -------
Total................................ 16,431 143,447 24,738 3,149 (15,890) 171,875
====== ======= ====== ======= ======= =======
Natural Gas Transported (MMcf).................. 30,277 2,324 34,870 (32,267) 35,204
======= ====== ======== ======= =======
Oil Produced and Sold (thousands of bls)........ 450 450
====== =======
Natural Gas Liquids Sold (thousands of gallons) 12,407 39,072 51,479
====== ======= =======
Average Selling Price:
Residential Gas Sales (per Mcf)............. $8.075
Commercial Gas Sales........................ 6.431
Industrial and Utility Gas Sales............ 3.963
Produced Natural Gas........................ $ 2.342
Marketed Natural Gas........................ 3.415 $2.896 $3.963
Oil (per barrel)............................ 16.927
Natural Gas Liquids (per gallon)............ .354 .321
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31, 1995
Exploration Energy 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>
TWELVE MONTHS ENDED MARCH 31, 1996
Exploration Energy 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..................................... 64,100 145 2,567 66,812
------- -------- ------- ------- -------- --------
Purchased:
Other producers........................... 485,254 46,715 9,101 541,070
Inter-segment purchases................... 2,779 52,711 13,919 - (69,409)
------- -------- ------- ------- -------- --------
Total purchases........................ 2,779 537,965 60,634 9,101 (69,409) 541,070
------- -------- ------- ------- -------- --------
Total produced and purchased......... 66,879 537,965 60,779 11,668 (69,409) 607,882
Deduct:
Net increase (decrease) in gas in storage. (1,577) (105) (1,682)
Extracted natural gas liquids
(equivalent gas volumes)............... 1,834 6,252 8,086
System use and unaccounted for............ 534 1,574 3,499 (474) 5,133
------- -------- ------- ------- -------- --------
Total................................ 64,511 530,139 58,857 12,247 (69,409) 596,345
======= ======== ======= ======= ======== ========
Gas Sales (MMcf):
Residential.................................. 31,097 31,097
Commercial................................... 9,048 9,048
Industrial and Utility....................... 18,712 (1) (10,796) 7,915
Production................................... 64,100 (532) 63,568
Marketing.................................... 411 530,139 12,248 (58,081) 484,717
------- -------- ------- ------- -------- --------
Total................................ 64,511 530,139 58,857 12,247 (69,409) 596,345
======= ======== ======= ======= ======== ========
Natural Gas Transported (MMcf).................. 126,089 12,118 123,531 (102,945) 158,793
======== ======= ======= ======== ========
Oil Produced and Sold (thousands of bls)........ 1,871 1,871
======= ========
Natural Gas Liquids Sold (thousands of gallons) 60,407 188,779 249,186
======= ======== ========
Average Selling Price:
Residential Gas Sales (per Mcf)............. $8.532
Commercial Gas Sales........................ 7.039
Industrial and Utility Gas Sales............ 2.439
Produced Natural Gas........................ $ 1.773
Marketed Natural Gas........................ 2.063 $1.973 $2.494
Oil (per barrel)............................ 16.602
Natural Gas Liquids (per gallon)............ .327 .279
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED MARCH 31, 1995
Exploration Energy 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>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
Information by Business Segment
(Thousands)
Three Months Ended Twelve Months Ended
March 31, March 31,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
OPERATING REVENUES:
Exploration and production.. $ 55,374 $ 46,344 $ 243,895 $ 190,003
Energy marketing............ 431,494 211,005 1,109,792 867,857
Natural gas distribution.... 183,522 162,281 402,291 373,083
Natural gas transmission ... 38,329 31,645 125,545 111,936
Sales between segments ..... (68,441) (46,584) (219,946) (180,446)
--------- ---------- ----------- -----------
Total.................. $ 640,278 $ 404,691 $ 1,661,577 $ 1,362,433
========= ========== =========== ===========
OPERATING INCOME (LOSS):
Exploration and production.. $ 15,565 $ 1,731 $ 11 $ 21,220
Energy marketing ........... 5,549 2,247 (15,543) 4,879
Natural gas distribution.... 35,068 32,787 25,802 39,205
Natural gas transmission ... 13,221 11,547 32,773 32,277
--------- ---------- ----------- -----------
Total.................. $ 69,403 $ 48,312 $ 43,043 $ 97,581
========= ========== =========== ===========
CAPITAL EXPENDITURES:
Exploration and production.. $ 6,330 $ 16,384 $ 34,732 $ 87,060
Energy marketing............ 6,851 3,327 27,688 17,987
Natural gas distribution.... 5,584 9,522 38,257 36,259
Natural gas transmission.... 66 1,491 5,542 11,056
--------- ---------- ----------- -----------
Total.................. $ 18,831 $ 30,724 $ 106,219 $ 152,362
========= ========== =========== ===========
</TABLE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
OVERVIEW
Consolidated net income for the quarter ended March 31, 1996 was $38.7
million or $1.11 per share, compared with $27.8 million or $.80 per share for
the quarter ended March 31, 1995. The increase in income is due to a 45 percent
increase in average wellhead gas prices, increased retail gas sales reflecting
weather that was 11 percent colder than the prior quarter, higher margins for
natural gas marketing and lower depreciation and depletion and interest expense.
These increases were partially offset by lower fuels tax credits as a result of
the sale of certain gas properties in November 1995 and lower production of
natural gas.
Consolidated net income for the twelve months ended March 31, 1996 was
$12.5 million or $.36 per share, compared with $52.1 million or $1.51 per share
for the twelve months ended March 31, 1995. Earnings for the current period
include an after-tax charge of $74.2 million or $2.12 per share recorded in the
fourth quarter of 1995 for the recognition of impairment of assets of $121.2
million, pursuant to the methodology of Statement of Financial Accounting
Standards No. 121 "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of". The results for the current period also
include a non-recurring after-tax gain of $29.1 million or $.83 per share
related to the Columbia Gas Transmission (Columbia) bankruptcy settlement and
$6.6 million or $.19 per share, resulting from regulatory approval for
accelerated recovery of future gas costs recognized in the fourth and third
quarters of 1995, respectively. Net income, excluding the charge for impairment
of assets and the effect of the settlements, remained substantially the same as
the 1995 period. Lower nonconventional fuels tax credits and higher operating
expenses were offset by increased retail gas sales reflecting weather that was
16 percent colder than the prior year and higher margins for natural gas
marketing
RESULTS OF OPERATIONS
EXPLORATION AND PRODUCTION
Operating revenues, which are derived from the sale of produced natural
gas, oil and natural gas liquids and from contract drilling were $55.4 million
for the quarter ended March 31, 1996 compared with $46.3 million for the quarter
ended March 31, 1995. The increase in operating revenues is due to a 45 percent
increase in average wellhead prices for natural gas, partially offset by lower
production of natural gas and natural gas liquids. Operating revenues for the
twelve months ended March 31, 1996 were $244.0 million compared with $190.0
million for the twelve months ended March 31, 1995. The 1996 revenues include
$40.2 million of nonrecurring amounts from the Columbia bankruptcy settlement,
and $11.0 million of additional revenue from direct bill settlements. The
increase in revenues, excluding the nonrecurring amounts, is due primarily to
higher wellhead prices for natural gas and increased production and prices for
natural gas liquids.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (CONTINUED)
THREE MONTHS ENDED TWELVE MONTHS ENDED
MARCH 31, MARCH 31,
EXPLORATION AND PRODUCTION 1996 1995 1996 1995
OPERATING REVENUES (THOUSANDS):
Natural Gas.......... $38,361 $ 27,828 $113,646 $111,132
Oil.................. 7,617 8,307 31,063 31,339
Natural Gas Liquids.. 4,387 5,252 19,736 18,197
Contract Drilling.... 3,164 2,846 14,642 14,799
Direct Billing Settlements - - 32,582 7,815
Other................ 1,845 2,111 32,226 6,721
------- -------- ------- --------
Total Revenues..... $55,374 $ 46,344 $243,895 $190,003
======= ======== ======== ========
SALES QUANTITIES:
Natural Gas (MMcf)... 16,378 17,262 64,100 64,486
Oil (MBls)........... 450 511 1,871 1,987
Natural Gas Liquids
(thousands of gallons) 12,407 15,047 60,407 57,637
Energy purchased amounted to $4.9 million for the quarter ended March 31,
1996 compared with $2.8 million for the quarter ended March 31, 1995. The
increase for the quarter is due to higher prices. Energy purchased for the
twelve months ended March 31, 1996 amounted to $13.0 million compared with $10.7
million for the twelve months ended March 31, 1995. The increase in purchased
energy for the twelve month period is due to higher requirements, reflecting
increased production of natural gas liquids and higher prices.
Other operating expenses were $34.9 million for the quarter ended March 31,
1996 compared with $41.8 million for the quarter ended March 31, 1995. The
decrease for the quarter is due to decreased depreciation and depletion
reflecting lower depletion rates and lower production. Other operating expenses
for the twelve months ended March 31, 1996 of $230.9 million, excluding a charge
of $73.9 million for impairment of assets, were substantially the same as the
$158.1 million for the twelve months ended March 31, 1995.
Operating income was $15.6 million for the quarter ended March 31, 1996
compared with $1.7 million for the quarter ended March 31, 1995. The increase in
operating income for the quarter reflects higher wellhead prices for natural gas
and lower depreciation and depletion, partially offset by lower production of
natural gas and natural gas liquids. Operating income for the twelve months
ended March 31, 1996 was $.1 million compared with $21.2 million for the twelve
months ended March 31, 1995. The increase in operating income, excluding the
effect of the nonrecurring items is due to higher wellhead prices for natural
gas and higher prices and production of natural gas liquids.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (CONTINUED)
ENERGY 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 $431.5 million for the quarter ended March 31,
1996 compared with $211.0 million for the quarter ended March 31, 1995. The
increase in revenues is due to an 81 percent increase in the average price of
marketed gas and a 17 percent increase in marketed gas volumes. Operating
revenues for the twelve months ended March 31, 1996 were $1,109.8 million
compared with $867.9 million for the twelve months ended March 31, 1995. The
increase in revenues is due to a 13 percent increase in the average price of
marketed gas and a 15 percent increase in marketed gas volumes. Revenues from
sale of natural gas liquids for the current periods were about the same as the
1995 amounts reflecting higher prices for natural gas liquids offset by lower
production.
THREE MONTHS ENDED TWELVE MONTHS ENDED
MARCH 31, MARCH 31,
ENERGY MARKETING 1996 1995 1996 1995
OPERATING REVENUES (THOUSANDS):
Natural Gas Marketing... $415,379 $195,755 1,045,767 $804,582
Natural Gas Liquids..... 12,534 12,884 52,669 53,256
Transportation.......... 1,723 2,293 8,835 9,672
Other................... 1,858 73 2,521 347
-------- -------- -------- --------
Total Revenues........ $431,494 $211,005 $1,109,792 $867,857
======== ======== ========== ========
SALES QUANTITIES:
Marketed Natural Gas (MMcf) 143,447 122,225 530,139 459,434
Natural Gas Liquids
(thousands of gallons) 39,072 48,233 188,779 199,272
Transportation Deliveries
(Mmcf) 30,277 26,593 126,089 108,588
Energy purchased was $419.3 million for the quarter ended March 31, 1996
compared with $201.3 million for the quarter ended March 31, 1995. Energy
purchased for the twelve months ended March 31, 1996 was $1,072.4 million
compared with $833.3 million for the twelve months ended March 31, 1995. The
increase in energy purchased for the current periods reflects higher gas prices
and an increase in purchased volumes.
Other operating expenses were $6.6 million for the quarter ended March 31,
1996 compared with $7.5 million for the quarter ended March 31, 1995. The
decrease for the quarter is due primarily to lower gas processing expenses
reflecting lower production of natural gas liquids. Other operating expenses for
the twelve months ended March 31, 1996 were $52.8 million compared with $29.7
million for the twelve months ended March 31, 1995. Other operating expenses for
the 1996 period include a charge of $21.2 million for impairment of assets. The
increase for the current period, excluding the charge, reflects marketing and
administrative expenses associated with the gas storage service that began in
early 1996.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (CONTINUED)
Operating results for the quarter ended March 31, 1996 were $5.6 million
compared with $2.2 million for the quarter ended March 31, 1995. The increase is
due to higher margins and sales for marketed gas. Operating results for the
twelve months ended March 31, 1996 were a loss of $15.4 million compared with
income of $4.9 million for the twelve months ended March 31, 1995. The increase
in operating income for the twelve-month period, excluding the charge for
impairment of assets, reflects higher margins and sales for marketed gas.
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 $183.5
million for the quarter ended March 31, 1996 compared with $162.3 million for
the quarter ended March 31, 1995. The increase in revenues is due primarily to
an increase in retail gas sales, reflecting weather that was 11 percent colder
than the 1995 quarter, a change in the mix of industrial and utility gas sales
and the effect of commercial customers switching from transportation service to
gas sales, partially offset by lower retail rates to pass through decreased
purchased gas costs to customers. Operating revenues for the twelve months ended
March 31, 1996 were $402.3 million compared with $373.1 million for the twelve
months ended March 31, 1995. The increase in revenues is due to an increase in
retail gas sales reflecting weather that was 16 percent colder than the 1995
period, a change in the mix of industrial and utility gas sales and the effect
of commercial customers switching from transportation to gas sales.
THREE MONTHS ENDED TWELVE MONTHS ENDED
MARCH 31, MARCH 31,
NATURAL GAS DISTRIBUTION 1996 1995 1996 1995
OPERATING REVENUES (THOUSANDS):
Residential Gas Sales $121,268 $122,807 $265,316 $258,433
Commercial Gas Sales. 40,722 16,834 63,692 48,789
Industrial and Utility
Gas Sales 13,432 5,025 45,635 30,961
Transportation Service 5,951 16,292 21,389 30,328
Other................ 2,149 1,323 6,259 4,572
------- -------- -------- --------
Total Revenues..... $183,522 $162,281 $402,291 $373,083
======== ======== ======== ========
SALES QUANTITIES (MMCF):
Residential Gas Sales 15,017 13,414 31,097 27,527
Commercial Gas Sales. 6,332 1,778 9,048 6,276
Industrial and Utility
Gas Sales 3,389 2,668 18,712 14,139
Transportation Deliveries 2,324 6,309 12,118 11,798
Heating Degree Days.. 3,090 2,796 6,042 5,221
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (CONTINUED)
Energy purchased amounted to $108.9 million for the quarter ended March 31,
1996 compared with $96.7 million for the quarter ended March 31, 1995. Energy
purchased for the twelve months ended March 31, 1996 was $233.9 million compared
with $221.9 million for the twelve months ended March 31, 1995. The increase in
energy costs for the current periods is due to higher gas sales, partially
offset by the pass-through of lower costs in rates to retail customers.
Other operating expenses were $39.5 million for the quarter ended March 31,
1996 compared with $32.8 million for the quarter ended March 31, 1995. Other
operating expenses were $142.6 million for the twelve months ended March 31,
1996 compared with $112.0 million for the twelve months ended March 31, 1995.
Other operating expenses for the current twelve month period includes a charge
of $20.8 million for impairment of assets. The increase in other operating
expenses for the three- and twelve month periods, excluding the charge, is due
to increased labor and outside consultant expenses related to the Company's
reengineering efforts.
Operating income for the quarter ended March 31, 1996 was $35.1 million
compared with $32.8 million for the quarter ended March 31, 1995. Operating
income was $25.8 million for the twelve months ended March 31, 1996 compared
with $39.2 million for the twelve months ended March 31, 1995. The increase in
operating income for the current periods, excluding the charge for impairment of
assets, is due primarily to higher margins reflecting higher gas sales,
partially offset by increased operating expenses.
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 $38.3 million for the quarter ended March 31, 1996 compared
with $31.6 million for the quarter ended March 31, 1995. Operating revenues for
the twelve months ended March 31,1996 were $125.6 million compared with $111.9
million for the twelve months ended March 31, 1995. Operating revenues for the
current twelve month period include $4.8 million related to the Columbia
bankruptcy settlement. The increase in revenues for the three- and twelve-month
periods, excluding the effect of the settlement, is due primarily to higher
selling prices and increased volumes of marketed natural gas.
THREE MONTHS ENDED TWELVE MONTHS ENDED
MARCH 31, MARCH 31,
NATURAL GAS TRANSMISSION 1996 1995 1996 1995
OPERATING REVENUES (THOUSANDS):
Industrial and Utility
Gas Sales $ 363 $ 363 $ 1,451 $ 1,329
Marketed Gas Sales... 12,479 4,245 30,542 17,088
Transportation Service 20,380 20,849 67,497 69,459
Storage Service...... 3,620 4,391 15,138 17,451
Other................ 1,487 1,797 10,917 6,609
------- -------- -------- --------
Total Revenues..... $38,329 $ 31,645 $125,545 $111,936
======= ======== ======== ========
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (CONTINUED)
SALES QUANTITIES (MMCF):
Industrial and Utility
Gas Sales - 1 (1) 100
Marketed Gas Sales... 3,149 2,048 12,248 8,198
Transportation Deliveries 34,870 30,429 123,531 118,570
Energy purchased amounted to $9.4 million for the quarter ended March 31,
1996 compared with $3.3 million for the quarter ended March 31, 1995. Energy
purchased for the twelve months ended March 31, 1996 was $23.5 million compared
with $14.0 million for the twelve months ended March 31, 1995. The increase in
energy costs for the three- and twelve month periods is due to higher prices for
marketed gas and an increase in marketed gas sales.
Other operating expenses were $15.7 million for the quarter ended March 31,
1996 compared with $16.8 million for the quarter ended March 31, 1995. Other
operating expenses for the twelve months ended March 31, 1996 were $69.5 million
compared with $65.6 million for the twelve months ended March 31, 1995. Other
operating expenses for the current twelve month period include a charge of $5.2
million for impairment of assets. Other operating expenses for the current
periods, excluding the charge, remained substantially the same.
Operating income was $13.2 million for the quarter ended March 31, 1996
compared with $11.5 million for the quarter ended March 31, 1995. Operating
income was $32.6 million for the twelve months ended March 31, 1996 compared
with $32.3 million for the twelve months ended March 31, 1995. The increase in
operating income for the current periods, excluding the effect of the Columbia
settlement and the charge for impairment of assets, is due to higher prices for
marketed gas and an increase in marketed natural gas sales.
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.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (CONTINUED)
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 $129.5 million has been authorized for the
1996 capital expenditure program, with $63.8 allocated to exploration and
production, $30.7 million for natural gas marketing, $24.6 million for natural
gas distribution and $10.4 million for natural gas transmission. Capital
expenditures for the three months ended March 31, 1996 were $18.8 million.
Short-term loans are also used as interim financing for a portion of
capital expenditures. The Company expects to finance its 1996 capital
expenditures with cash generated from operations and temporarily with short-term
loans.
CAPITAL RESOURCES AND LIQUIDITY
FINANCING ACTIVITIES
The Company has adequate borrowing capacity to meet its financing
requirements. The Company has a 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 1996, $131.0 million of commercial paper was outstanding at an average
interest rate of 5.38 percent. Adequate credit is expected to continue to be
available in the future.
The Company intends to file a shelf registration with the Securities and
Exchange Commission in June 1996 to issue $250 million of long-term debt. The
proceeds from issuance of this debt is expected to be used to retire the 8 1/4%
Debentures and provide funds for the possible tender or defeasance of the 9.9%
Debentures.
BALANCE SHEET CHANGES
The increase in accounts receivable is due to the higher sales of marketed
gas. 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. The increase in accounts payable reflects
higher gas purchased for marketing.
<PAGE>
PART II. OTHER INFORMATION
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
3 (i) Articles of Amendment to the Restated Articles of
Incorporation of the Company dated May 7, 1996.
3 (ii) Company's Bylaws as amended March 21, 1996.
(b) Reports on Form 8-K during the quarter ended March 31, 1996:
Form 8-K dated March 21, 1996 describing the Board of Directors'
adoption of a Preferred Stock Purchase Rights Plan.
<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: May 14, 1996
DSCB: 15-1915 (Rev, 90)
P. O. NALY COMPANY, PGH., PA 15219
Microfilm Filed with the Department
Number ________________ of State on ______________________________________
Equity Number _________ Secretary of
the Commonwealth _________________________________
ARTICLES OF AMENDMENT-DOMESTIC BUSINESS CORPORATION
In compliance with the requirements of 15 Pa.C.S.Section 1915 (relating to
articles of amendment), the undersigned business corporation, desiring to amend
its Articles, hereby states that:
1. The name of the corporation is: Equitable Resources, Inc.
------------------------------------------
2. The (a) address of this corporation's current registered office in this
Commonwealth or (b) name of its commercial registered office provider and the
county of venue is (the Department is hereby authorized to correct the following
information to conform to the records of the Department):
(a) 420 Boulevard of the Allies, Pittsburgh, PA 15219, Allegheny County.
--------------------------------------------------------------------------
Number and Street, City, State, Zip, County
(b) c/o: ---------------------------------------------------------------------
Name of Commercial Registered Office Provider
For a corporation represented by a commercial registered office provider, the
county in (b) shall be deemed the county in which the corporation is located for
venue and official publication purposes.
3. The statute by or under which it was incorporated is:
Pennsylvania Business Corporation Law.
---------------------------------------------------------------------------
4. The date of its incorporation is: March 31, 1926.
-----------------------------------------
5. (Check, and if appropriate complete, one of the following):
X The amendment shall be effective upon filing these Articles of
------ Amendment in the Department of State.
------ The amendment shall be effective on: at:
------------- ----------.
6. (Check one of the following):
------ The amendment was adopted by the shareholders (or members) pursuant
to 15 Pa.C.S. Section 1914(a) and (b).
X The amendment was adopted by the board of directors pursuant to 15
------ Pa.C.S. Section 1914(c).
7. (Check, and if appropriate complete, one of the following):
------ The amendment adopted by the corporation, set forth in full, is as
follows:
X The amendment adopted by the corporation as set forth in full in
------ Exhibit A attached hereto and made a part hereof.
8. (Check if the amendment restates the Articles):
------ The restated Articles of Incorporation supersede the original
Articles and all amendments thereto.
IN TESTIMONY WHEREOF, the undersigned corporation has caused these Articles
of Amendment to be signed by a duly authorized officer thereof this 7th day of
May, 1996.
Equitable Resources, Inc.
-----------------------------------------------
(Name of Corporation)
By: /s/ Audrey C. Moeller
-----------------------------------------------
(Signature)
TITLE: Vice President and Corporate Secretary
-----------------------------------------------
<PAGE>
EXHIBIT A
RESOLVED, That pursuant to the authority conferred upon the Board of
Directors by Article Fifth, Division A, section 1.1 of the Restated Articles of
Incorporation of the Company, as amended, there is hereby established a series
of the Preferred Stock of the Company to consist initially of 500,000 shares
with the designation and relative rights and preferences thereof to be as
follows:
DESIGNATION. The shares of such series shall be designated as "Series One
Preferred Stock." Shares of this series shall be issued pursuant to the
exercise of rights to purchase Series One Preferred Stock distributed to
the holders of Common Stock, without par value, of the Company (the
"Common Stock").
DIVIDENDS AND DISTRIBUTIONS. Subject to the rights and preferences of the
holders of any shares of any series of Preferred Stock ranking senior as
to dividends to this Series One Preferred Stock, as such may be
established by the Board of Directors, the holders of shares of Series One
Preferred Stock, in preference to the holders of Common Stock and shares
of stock ranking junior as to dividends to the Series One Preferred Stock,
shall be entitled to receive, when and if declared by the Board of
Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the 15th day of March, June, September and
December in each year (each such date being referred to herein as a
"Quarterly Dividend Payment Date"), commencing on the first Quarterly
Dividend Payment Date after the first issuance of a share or fraction of a
share of Series One Preferred Stock, in an amount per share (rounded to
the nearest cent) equal to the greater of (a) $29.50 or (b) subject to the
provision for adjustment hereinafter set forth, 100 times the aggregate
per share amount of all cash dividends plus 100 times the aggregate per
share amount (payable in kind) of all non-cash dividends or other
distributions, other than a dividend payable in shares of Common Stock, or
a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), paid on the Common Stock at any time
during the quarter year immediately preceding the quarter year ending on
the day immediately preceding such Quarterly Dividend Payment Date. In the
event the Company shall at any time after April 1, 1996 (the "Rights
Distribution Date") during any quarter year immediately preceding the
quarter year ending on the day immediately preceding a Quarterly Dividend
Payment Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, or (ii) subdivide the outstanding Common Stock or combine
the outstanding Common Stock into a greater or lesser number of shares of
Common Stock, then in each such case the amounts to which holders of
shares of Series One Preferred Stock were entitled immediately prior to
such event under clause (b) of the preceding sentence shall be adjusted by
multiplying each such amount by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
Dividends shall begin to accrue and be cumulative on outstanding shares of
Series One Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of Series One Preferred Stock,
unless the date of issue is a Quarterly Dividend Payment Date or is a date
after the record date for the determination of holders of shares of Series
One Preferred Stock entitled to receive a quarterly dividend and before
such Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such Quarterly
Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series One Preferred Stock in an
amount less than the total amount of such dividends at the time accrued
and payable on such shares shall be allocated pro rata on a share-by-share
basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares
of Series One Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more than 30
days prior to the date fixed for the payment thereof.
VOTING RIGHTS. Except as otherwise provided by law,
holders of shares of Series One Preferred Stock shall
have no voting rights.
CERTAIN RESTRICTIONS. Whenever quarterly dividends or other dividends or
distributions payable on the Series One Preferred Stock are in arrears,
thereafter and until all accrued and unpaid dividends and distributions,
whether or not declared, on shares of Series One Preferred Stock
outstanding shall have been paid in full, the Company shall not: (i)
declare or pay dividends on, make any distributions on, or redeem or
purchase or otherwise acquire for consideration any shares of stock
ranking junior (either as to dividends or as to assets) to the Series One
Preferred Stock; (ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as to
dividends or as to assets) with the Series One Preferred Stock, except
dividends paid ratably on the Series One Preferred Stock and all such
parity stock on which dividends are payable or in arrears in proportion to
the total amounts to which the holders of all such shares are then
entitled; (iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior (either as to dividends or as to
assets) to the Series One Preferred Stock, provided that the Company may
at any time redeem, purchase or otherwise acquire shares of any such
junior stock in exchange for shares of any stock of the Company ranking
junior (either as to dividends or as to assets) to the Series One
Preferred Stock; or (iv) purchase or otherwise acquire for consideration
any shares of Series One Preferred Stock, or any shares of stock ranking
on a parity (either as to dividends or upon liquidation, dissolution or
winding up) with the Series One Preferred Stock, except in accordance with
a purchase offer made in writing or by publication (as determined by the
Board of Directors) to all holders of such shares upon such terms as the
Board of Directors, after consideration of the respective annual dividend
rates and other relative rights and preferences of the respective series
and classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes. The Company
shall not permit any subsidiary of the Company to purchase or otherwise
acquire for consideration any shares of stock of the Company unless the
Company could, under this paragraph, purchase or otherwise acquire such
shares at such time and in such manner.
REACQUIRED SHARES. Any shares of Series One Preferred Stock purchased or
otherwise acquired by the Company in any manner whatsoever shall be
retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares
of Preferred Stock and may be reissued as part of a new series of
Preferred Stock to be created by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions on issuance set
forth herein.
LIQUIDATION, DISSOLUTION OR WINDING UP. Subject to the rights and
preferences of the holders of any shares of any series of Preferred Stock
ranking senior as to assets to this Series One Preferred Stock, as such
may be established by the Board of Directors, upon any involuntary or
voluntary liquidation, dissolution or winding up of the Company, no
distribution shall be made to the holders of shares of stock ranking
junior (either as to dividends or as to assets) to the Series One
Preferred Stock unless, prior thereto, the holders of shares of Series One
Preferred Stock shall have received an amount per share equal to the Per
Share Series One Liquidation Preference. The Per Share Series One
Liquidation Preference shall be equal to the sum of (x) $100.00 plus an
amount equal to accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment, plus (y) the
Participation Preference. The "Participation Preference" is an amount per
each share of Series One Preferred Stock outstanding equal to the product
of (A) the Excess Distribution Amount, as hereinafter defined, times (B) a
fraction whose numerator is 100 and whose denominator is the sum of (i)
the product of 100 times the number of outstanding shares of Series One
Preferred Stock, plus (ii) the product of 100 times a fraction whose
numerator is the number of outstanding shares of Common Stock and whose
denominator is the Adjustment Number; provided, however, if the foregoing
computation results in a negative number, then the Participation
Preference shall be 0. Following the payment of the full amount of the
Series One Liquidation Preference, holders of shares of Common Stock shall
receive the remaining assets to be distributed.
The "Excess Distribution Amount" is an amount equal to the amount
available for distribution to shareholders of the Company after payment of
all debts and liabilities less the sum of (i) the liquidation preferences
in respect of all shares of preferred stock of the Company other than the
Series One Preferred Stock, (ii) the product of 100 times the number of
outstanding shares of Series One Preferred Stock, and (iii) the product of
the number of outstanding shares of Common Stock times a fraction whose
numerator is 100 and whose denominator is the Adjustment Number.
The Adjustment Number shall initially be 100 and shall be subject to
adjustment as provided below. In the event the Company shall at any time
after the Rights Distribution Date (i) declare any dividend on Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock, or (iii) combine the outstanding Common Stock into a smaller
number of shares, then in each such case the Adjustment Number in effect
immediately prior to such event shall be adjusted by multiplying such
Adjustment Number by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
CONSOLIDATION, MERGER, ETC. In case the Company shall enter into any
consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the
shares of Series One Preferred Stock shall at the same time be similarly
exchanged or changed in an amount per share (subject to the provision for
adjustment hereinafter set forth) equal to 100 times the aggregate amount
of stock, securities, cash and/or any other property (payable in kind), as
the case may be, into which or for which each share of Common Stock is
changed or exchanged. In the event the Company shall at any time (i)
declare any dividend on Common Stock payable in shares of Common Stock, or
(ii) subdivide the outstanding Common Stock or combine the outstanding
Common Stock into a greater or lesser number of shares of Common Stock,
then in each such case the amount set forth in the preceding sentence with
respect to the exchange or change of shares of Series One Preferred Stock
shall be adjusted by multiplying such amount by a fraction, the numerator
of which is the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to such event.
REDEMPTION. The outstanding shares of Series One Preferred Stock may be
redeemed at the option of the Board of Directors as a whole, but not in
part, at any time or from time to time, at a cash price per share equal to
(i) the product of the Adjustment Number times the Average Market Value,
as such term is hereinafter defined, of the Common Stock, plus (ii) all
dividends which on the redemption date have accrued on the shares to be
redeemed and have not been paid or declared and a sum sufficient for the
payment thereof set apart, without interest; provided, however, that if
and whenever any quarter-yearly dividend shall have accrued on the Series
One Preferred Stock which has not been paid or declared and a sum
sufficient for the payment thereof set apart, the Company may not purchase
or otherwise acquire any shares of Series One Preferred Stock unless all
shares of such stock at the time outstanding are so purchased or otherwise
acquired. The "Average Market Value" is the average of the closing sale
prices of the Common Stock during the 30-day period immediately preceding
the date before the redemption date on the Composite Tape for New York
Stock Exchange-Listed Stocks, or, if such stock is not quoted on the
Composite Tape, on the New York Stock Exchange, or, if such stock is not
listed on such Exchange, on the principal United States securities
exchange registered under the Securities Exchange Act of 1934, as amended,
on which such stock is listed, or, if such stock is not listed on any such
exchange, the average of the closing bid quotations with respect to a
share of Common Stock during such 30-day period on the National
Association of Securities Dealers, Inc. Automated Quotations System or any
system then in use, or, if no such quotations are available, the fair
market value of the Common Stock as determined by the Board of Directors
in good faith.
FRACTIONAL SHARES. Series One Preferred Stock may be issued in fractions
of a share which shall entitle the holder, in proportion to such holder's
fractional shares, to exercise voting rights, if applicable, receive
dividends, participate in distributions and to have the benefit of all
other rights of holders of Series One Preferred Stock.
EQUITABLE RESOURCES, INC.
BY-LAWS
(Amended through March 21, 1996)
ARTICLE I
MEETINGS OF SHAREHOLDERS
Section 1.01 All meetings of the shareholders shall be held at the
principal office of the Company or such other places, either within or without
the Commonwealth of Pennsylvania, as the Board of Directors may from time to
time determine.
Section 1.02 An annual meeting of shareholders shall be held in each
calendar year at such time and place as the Board of Directors shall determine.
If the annual meeting shall not be called and held during such calendar year,
any shareholder may call such meeting at any time thereafter.
Section 1.03 At each such annual meeting, the class of Directors then
being elected shall be elected to hold office for a term of three (3) years, and
until their successors shall have been elected and qualified. All elections of
Directors shall be conducted by three (3) Judges of Election, who need not be
shareholders, appointed by the Board of Directors. If any such appointees are
not present, the vacancy shall be filled by the presiding officer of the
meeting. The President of the Company shall preside and the Secretary shall take
the minutes at all meetings of the shareholders. In the absence of the
President, the Chairman of the Executive Committee shall preside. In the absence
of both, the presiding officer shall be designated by the Board of Directors or,
if not so designated, by the shareholders of the Company, and if the Secretary
is unable to do so, the presiding officer shall designate any person to take the
minutes of the meeting.
Section 1.04 The presence, in person or by proxy, of the holders of a
majority of the voting power of all shareholders shall constitute a quorum
except as otherwise provided by law or by the Restated Articles of the Company.
If a meeting is not organized because a quorum is not present, the shareholders
present may adjourn the meeting to such time and place as they may determine,
except that any meeting at which Directors are to be elected shall be adjourned
only from day to day, or for such longer periods not exceeding fifteen (15) days
each, as may be directed by a majority of the voting stock present.
Section 1.05 Shareholders entitled to vote on any matter shall be
entitled to one (1) vote for each share of capital stock standing in their
respective names upon the books of the Company to be voted by the shareholder in
person or by his or her duly authorized proxy or attorney. The validity of every
unrevoked proxy shall cease eleven (11) months after the date of its execution
unless some other definite period of validity shall be expressly provided
therein, but in no event shall a proxy, unless coupled with an interest, be
voted on after three (3) years from the date of its execution. All questions
shall be decided by the vote of shareholders entitled to cast at least a
majority of the votes which all shareholders present and voting (excluding
abstentions) are entitled to cast on the matter, unless otherwise expressly
provided by law or by the Restated Articles of the Company.
Section 1.06 Special meetings of shareholders may be called by the
Board of Directors, by the President, or by the holders of at least one-fifth
(1/5) of all the shares outstanding and entitled to vote thereat.
Section 1.07 Notice of the annual meeting and of all special meetings
of shareholders shall be given by sending a written or printed notice thereof by
mail, specifying the place, day, and hour of the meeting and, in the case of a
special meeting of shareholders, the general nature of the business to be
transacted, to each shareholder at the address appearing on the books of the
Company, or the address supplied by such shareholder to the Company for the
purpose of notice, at least five (5) days before the day named for the meeting,
unless such shareholders shall waive notice or be in attendance at the meeting.
ARTICLE II
GENERAL PROVISIONS
Section 2.01 The principal office of the Company shall be in the City
of Pittsburgh, Pennsylvania, and shall be kept open during business hours every
day except Saturdays, Sundays, and legal holidays, unless otherwise ordered by
the Board of Directors or the President.
Section 2.02 The Company shall have a corporate seal which shall
contain within a circle the following words: "Equitable Resources, Inc.,
Pittsburgh, Pennsylvania" and in an inner circle the words "Corporate Seal."
Section 2.03 The fiscal year of the Company shall begin with January
1 and end with December 31 of the same calendar year.
Section 2.04 The Board of Directors shall fix a time, not more than
seventy (70) days prior to the date of any meeting of shareholders, or the date
fixed for the payment of any dividend or distribution, or the date for any
allotment of rights, or the date when any change or conversion or exchange of
shares will be made or go into effect, as a record date for the determination of
the shareholders entitled to notice of, or to vote at, any such meeting, or
entitled to receive payment of any such dividend or distribution, or to receive
any such allotment of rights, or to exercise the rights in respect of any such
change, conversion, or exchange of shares.
ARTICLE III
BOARD OF DIRECTORS
Section 3.01 Regular meetings of the Board of Directors shall be held
at least six (6) times each year, immediately after the annual meeting of
shareholders and at such other times and places as the Board of Directors shall
from time to time designate by resolution of the Board. Notice need not be given
of regular meetings of the Board held at the times and places fixed by
resolution of the Board.
If the Board shall fail to designate the specific time and place of
any regular meeting, such regular meeting shall be held at such time and place
as designated by the President and, in such case, oral, telegraphic or written
notice shall be duly served or sent or mailed by the Secretary to each Director
not less than five (5) days before the meeting.
Section 3.02 Special meetings may be held at any time upon the call
of the President, or the Chairman of the Executive Committee in the absence of
the President, at such time and place as he may deem necessary, or by the
Secretary at the request of any two (2) members of the Board, by oral,
telegraphic or written notice duly served or sent or mailed to each Director not
less than twenty-four (24) hours before the meeting.
Section 3.03 Fifty percent (50%) of the Directors at the time in
office shall constitute a quorum for the transaction of business. Vacancies in
the Board of Directors, including vacancies resulting from an increase in the
number of Directors, shall be filled only by a majority vote of the remaining
Directors then in office, though less than a quorum, except that vacancies
resulting from removal from office by a vote of the shareholders may be filled
by the shareholders at the same meeting at which such removal occurs. All
Directors elected to fill vacancies shall hold office for a term expiring at the
annual meeting of shareholders at which the term of the class to which they have
been elected expires.
Section 3.04 One (1) or more Directors may participate in a meeting
of the Board or of a committee of the Board by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and all Directors so participating shall be
deemed present at the meeting.
Section 3.05 The full Board of Directors shall consist of not less
than five (5) nor more than twelve (12) persons, the exact number to be fixed
from time to time by the Board of Directors pursuant to a resolution adopted by
a majority vote of the Directors then in office.
Section 3.06 The Board of Directors may elect one (1) of its members
(who shall not be an officer of the Company during his tenure) as its Chairman,
if the By-Laws of the Company do not then provide for the election of a Chairman
of the Board who shall be the Chief Executive Officer of the Company. A Chairman
so elected shall confer with the President as to the content of agendas for such
meetings and shall consult with the President as to matters affecting or
relating to the Board of Directors. The Chairman so elected shall serve until
the first meeting of the Board following the next annual meeting of the
shareholders. The Board shall also fix the annual rate of compensation to be
paid to the Chairman in addition to compensation paid to all non-officer members
of the Board. The Chairman, or in the absence of the Chairman, the President,
shall preside at all meetings of the Board, preserve order, and regulate debate
according to the usual parliamentary rules. In the absence of the Chairman or
the President, a Chairman pro tem may be appointed by the Board.
Section 3.07 Only persons who are nominated in accordance with the
following procedures shall be eligible for election as directors. Nomination for
election to the Board of Directors of the Company at a meeting of shareholders
may be made by the Board of Directors or by any shareholder of the Company
entitled to vote for the election of directors at such meeting who complies with
the notice procedures set forth in this Section 3.07. Such nomi-nations, other
than those made by or on behalf of the Board of Directors, shall be made by
notice in writing delivered or mailed by first class United States mail, postage
prepaid, to the Secretary, and received not less than 60 days nor more than 90
days prior to such meeting; provided, however, that if less than 70 days' notice
or prior public disclosure of the date of the meeting is given to shareholders,
such nomination shall have been mailed or delivered to the Secretary not later
than the close of business on the 10th day following the day on which the notice
of the meeting was mailed or such public disclosure was made, whichever occurs
first. Such notice shall set forth (a) as to each proposed nominee (i) the name,
age, business address and, if known, residence address of each such nominee,
(ii) the principal occupation or employment of each such nominee, (iii) the
number of shares of stock of the Company which are beneficially owned by each
such nominee, and (iv) any other information concerning the nominee that must be
disclosed as to nominees in proxy solicitations pursuant to Regulation 14A under
the Securities Exchange Act of 1934, as amended (including such person's written
consent to be named as a nominee and to serve as a director if elected); and (b)
as to the shareholder giving the notice (i) the name and address, as they appear
on the Company's books, of such shareholder and (ii) the class and number of
shares of the Company which are beneficially owned by such shareholder. The
Company may require any proposed nominee to furnish such other information as
may reasonably be required by the Company to determine the eligibility of such
proposed nominee to serve as a director of the Company.
The Chairman of the meeting may, if the facts warrant, determine and
declare to the meeting that a nomination was not made in accordance with the
foregoing procedure, and if he should so determine, he shall so declare to the
meeting and the defective nomination shall be disregarded.
Section 3.08 No Director of this Company shall be permitted to serve
in that capacity after the date of the annual meeting of shareholders next
following his or her seventy-fourth (74th) birthday. No person who is an
employee or officer of the Company, except the Chief Executive Officer, shall be
eligible to serve as a Director of the Company after he or she has retried from
service as an employee or officer.
Section 3.09 No Director shall be personally liable for monetary
damages as such (except to the extent otherwise provided by law) for any action
taken, or any failure to take any action, unless such Director has breached or
failed to perform the duties of his or her office under Title 42, Chapter 83,
Subchapter F of the Pennsylvania Consolidated Statutes (or any successor statute
relating to Directors' standard of care and justifiable reliance); and the
breach or failure to perform constitutes self-dealing, willful misconduct or
recklessness.
If the Pennsylvania Consolidated Statutes are amended after May 22,
1987, the date this section received shareholder approval, to further eliminate
or limit the personal liability of Directors, then a Director shall not be
liable, in addition to the circumstances set forth in this section, to the
fullest extent permitted by the Pennsylvania Consolidated Statutes, as so
amended.
The provisions of this section shall not apply to any actions filed
prior to January 27, 1987, nor to any breach of performance of duty, or any
failure of performance of duty, by any Director occurring prior to January 27,
1987.
ARTICLE IV
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 4.01 Directors, officers, agents, and employees of the
Company shall be indemnified as of right to the fullest extent not prohibited by
law in connection with any actual or threatened action, suit or proceeding,
civil, criminal, administrative, investigative or other (whether brought by or
in the right of the Company or otherwise) arising out of their service to the
Company or to another enterprise at the request of the Company. The Company may
purchase and maintain insurance to protect itself and any such Director,
officer, agent or employee against any liability asserted against and incurred
by him or her in respect of such service, whether or not the Company would have
the power to indemnify him or her against such liability by law or under the
provisions of this section. The provisions of this section shall be applicable
to persons who have ceased to be Directors, officers, agents, and employees and
shall inure to the benefit of the heirs, executors, and administrators of
persons entitled to indemnity hereunder.
Indemnification under this section shall include the right to be paid
expenses incurred in advance of the final disposition of any action, suit or
proceeding for which indemnification is provided, upon receipt of an undertaking
by or on behalf of the indemnified person to repay such amount if it ultimately
shall be determined that he or she is not entitled to be indemnified by the
Company. The indemnification rights granted herein are not intended to be
exclusive of any other rights to which those seeking indemnification may be
entitled and the Company may enter into contractual agreements with any
Director, officer, agent or employee to provide such individual with
indemnification rights as set forth in such agreement or agreements, which
rights shall be in addition to the rights set forth in this section.
The provisions of this section shall be applicable to actions, suits
or proceedings commenced after the adoption hereof, whether arising from acts or
omissions occurring before or after the adoption hereof.
ARTICLE V
STANDING COMMITTEES
Section 5.01 The Board of Directors shall have authority to appoint
an Executive Committee, a Finance Committee, an Audit Committee, and such other
committees as it deems advisable, each to consist of two (2) or more Directors,
and from time to time to define the duties and fix the number of members of each
committee. In the absence or disqualification of any member of any such
committee, the member or members thereof present at any meeting and not
disqualified from voting, whether or not constituting a quorum, may unanimously
appoint another Director or Directors to act at the meeting in the place of any
such absent or disqualified member or members.
ARTICLE VI
OFFICERS
Section 6.01 The officers of the Company shall be chosen by the Board
of Directors and shall be a President, a Secretary, and a Treasurer. The Board
of Directors may also choose such Vice Presidents, including one (1) or more
Executive Vice Presidents and Senior Vice Presidents, and one (1) or more
Assistant Secretaries and Assistant Treasurers as it may determine.
Section 6.02 The Board of Directors shall, at the first meeting of
the Board after its election, elect the principal officers of the Company, and
may elect additional officers at that or any subsequent meeting. All officers
elected by the Board of Directors shall hold office at the pleasure of the
Board.
Section 6.03 At the discretion of the Board of Directors, any two (2)
of the offices mentioned in Section 6.01 hereof may be held by the same person
except the offices of President and Secretary.
Section 6.04 The salaries of all officers of the Company, other than
Assistant Secretaries and Assistant Treasurers, shall be fixed by the Board of
Directors.
Section 6.05 The officers of the Company shall hold office until the
next annual meeting of the Board and until their successors are chosen and
qualify in their stead or until their earlier resignation or removal. Any
officer or agent may be removed by the Board of Directors whenever in its
judgment the best interests of the Company will be served thereby. Such removal,
however, shall be without prejudice to the contract rights of the person so
removed. If the office of any officer becomes vacant for any reason, the vacancy
may be filled by the Board of Directors.
PRESIDENT
Section 6.06 The President shall be the Chief Executive Officer of
the Company; shall preside at all meetings of the shareholders and at all
meetings of the Board of Directors; shall have general and active management of
the business of the Company; and shall see that all orders and resolutions of
the Board of Directors are carried into effect. In addition to any specific
powers conferred upon the President by these By-Laws, he shall have and exercise
such further powers and duties as from time to time may be conferred upon or
assigned to him by the Board of Directors.
SECRETARY
Section 6.07 The Secretary shall attend all meetings of the
shareholders and Board of Directors; shall record all votes and the minutes of
all proceedings in a book to be kept for that purpose; and shall perform like
duties for all committees of the Board, if so designated by the Board. The
Secretary shall keep in safe custody the seal of the Company and when authorized
by the Board of Directors, affix the seal of the Company to any instrument
requiring it and, when so affixed, it shall be attested by the signature of the
Secretary or by the signature of the Treasurer or an Assistant Secretary. The
Secretary shall have custody of all contracts, leases, assignments, and all
other valuable instruments unless the Board of Directors or the President shall
otherwise direct. The Secretary shall give, or cause to be given, notice of all
annual meetings of the shareholders and any other meetings of the shareholders
and, when required, notice of the meetings of the Board of Directors; and, in
general, shall perform all duties incident to the office of a secretary of a
corporation, and such other duties as may be prescribed by the Board of
Directors or the President.
Section 6.08 The Board of Directors may elect one (1) or more
Assistant Secretaries who shall perform the duties of the Secretary in the event
of the Secretary's absence or inability to act, as well as such other duties as
the Board of Directors, the President, or the Secretary may from time to time
designate.
TREASURER
Section 6.09 The Treasurer shall have charge of all moneys and
securities belonging to the Company subject to the direction and control of the
Board of Directors. The Treasurer shall deposit all moneys received by the
Company in the name and to the credit of the Company in such bank or other place
or places of deposit as the Board of Directors shall designate; and for that
purpose the Treasurer shall have power to endorse for collection or payment all
checks or other negotiable instruments drawn payable to the Treasurer's order or
to the order of the Company. The Treasurer shall disburse the moneys of the
Company upon properly drawn checks which shall bear the signature of the
Treasurer or of any Assistant Treasurer or of the Cashier (who shall be
appointed by the Assistant Treasurer with the approval of the Treasurer). All
checks shall be covered by vouchers which shall be certified by the Controller
or the Auditor of Disbursements or such other employee of the Company (other
than the Cashier) as may be designated by the Treasurer from time to time. The
Treasurer may create, from time to time, such special imprest funds as may, in
the Treasurer's discretion, be deemed advisable and necessary, and may open
accounts with such bank or banks as may be deemed advisable for the deposit
therein of such special imprest funds, and may authorize disbursements therefrom
by checks drawn against such accounts by the Treasurer, any Assistant Treasurer,
or such other employee of the Company as may be designated by the Treasurer from
time to time. The Treasurer shall perform such other duties as may be assigned
from time to time by the Board of Directors, the President or the Chief
Financial Officer.
Section 6.10 No notes or similar obligations shall be made except
jointly by the President or the Chief Financial Officer and the Treasurer or an
Assistant Treasurer, except as otherwise authorized by the Board of Directors.
Section 6.11 The Board of Directors may elect one (1) or more
Assistant Treasurers who shall perform the duties of the Treasurer in the event
of the Treasurer's absence or inability to act, as well as such other duties as
the Board of Directors, the President, the Chief Financial Officer or the
Treasurer may from time to time designate.
VICE PRESIDENTS
Section 6.12 Vice Presidents shall perform such duties as may be
assigned to them from time to time by the Board of Directors or the President as
their positions are established or changed. During the absence or inability of
the President to serve, an Executive Vice President or Senior Vice President so
designated by the Board of Directors shall have all the powers and perform the
duties of the President.
GENERAL
Section 6.13 Fidelity bond coverage shall be obtained on such
officers and employees of the Company, and of such type and in such amounts as
may, in the discretion of the Board of Directors, be deemed proper and
advisable.
ARTICLE VII
CERTIFICATES OF STOCK
Section 7.01 The shares of the capital stock of the Company shall be
represented by certificates of stock signed by the President or a Vice
President, and countersigned by the Secretary or an Assistant Secretary or the
Treasurer or an Assistant Treasurer, and sealed with the corporate seal of the
Company. Said certificates shall be in such form as the Board of Directors may
from time to time prescribe. The Board of Directors may from time to time
appoint an incorporated company or companies to act as Transfer Agent and
Registrar of the stock certificates of the Company, and in the case of the
appointment of such Transfer Agent, the officers of the Company shall sign and
seal stock certificates in blank and place them with the transfer books in the
custody and control of such Transfer Agent. If any stock certificate is signed
by a Transfer Agent or Registrar, the signature of any such officer and the
corporate seal upon any such certificate may be a facsimile, engraved or
printed.
Section 7.02 New certificates for shares of stock may be issued to
replace certificates lost, stolen, destroyed or mutilated upon such terms and
conditions as the Board may from time to time determine.
ARTICLE VIII
AMENDMENTS
Section 8.01 (a) The Board of Directors may make, amend, and repeal
the By-Laws with respect to those matters which are not, by statute, reserved
exclusively to the shareholders, subject always to the power of the shareholders
to change such action as provided herein. No By-Law may be made, amended or
repealed by the shareholders unless such action is approved by the affirmative
vote of the holders of not less than eighty percent (80%) of the voting power of
the then outstanding shares of capital stock of the Company entitled to vote in
an annual election of Directors, voting together as a single class, unless such
action has been previously approved by a two-thirds vote of the whole Board of
Directors, in which event (unless otherwise expressly provided in the Articles
or the By-Laws) the affirmative vote of not less than a majority of the votes
which all shareholders are entitled to cast thereupon shall be required.
(b) Unless otherwise provided by a By-Law, by the Restated Articles
or by law, any By-Law may be amended, altered or repealed, and new By-Laws may
be adopted, by vote of a majority of the Directors present at any regular or
special meeting duly convened, but only if notice of the specific sections to be
amended, altered, repealed or added is included in the notice of meeting. No
provision of the By-Laws shall vest any property or contract right in any
shareholder.
ARTICLE IX
PENNSYLVANIA CORPORATION LAW
Section 9.01 Subchapter G--Control Share Acquisitions--and Subchapter
H--Disgorgement by Certain Controlling Shareholders Following Attempts to
Acquire Control--of Title 15, Chapter 25, of the Pennsylvania Consolidated
Statutes, shall not be applicable to the Company.
(Amended through March 21, 1996)
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