UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
[ ] 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 or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
420 BOULEVARD OF THE ALLIES 15219
PITTSBURGH, PENNSYLVANIA (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (412) 261-3000
Securities registered pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
Common Stock, no par value New York Stock Exchange
Philadelphia Stock
Exchange
7 1/2% Debentures due July 1, 1999 New York Stock Exchange
9 1/2% Convertible Subordinated New York Stock Exchange
Debentures due 2006
Securities registered pursuant to Section 12(g) of the Act:
None
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 periods 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 by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [X]
The aggregate market value of voting stock held by nonaffiliates of the
registrant as of February 28, 1997: $1,051,937,624
The number of shares outstanding of the issuer's classes of common stock
as of February 28, 1997: 35,508,443
DOCUMENTS INCORPORATED BY REFERENCE
Part III, a portion of Item 10 and Items 11, 12, and 13 are incorporated by
reference to the Proxy Statement for the Annual Meeting of Stockholders on May
23, 1997, to be filed with the Commission within 120 days after the close of the
Company's fiscal year ended December 31, 1996.
Index to Exhibits - Page 61
<PAGE>
TABLE OF CONTENTS
PART I PAGE
Item 1 Business 1
Item 2 Properties 9
Item 3 Legal Proceedings 11
Item 4 Submission of Matters to a Vote of Security Holders 11
Item 10 Directors and Executive Officers of the Registrant 12
PART II
Item 5 Market for Registrant's Common Equity and Related
Stockholder Matters 15
Item 6 Selected Financial Data 15
Item 7 Management's Discussion and Analysis of Financial
Condition and Results of Operations 16
Item 8 Financial Statements and Supplementary Data 24
Item 9 Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure 56
PART III
Item 10 Directors and Executive Officers of the Registrant 57
Item 11 Executive Compensation 57
Item 12 Security Ownership of Certain Beneficial Owners
and Management 57
Item 13 Certain Relationships and Related Transactions 57
PART IV
Item 14 Exhibits and Reports on Form 8-K 58
Index to Financial Statements
Covered by Report of Independent Auditors 59
Index to Exhibits 61
Signatures 64
<PAGE>
PART I
ITEM 1. BUSINESS
(a) Equitable Resources, Inc. ("Equitable" or the "Company") was formed
under the laws of Pennsylvania by the consolidation and merger in 1925 of two
constituent companies, the older of which was organized in 1888. The Company
directly, or through other wholly-owned subsidiaries, owns all the capital stock
of the principal operating subsidiaries: Equitable Resources Energy Company
("EREC"), ERI Services, Inc. ("ERI Services"), Kentucky West Virginia Gas
Company, L.L.C. ("Kentucky West"), Equitrans, L.P. ("Equitrans"), Nora
Transmission Company ("Nora"), Equitable Resources (Canada) Limited ("Equitable
Canada"), Louisiana Intrastate Gas Company, L.L.C. ("LIG"), Equitable Storage
Company, L.L.C. ("Equitable Storage"), Equitable Power Services Company ("Power
Services"), and Three Rivers Pipeline Corporation ("Three Rivers"). In 1996, the
Company formed ERI Services as a successor to the former Equitable Resources
Marketing Company. In January 1997, two other subsidiaries, Conogen, Inc.,
("Conogen") and Pequod Associates, Inc. ("Pequod") were merged into ERI
Services. The Companies operate in the Appalachian area and, to a lesser extent,
in the Rocky Mountain, Northeast, Southwest, Louisiana and Gulf Coast offshore
areas, the Canadian Rockies and have interests in Latin America. The Companies
engage primarily in the exploration for, development, production, purchase,
transmission, storage, distribution and marketing of natural gas and
electricity, the extraction of natural gas liquids, the exploration for,
development, production and sale of oil, contract drilling, cogeneration
development, water efficiency and program development, central facility plant
operations and performance contracting for commercial, industrial and
institutional customers and various government facilities.
(b) and (b)(1) In order to more accurately reflect the Company's lines of
business, the Company began the reporting of its business operations in three
business segments beginning in 1996: supply and logistics, utilities, and
services. Financial information by business segment is presented in Note P to
the consolidated financial statements contained in Part II.
(b)(2) Not applicable.
(c)(1)SUPPLY AND LOGISTICS. The supply and logistics segment's activities
include exploration and production of natural gas and oil, trading of natural
gas and electricity, extraction and sale of natural gas liquids, underground
storage, and intrastate transportation. Exploration and production activities
are conducted by EREC through its divisions and Equitable Canada. Its
exploration and production activities are principally in the Appalachian area
where it explores for, develops, produces and sells natural gas and oil,
extracts and markets natural gas liquids and performs contract drilling and well
maintenance services. Exploration and production activities are also conducted
in the Rocky Mountain area including the Canadian Rockies where EREC explores
for, develops and produces oil, and to a lesser extent natural gas. In the
Southwest and Gulf Coast offshore areas, EREC participates in exploration and
development of gas and oil projects. EREC also owns an interest in two natural
gas liquids plants in Texas. In Louisiana, LIG provides intrastate
transportation of gas and extracts and markets natural gas liquids and Equitable
Storage provides underground gas storage services. The supply and logistics
segment's operations also include nationwide natural gas marketing, supply, peak
shaving and transportation arrangements, and electricity marketing conducted by
Power Services.
<PAGE>
ITEM 1. BUSINESS (CONTINUED)
UTILITIES. The utilities segment's activities comprise distribution
operations by Equitable Gas Company (a division of Equitable Resources, Inc.),
the Company's state-regulated local distribution company, and transmission
operations conducted by three FERC-regulated gas pipelines: Kentucky West,
Equitrans, and Nora. Equitable Gas is regulated by state public utility
commissions in Pennsylvania, West Virginia and Kentucky and is engaged in the
purchase, distribution, marketing and transportation of natural gas. The
territory served by Equitable Gas encompasses principally the city of Pittsburgh
and surrounding municipalities in southwestern Pennsylvania, a few
municipalities in northern West Virginia and field line sales in eastern
Kentucky. Natural gas distribution services are provided to more than 266,000
customers located mainly in the city of Pittsburgh and its environs. Residential
and commercial sales volumes reflect annual variations which are primarily
related to weather.
Transmission operations include gas transportation, gathering, storage,
and marketing activities. Kentucky West is an open access natural gas pipeline
company which provides transportation service to Equitable Gas, the supply and
logistics segment, and other industrial end-users and marketed gas sales to the
services segment. Equitrans has production, storage and transmission facilities
in Pennsylvania and West Virginia. Equitrans provides transportation service for
Equitable Gas Company, the services segment, and nonaffiliates including
customers in off-system markets. Storage services are provided for Equitable Gas
Company, the services segment, and nonaffiliated customers. Marketed gas sales
are to the services segment. Nora transports the gas produced by supply and
logistics in Virginia and Kentucky.
SERVICES. The services segment was created in 1996 and functions in a
non-regulated environment. Its focus is to create and deliver customized energy
solutions to improve overall energy efficiency. Activities include natural gas
brokering, resource management, energy consulting and engineering services such
as energy use analysis, customized energy systems, financing, facility
management and energy procurement and management. The segment has operations in
Pennsylvania, Connecticut, Massachusetts, California, Indiana, Ohio, West
Virginia and Washington, D.C.
<PAGE>
ITEM 1. BUSINESS (CONTINUED)
(c)(1)(i) Operating revenues as a percentage of total operating revenues
for each of the three business segments during the years 1994 through 1996 are
as follows:
1996 1995 1994
---- ---- ----
Supply and Logistics:
Natural gas marketing 52% 53% 53%
Natural gas production 4 6 8
Oil 1 2 2
Natural gas liquids 5 5 5
Contract drilling 1 1 1
Other 2 4 1
------ ----- -----
Total Supply and Logistics 65 71 70
------ ----- -----
Utilities:
Residential 15 19 19
Commercial 4 3 5
Industrial and utility 3 1 1
Transportation 2 4 3
Other 1 2 2
------ ----- -----
Total Utilities 25 29 30
------ ----- -----
Services:
Natural gas marketing 9 - -
Other 1 - -
------ ----- -----
Total Services 10 - -
------ ----- -----
Total Revenues 100% 100% 100%
====== ===== =====
See Note P to the consolidated financial statements in Part II regarding
financial information by business segment.
(c) (1) (ii) During 1996, the Company created a new subsidiary named ERI
Services. This new unit is designed to create and deliver customized energy
solutions to businesses, institutional customers and government facilities. ERI
Services, a non-regulated subsidiary, offers commodity brokering of all forms of
energy, including electricity and natural gas. It also provides cogeneration
development, water efficiency and program development, central facility plant
operations and performance contracting for commercial, industrial and
institutional customers and various government facilities.
(c) (1) (iii) The following tables summarize gas supply and disposition,
gas transportation, and sales of oil and natural gas liquids for the years 1994
through 1996.
<PAGE>
<TABLE>
<CAPTION>
ITEM 1. BUSINESS (CONTINUED)
1996
------------------------------------------------------------------------------------
Supply and Intersegment
Logistics Utilities Services Eliminations Consolidated
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Gas Produced, Purchased and Sold (MMcf):
Produced 57,295 2,518 59,813
--------- --------- --------- --------- ---------
Purchased:
Other producers 450,080 66,127 24,189 540,396
Inter-segment purchases 6,923 15,794 31,726 (54,443)
--------- --------- --------- --------- ---------
Total purchases 457,003 81,921 55,915 (54,443) 540,396
--------- --------- --------- --------- ---------
Total produced and purchased 514,298 84,439 55,915 (54,443) 600,209
Deduct:
Net increase (decrease) in gas in storage 1,656 1,656
Extracted natural gas liquids
(equivalent gas volumes) 8,391 8,391
System use and unaccounted for 1,876 4,972 6,848
--------- --------- --------- --------- ---------
Total 504,031 77,811 55,915 (54,443) 583,314
========= ========= ========= ========= =========
Gas Sales (MMcf):
Residential 30,549 30,549
Commercial 10,505 10,505
Industrial and Utility 26,647 (5,434) 21,213
Production 57,295 (34,152) 23,143
Marketing 446,736 10,110 55,915 (14,857) 497,904
--------- --------- --------- --------- ---------
Total 504,031 77,811 55,915 (54,443) 583,314
========= ========= ========= ========= =========
Natural Gas Transported (MMcf) 120,363 70,345 (36,624) 154,084
========= ========= ========= ========= =========
Oil Produced and Sold (thousands of bls) 1,727 1,727
========= =========
Natural Gas Liquids Sold
(thousands of gallons) 280,579 280,579
========= =========
Average Selling Price:
Residential Gas Sales (per Mcf) $8.892
Commercial Gas Sales 6.512
Industrial and Utility Gas Sales 3.033
Produced Natural Gas $1.909
Marketed Natural Gas 2.281 3.083 $2.890
Oil (per barrel) 14.777
Natural Gas Liquids (per gallon) .359
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ITEM 1. BUSINESS (CONTINUED)
1995
------------------------------------------------------------------------------------
Supply and Intersegment
Logistics Utilities Services Eliminations Consolidated
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Gas Produced, Purchased and Sold (MMcf):
Produced 64,984 2,700 67,684
--------- --------- --------- --------- ---------
Purchased:
Other producers 463,551 49,962 513,513
Inter-segment purchases 13,356 13,286 (26,642)
--------- --------- --------- --------- ---------
Total purchases 476,907 63,248 (26,642) 513,513
--------- --------- --------- --------- ---------
Total produced and purchased 541,891 65,948 (26,642) 581,197
Deduct:
Net increase (decrease) in gas in storage (1,671) (1,671)
Extracted natural gas liquids
(equivalent gas volumes) 8,411 8,411
System use and unaccounted for 2,207 4,756 6,963
--------- --------- --------- --------- ---------
Total 531,273 62,863 (26,642) 567,494
========= ========= ========= ========= =========
Gas Sales (MMcf):
Residential 29,494 29,494
Commercial 4,494 4,494
Industrial and Utility 17,991 (10,349) 7,642
Production 64,984 (465) 64,519
Marketing 466,289 10,884 (15,828) 461,345
--------- --------- --------- ---------- ---------
Total 531,273 62,863 (26,642) 567,494
========= ========= ========= ========= =========
Natural Gas Transported (MMcf) 122,405 72,265 (35,470) 159,200
========= ========= ========= ========= =========
Oil Produced and Sold (thousands of bls) 1,932 1,932
========= =========
Natural Gas Liquids Sold
(thousands of gallons) 260,987 260,987
========= =========
Average Selling Price:
Residential Gas Sales (per Mcf) $ 9.048
Commercial Gas Sales 8.752
Industrial and Utility Gas Sales 2.069
Produced Natural Gas $ 1.610
Marketed Natural Gas 1.633 1.987
Oil (per barrel) 16.435
Natural Gas Liquids (per gallon) .282
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ITEM 1. BUSINESS (CONTINUED)
1994
-------------------------------------------------------------------------------------
Supply and Intersegment
Logistics Utilities Services Eliminations Consolidated
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Gas Produced, Purchased and Sold (MMcf):
Produced 62,507 2,014 64,521
--------- --------- --------- --------- ---------
Purchased:
Other producers 389,710 52,895 442,605
Inter-segment purchases 6,328 12,948 (19,276)
--------- --------- --------- --------- ---------
Total purchases 396,038 65,843 (19,276) 442,605
--------- --------- --------- --------- ---------
Total produced and purchased 458,545 67,857 (19,276) 507,126
Deduct:
Net increase (decrease) in gas in storage 60 60
Extracted natural gas liquids
(equivalent gas volumes) 7,923 7,923
System use and unaccounted for 2,082 6,659 8,741
--------- --------- --------- --------- ---------
Total 448,540 61,138 (19,276) 490,402
========= ========= ========= ========= =========
Gas Sales (MMcf):
Residential 29,570 29,570
Commercial 9,681 9,681
Industrial and Utility 12,815 (3,148) 9,667
Production 62,507 (7,237) 55,270
Marketing 386,033 9,072 (8,891) 386,214
--------- --------- --------- --------- ---------
Total 448,540 61,138 (19,276) 490,402
========= ========= ========= ========= =========
Natural Gas Transported (MMcf) 103,726 62,615 (31,004) 135,337
========= ========= ========= ========= =========
Oil Produced and Sold (thousands of bls) 1,986 1,986
========= =========
Natural Gas Liquids Sold
(thousands of gallons) 245,525 245,525
========= =========
Average Selling Price:
Residential Gas Sales (per Mcf) $8.974
Commercial Gas Sales 6.916
Industrial and Utility Gas Sales 2.491
Produced Natural Gas $1.973
Marketed Natural Gas 1.956 2.190
Oil (per barrel) 14.723
Natural Gas Liquids (per gallon) .270
</TABLE>
<PAGE>
ITEM 1. BUSINESS (CONTINUED)
During 1996, a total of 600,209 MMcf of gas was produced and purchased by
the Companies compared with 581,197 MMcf in 1995. The increase reflects greater
marketing activity.
GAS PURCHASES. Total purchases in 1996 amounted to 540,396 MMcf, of which
497,904 MMcf was applicable to marketing operations and 42,492 MMcf was for
system supply, compared with 461,345 MMcf for marketing operations and 52,168
MMcf for system supply in 1995. Through gas purchase contracts for system
supply, the Company controls proved reserves on acreage developed by independent
producers. The majority of these contracts cover the productive lives of the
wells.
NATURAL GAS AND OIL PRODUCTION. Natural gas production by the supply and
logistics segment in 1996 of 57,295 MMcf decreased 7,689 MMcf from the 1995
total of 64,984 MMcf. Other production by the utilities segment in 1996 was
2,518 MMcf compared with the 1995 total of 2,700 MMcf.
Production of crude oil in 1996 was 1,727,000 barrels, compared with
1,932,000 barrels in 1995.
In 1996, the Company drilled 137 gross wells (83.8 net wells). The primary
focus of drilling activity was in Virginia for gas and coalbed methane and in
the Rockies for oil.
The Company has been able to develop gas reserves at costs which make it
very competitive in marketing its gas to pipeline and commercial buyers. As a
result, even in periods of surplus gas supply, the Company has been able to sell
all of its gas production at a profit.
NATURAL GAS AND OIL RESERVES. The estimate of proved developed and
undeveloped gas reserves for the Company's exploration and production operation
comprised 849.5 Bcf as of December 31, 1996. These reserves included 732.2 Bcf
of proved developed reserves. The Company's oil reserves at December 31, 1996
consisted of 19.5 million barrels of proved developed and undeveloped reserves;
proved developed oil reserves amounted to 18.5 million barrels. Of the total
reserves, 78 percent is in the Appalachian area, 20 percent in the Rockies and 2
percent in the Gulf. See Note V to the consolidated financial statements in Part
II for details of gas and oil producing activities.
STORAGE. Net storage withdrawals for system use during the 1995-96 heating
season were 7.6 Bcf, compared with 5.9 Bcf the previous heating season. Net
withdrawals for storage service customers of 15.0 Bcf were made during the
1995-96 heating season compared with 12.1 Bcf during the previous heating
season.
SUPPLY OUTLOOK. The Company's near-term gas supply for distribution
operations is excellent. The long-range gas supply outlook also is very
favorable. Annual gas supply is forecasted to exceed demand at least for the
next decade. The Company's marketing operations also have been in a favorable
supply position and present reserves for the exploration and production
operations are sufficient to sustain current production levels for at least the
next decade. However, the rate of purchase of future supplies or development of
reserves will depend largely on energy prices.
<PAGE>
ITEM 1. BUSINESS (CONTINUED)
(c)(1)(iv) Equitable Gas is regulated by the Pennsylvania Public Utility
Commission and the Public Service Commissions of West Virginia and Kentucky; LIG
is regulated by the Louisiana Public Service Commission; Kentucky West,
Equitrans, Nora, LIG and EREC are regulated by the Federal Energy Regulatory
Commission under the Natural Gas Act and the Natural Gas Policy Act. Equitable
Gas, Kentucky West, Equitrans, Nora, LIG and EREC are also subject to regulation
by the Department of Transportation under the Natural Gas Pipeline Safety Act of
1968 with respect to safety requirements in the design, construction, operation
and maintenance of pipelines and related facilities.
(c)(1)(v) and (vi) Approximately 65 percent of natural gas distribution
revenue is recorded during the winter heating season from November through
March. Significant quantities of purchased gas are placed in underground storage
inventory during the off-peak season to accommodate high customer demands during
the winter heating season. Funds required to finance this inventory are obtained
through short-term loans.
The supply and logistics and services segments' revenues are not subject
to seasonal variation to the same degree as the utilities segment's revenues.
However, they are subject to price fluctuations, particularly during the summer
months.
(c)(1)(vii) Not applicable.
(c)(1)(viii) Not applicable.
(c) (1) (ix) Not applicable.
(c)(1)(x) Equitable Gas is in competition with others for the purchase of
natural gas and EREC is in competition with others for the acquisition of gas
and oil leases.
Equitable Gas competes for gas sales with other utilities in its service
area, as well as with other fuels and forms of energy and other sources of
marketed natural gas available to existing or potential customers. The natural
gas distribution operations have been successful in meeting competition with
aggressive marketing and by responding to market requirements with a portfolio
of firm and interruptible services at competitive prices.
The markets in which the services segment is active are highly
competitive, with firms ranging from very small operations to substantial,
vertically integrated electric and gas utilities active through marketing units.
(c) (1) (xi) Not material.
<PAGE>
ITEM 1. BUSINESS (CONTINUED)
(c)(1)(xii) The Company and its Subsidiaries are subject to federal, state
and local environmental laws and regulations. Principal concerns are with
respect to oil and thermal pollution of waterways, storage and disposal of
hazardous wastes and liquids, and erosion and sedimentation control in pipeline
construction work. For further discussion of environmental matters, see
Management's Discussion and Analysis of Financial Condition and Results of
Operations and Note T to the consolidated financial statements in Part II.
(c)(1)(xiii) The Companies had 2,109 regular employees at the end of
1996.
(d) Not material.
ITEM 2. PROPERTIES
Principal facilities are owned by the Company's business segments with the
exception of several office locations and warehouse buildings. The terms of the
leases on these facilities expire at various times from 1997 through 2014. All
leases contain adequate renewal options for various periods. A minor portion of
equipment is also leased. With few exceptions, transmission, storage and
distribution pipelines are located on or under (1) public highways under
franchises or permits from various governmental authorities, or (2) private
properties owned in fee, or occupied under perpetual easements or other rights
acquired for the most part without examination of underlying land titles. The
Company's facilities have adequate capacity, are well maintained and, where
necessary, are replaced or expanded to meet operating requirements.
UTILITIES. Equitable Gas owns and operates natural gas distribution
properties as well as other general property and equipment in Pennsylvania, West
Virginia and Kentucky. Equitrans owns and operates production, underground
storage and transmission facilities as well as other general property and
equipment in Pennsylvania and West Virginia. Kentucky West owns and operates
gathering and transmission properties as well as other general property and
equipment in Kentucky. Three Rivers Pipeline Corporation owns transmission
properties in central Pennsylvania.
SUPPLY AND LOGISTICS. This business segment owns or controls and operates
substantially all of the Company's gas and oil production properties, the
majority of which are located in the Appalachian area. This segment also owns
hydrocarbon extraction facilities in Kentucky with a 100-mile liquid products
pipeline which extends into West Virginia and an interest in two hydrocarbon
extraction plants in Texas. This segment also owns an intrastate pipeline system
and four hydrocarbon extraction plants in Louisiana, a high-deliverability gas
storage facility in Louisiana and a 15-mile interchange system that
interconnects the storage facility to LIG. On February 4, 1997, the Company
announced plans to acquire a 67.2 mile pipeline in southern Louisiana from the
U.S. Department of Energy for $22 million.
<PAGE>
ITEM 2. PROPERTIES (CONTINUED)
This business segment owns or controls acreage of proved developed and
undeveloped gas and oil lands located principally in the Appalachian area and,
to a lesser extent, in the Rocky Mountain area including the Canadian Rockies,
the Southwest and Gulf Coast offshore areas and in Latin America. Information
relating to Company estimates of natural gas and oil reserves and future net
cash flows is summarized in Note V to the consolidated financial statements in
Part II.
No report has been filed with any Federal authority or agency reflecting a
five percent or more difference from the Company's estimated total reserves.
Gas and Oil Production (Supply and Logistics):
1996 1995 1994
------ ------ ------
Gas - Mmcf 57,295 64,984 62,507
Oil - Thousands of Barrels 1,727 1,932 1,986
Natural Gas:
Average sales price of natural gas produced during 1996, 1995 and 1994
was $1.91, $1.61 and $1.97 per Mcf, respectively.
Average production cost (lifting cost) of natural gas during 1996, 1995
and 1994 was $.487, $.389, and $.424 per Mcf, respectively.
Oil:
Average sales price of oil produced during 1996, 1995, and 1994 was
$14.78, $16.44 and $14.72 per barrel, respectively. Average production
cost (lifting cost) of oil during 1996, 1995 and 1994 was $3.82, $3.30
and $3.73 per barrel, respectively.
Gas Oil
------- -------
Total productive wells at December 31, 1996:
Total gross productive wells 4,386 721
Total net productive wells 3,906 465
Total acreage at December 31, 1996:
Total gross productive acres 616,000
Total net productive acres 513,000
Total gross undeveloped acres 2,428,000
Total net undeveloped acres 1,941,000
<PAGE>
ITEM 2. PROPERTIES (CONTINUED)
Number of net productive and dry exploratory wells and number of net
productive and dry development wells drilled:
1996 1995 1994
------ ------ ------
Exploratory wells:
Productive 3.3 1.6 7.0
Dry 5.8 2.8 5.7
Development wells:
Productive 73.1 39.1 126.9
Dry 1.6 2.6 5.3
As of December 31, 1996, there were no wells in the process of being
drilled.
ITEM 3. LEGAL PROCEEDINGS
LIG is a party to certain claims involving its gas purchase contracts,
including take-or-pay liabilities. The seller, and/or the previous owner of LIG,
have provided indemnifications for the Company.
There are no other material pending legal proceedings, other than those
which are adequately covered by insurance, to which the Company or any of its
subsidiaries is a party, or to which any of their property is subject.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of the Company's security holders
during the last quarter of its fiscal year ended December 31, 1996.
<PAGE>
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
(b) Identification of executive officers
- - -------------------------- ------------------------ ===========================
Name and Age Title Business Experience
- - -------------------------- ------------------------ ===========================
Frederick H. Abrew (59) President and Chief First elected to present
Executive Officer position January 1, 1995;
President and Chief
Operating Officer from
December 17, 1993; Executive
Vice President and Chief
Operating Officer from June
1, 1992; Executive Vice
President from June 1, 1991.
- - -------------------------- ------------------------ ===========================
A. Mark Abramovic (48) Senior Vice President First elected to present
and Chief Financial position May 23, 1996;
Officer Vice President and Chief
Financial Officer from
November 1, 1994; Vice
President - Corporate
Development from June 1,
1994; Assistant to the
President from November
1993; Vice President-Finance
and Chief Financial Officer
of Connecticut Natural Gas
Corporation, Hartford, CT,
from January 1991.
- - -------------------------- ------------------------ ===========================
R. Gerald Bennett (54) Senior Vice President First elected to present
position June 1, 1996;
President - Fuel
Resources, Inc. from
February 1991.
------------------------- ------------------------ ===========================
Dan C. Eaton (48) Vice President - First elected to position
Strategic Planning May 23, 1996; Vice
(Resigned 12/31/96) President-Strategic and
Financial Planning from May
26, 1995; Director Finance
Analysis, H.J. Heinz,
Pittsburgh, PA, from April
1994; Vice President -
Finance of Weight Watchers
Foods, Pittsburgh, PA, from
August 1992; Vice President
- Finance of Heinz Canada
LTD, Toronto, Canada, from
June 1991.
- - -------------------------- ------------------------ ===========================
John C. Gongas, Jr. (52) Senior Vice President First elected to present
position May 23, 1996;
Vice President-Corporate
Operations from May 26,
1995; Vice President -
Utility Group from
January 1, 1994; Vice
President - Utility
Services from June 1,
1992; President of
Kentucky West Virginia
Gas Company since April
20, 1992; President of
Equitrans, Inc., from
February 26, 1988.
<PAGE>
- - -------------------------- ------------------------ ===========================
Name and Age Title Business Experience
- - -------------------------- ------------------------ ===========================
Craig G. Goodman (47) Vice President - First elected to present
Regulatory Affairs and position May 23, 1996;
Public Policy Senior Vice President -
Law, Regulation and Public
Policy of ERI Incorporated
from March 1, 1996; Vice
President of Government
Affairs for Mitchell Energy
& Development Corporation
from November 1989.
- - -------------------------- ------------------------ ===========================
Augustine A. Mazzei, Jr. Senior Vice President First elected to present
(60) and Chief Legal Officer position May 26, 1995;
(Retired 11/1/1996) Senior Vice President and
General Counsel from
June 1, 1988.
- - -------------------------- ------------------------ ===========================
Edward J. Meyer (58) Senior Vice President First elected to present
position October 28,
1996; Manager, Special
Projects of Amerada Hess
Corporation from November
1991; Vice President -
Marketing and Strategic
Planning of Sun Refining
and Marketing Company
(Sunoco) from October
1989.
- - -------------------------- ------------------------ ===========================
Audrey C. Moeller (61) Vice President and First elected to present
Corporate Secretary position May 22, 1986.
- - -------------------------- ------------------------ ===========================
Johanna G. O'Loughlin Vice President and First elected to present
(50) General Counsel position December 19,
1996; Deputy General Counsel
from April 1996; Senior Vice
President and General
Counsel of Fisher Scientific
Company from June 1986.
- - -------------------------- ------------------------ ===========================
Gregory R. Spencer (48) Senior Vice President First elected to present
and Chief position May 23, 1996.
Administrative Officer Vice President - Human
Resources and Administration
from May 26, 1995; Vice
President - Human Resources
from October 10, 1994; Vice
President of Human Resources
Administration of AMSCO
International, Inc.,
Pittsburgh, PA, from May
1993; General Manager-Human
Resources of U.S. Steel
Group of USX Corporation,
Pittsburgh, PA, from 1991.
------------------------- ------------------------ ===========================
Richard D. Spencer (42) Vice President and First elected to present
Chief Information position April 1, 1996;
Officer Manager - Technology
Programs of General Electric
Corporation from February
1991; Manager, GE Aerospace
Computer Services from
February 1990.
<PAGE>
- - -------------------------- ------------------------ ===========================
Name and Age Title Business Experience
------------------------- ------------------------ ===========================
Jeffrey C. Swoveland Vice President - First elected to present
(41) Finance and Treasurer position May 23, 1996.
Treasurer from December 15,
1995; Director of
Alternative Finance from
September 27, 1994; Vice
President - Global Corporate
Banking of Mellon Bank,
Pittsburgh, PA, from June
1993; Assistant Vice
President - Global Corporate
Banking of Mellon Bank,
Pittsburgh, PA, from June,
1989.
===============================================================================
Officers are elected annually to serve during the ensuing year or until their
successors are chosen and qualified. Except as indicated, the officers
listed above were elected on May 23, 1996.
===============================================================================
<PAGE>
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
a) The Company's common stock is listed on the New York Stock Exchange and
the Philadelphia Stock Exchange. The high and low sales prices reflected in the
New York Stock Exchange Composite Transactions as reported by The Wall Street
Journal and the dividends declared and paid per share are summarized as follows:
1996 1995
------------------------- ------------------------
High Low Dividend High Low Dividend
1st Quarter 31 1/2 27 3/4 $.295 29 5/8 26 7/8 $.295
2nd Quarter 30 5/8 27 3/4 .295* 31 1/4 27 5/8 .295*
3rd Quarter 29 7/8 25 1/4 .295 30 3/4 25 7/8 .295
4th Quarter 31 1/8 27 1/2 .295 31 3/8 28 3/4 .295
* Actually declared near the end of the preceding quarter.
(b) As of December 31, 1996, there were 7,735 shareholders of record of
the Company's common stock.
(c)(1) The indentures under which the Company's long-term debt is
outstanding contain provisions limiting the Company's right to declare or pay
dividends and make certain other distributions on, and to purchase any shares
of, its common stock. Under the most restrictive of such provisions,
$387,188,000 of the Company's consolidated retained earnings at December 31,
1996 was available for declarations or payments of dividends on, or purchases
of, its common stock.
(c)(2) The Company anticipates dividends will continue to be paid on a
regular quarterly basis.
ITEM 6. SELECTED FINANCIAL DATA
1996 1995 1994 1993 1992
-------------------------------------------------------------
(Thousands Except Per Share Amounts)
Operating
revenues $1,861,799 $1,425,990 $1,397,280 $1,094,794 $ 812,374
========== ========== ========== ========== ==========
Net income $ 59,379 $ 1,548(a) $ 60,729 $ 73,455 $ 60,026
========== ========== ========== ========== ==========
Earnings per
share of
common stock $1.69 $.04 $1.76 $2.27 $1.92
===== ==== ===== ===== =====
Total assets $2,096,299 $1,963,313 $2,019,122 $1,946,907 $1,468,424
Long-term debt $ 422,112 $ 415,527 $ 398,282 $ 378,845 $ 346,693
Cash dividends
paid per share
of common stock $1.18 $1.18 $1.15 $1.10 $1.04
(a) Includes charge for impairment of assets and nonrecurring gains. See Notes
C, D and E to the consolidated financial statements.
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
OVERVIEW
Equitable's consolidated net income for 1996 was $59.4 million, or $1.69
per share, compared with $1.5 million, or $.04 per share, for 1995 and $60.7
million, or $1.76 per share, for 1994. Earnings for 1996 include an after-tax
gain of $4.4 million, or $.13 per share, from the curtailment of the Company's
defined benefit pension plan for certain non-utility employees as more fully
described in Note G to the consolidated financial statements. Although a
nonrecurring gain, the curtailment will reduce operating costs in the future.
Earnings for 1995 include an after-tax charge of $74.2 million, or $2.12 per
share, due to the recognition of impairment of assets of $121.1 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", as more fully described in Note C to the consolidated
financial statements. The results for 1995 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 as described in Notes E and D, respectively, to the consolidated financial
statements.
The increase in income for 1996 compared to 1995, excluding the effect of
the items detailed above, is due to lower depletion rates, a 19% increase in the
average selling price for produced natural gas, lower interest costs and higher
margins from sale of natural gas liquids. These items were partially offset by
lower nonconventional fuels tax credits, a 12% decline in natural gas production
and costs incurred for the start-up and development of new operations. The lower
interest costs reflect lower average balances outstanding, lower short-term
rates, and lower long-term rates as a result of the July 1996 refinancing of
higher-cost long-term debt as more fully described in Note L to the consolidated
financial statements. The lower nonconventional fuels tax credits reflect the
November 1995 sale of interest in certain properties as more fully described in
Note R to the consolidated financial statements. The decline in natural gas
production includes the October 1995 sale of non-core Appalachian properties as
described in Note Q to the consolidated financial statements.
The decrease in earnings for 1995 compared to 1994, excluding the effect of
the items detailed above, is due primarily to a 19 percent decline in the
average selling price for produced natural gas, increased operating expenses and
higher interest costs.
RESULTS OF OPERATIONS
In 1996, the Company began reporting operations in three business segments
- - -- supply and logistics, utilities, and services. The supply and logistics
segment represents primarily the operations previously reported as the
exploration and production segment and the energy marketing segment. The
utilities segment represents primarily the operations previously reported as the
natural gas distribution segment and the natural gas transmission segment. The
services segment represents a portion of marketed gas sales previously reported
in the other segments along with several new lines of business.
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONTINUED)
RESULTS OF OPERATIONS (CONTINUED)
This discussion supplements the detailed financial information by business
segment presented in Note P to the consolidated financial statements.
Parenthetical percentages included in the discussion of operating income denote
the approximate impact relative to the change.
SUPPLY AND LOGISTICS
Supply and logistics operations are comprised of the sale of produced
natural gas, oil and natural gas liquids, contract drilling, marketing of
natural gas and electricity, and storage and intrastate transportation of
natural gas in Louisiana. Operating revenues were $1,318.7 million in 1996
compared with $1,059.9 million in 1995 and $1,012.1 million in 1994. The 1995
revenues include $40.2 million of nonrecurring amounts from the Columbia
bankruptcy settlement and $11.0 million of additional revenue from direct bill
settlements as described in Notes E and D, respectively, to the consolidated
financial statements. The increase in revenues for 1996 compared to 1995 is due
to an increase in average selling prices for marketed and produced natural gas
of 40% and 19%, respectively, an increase in average selling price and
production of natural gas liquids of 27% and 8%, respectively, and initial
revenues from the marketing of electricity. These increases were partially
offset by the nonrecurring amounts in 1995, a 12% decline in natural gas
production, lower marketed natural gas sales and lower average selling prices
and production of oil. Excluding the nonrecurring amounts in 1995, revenues were
substantially the same for 1995 and 1994. Increases in the sales of marketed and
produced natural gas of 21% and 4%, respectively, higher production and average
selling prices for natural gas liquids and 12% higher average selling prices for
oil were offset by a decrease in the average selling price for marketed and
produced natural gas of 17% and 19%, respectively.
SUPPLY AND LOGISTICS 1996 1995 1994
- - ------------------------------------------------------------------------------
OPERATING REVENUES (THOUSANDS):
Marketed Natural Gas............... $ 1,019,220 $ 761,465 $ 755,015
Produced Natural Gas .............. 109,400 104,630 123,354
Produced Natural Gas Liquids....... 100,628 73,620 66,357
Produced Oil....................... 25,520 31,753 29,239
Contract Drilling.................. 19,190 14,324 15,427
Marketed Electricity............... 15,167 - -
Natural Gas Transportation......... 7,670 9,405 9,266
Natural Gas Storage................ 1,099 - -
Direct Billing Settlements......... 7,815 32,582 7,815
Other.............................. 12,952 32,075 5,646
- - ------------------------------------------------------------------------------
Total Revenues................... $ 1,318,661 $ 1,059,854 $ 1,012,119
==============================================================================
SALES QUANTITIES:
Marketed Natural Gas (MMcf)........ 446,736 466,289 386,033
Produced Natural Gas (MMcf)........ 57,295 64,984 62,507
Oil (MBls)......................... 1,727 1,932 1,986
Natural Gas Liquids
(thousands of gallons)........... 280,579 260,987 245,525
Transportation Deliveries (MMcf)... 120,363 122,405 103,726
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONTINUED)
SUPPLY AND LOGISTICS (CONTINUED)
Cost of energy purchased includes natural gas and electricity purchased
for marketing activities and natural gas purchased for the production of natural
gas liquids. The cost of energy purchased amounted to $1,092.9 million in 1996
compared with $801.0 million in 1995 and $793.5 million in 1994. The increase in
cost of energy purchased for 1996 compared to 1995 is due to higher prices for
natural gas and the initial sales of electricity. The increase in cost of energy
purchased for 1995 compared to 1994 reflects higher requirements for increased
marketing activities and production of natural gas liquids, partially offset by
lower average prices for natural gas.
Other operating expenses were $173.7 million in 1996, $291.6 million in
1995, and $183.7 million in 1994. Other operating expenses for 1995 include a
charge of $95.1 million for impairment of assets. The decrease in other
operating expenses for 1996 compared to 1995, excluding the charge in 1995, is
due primarily to lower depreciation and depletion expense reflecting lower
depletion rates and a decrease in natural gas production. The increase in other
operating expenses for 1995 compared to 1994, excluding the charge in 1995, is
due primarily to increased depreciation and depletion expense reflecting higher
natural gas production.
Operating income was $52.0 million for 1996 compared with an operating
loss of $32.7 million in 1995 and operating income of $34.9 million for 1994.
The increase in operating income for 1996 compared to 1995, excluding the effect
of nonrecurring items in 1995, is due to lower depreciation and depletion
expense (55%), higher prices for produced natural gas (45%), and higher margins
from sale of natural gas liquids (35%). These items were partially offset by
lower gas production (30%) and lower margins for marketed natural gas (25%). The
decrease in operating income for 1995 compared to 1994, excluding the effect of
nonrecurring items in 1995, is due to lower average selling prices for produced
natural gas (100%) and lower margins for marketed natural gas (25%), partially
offset by higher natural gas production (20%).
The 1997 capital expenditure program of $121.7 million for supply and
logistics includes $107.8 million for exploration and production activities
including $23.2 million for development of Appalachian holdings, $17.1 million
for the Rocky Mountain area, and $67.5 million for drilling in the Gulf of
Mexico and Gulf Coast Region. Market and price trends for natural gas and oil
will continue to be the principal factors for the economic justification of
drilling investments. The 1997 capital expenditure program also includes $5.0
million for additions to the LIG pipeline system and $8.9 million for other
items.
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONTINUED)
UTILITIES
Utilities operations are comprised of the sale and transportation of
natural gas to retail customers at state-regulated rates, interstate
transportation and storage of natural gas subject to federal regulation and the
marketing of natural gas. Revenues were $507.4 million in 1996 compared with
$441.7 million in 1995 and $446.8 million in 1994. Revenues for 1995 include
$4.8 million related to the Columbia bankruptcy settlement, as described in Note
E to the consolidated financial statements. The increase in revenues for 1996
compared to 1995, excluding the effect of the settlement in 1995, is due to a
48% increase in sales to industrial and utility customers, the effect of
commercial customers switching from transportation service to gas sales, a 55%
increase in the average selling prices for marketed natural gas and increased
retail gas sales reflecting 4% colder weather. The decrease in revenues for 1995
compared to 1994, excluding the effect of the settlement in 1995, is due
primarily to the effect of commercial customers switching from gas sales to
transportation service.
UTILITIES 1996 1995 1994
- - ------------------------------------------------------------------------------
OPERATING REVENUES (THOUSANDS):
Residential Gas Sales.............. $ 271,636 $ 266,855 $ 265,356
Commercial Gas Sales............... 68,408 39,331 66,956
Industrial and Utility Gas Sales... 80,833 37,228 31,924
Marketed Gas Sales................. 31,172 21,627 21,244
Transportation Service............. 38,167 52,731 42,198
Storage Service.................... 7,305 8,490 9,506
Other.............................. 9,920 15,470 9,602
- - ------------------------------------------------------------------------------
Total Revenues................. $ 507,441 $ 441,732 $ 446,786
==============================================================================
SALES QUANTITIES (MMCF):
Residential Gas Sales.............. 30,549 29,494 29,570
Commercial Gas Sales............... 10,505 4,494 9,681
Industrial and Utility Gas Sales... 26,647 17,991 12,815
Marketed Gas Sales................. 10,110 10,884 9,072
Transportation Deliveries.......... 70,345 72,265 62,615
Heating Degree Days (Normal - 5,968) 5,978 5,748 5,607
Cost of energy purchased amounted to $246.3 million in 1996, $180.8
million in 1995, and $190.7 million in 1994. The increase in cost of energy
purchased for 1996 compared to 1995 reflects commercial customers switching from
transportation service to gas sales and higher industrial and utility gas sales.
The decrease in gas costs for 1995 compared to 1994 is due to the effect of
commercial customers switching from gas sales to transportation service,
partially offset by higher industrial and utility gas sales.
Other operating expenses amounted to $171.8 million in 1996, $205.3
million in 1995, and $180.8 million in 1994. Other operating expenses for 1995
include a charge of $25.6 million for impairment of assets. The decrease in
other operating expenses for 1996 compared to 1995, excluding the charge in
1995, reflect savings from reengineering efforts that began in 1995. Other
operating expenses for 1995 compared to 1994, excluding the charge, remained
substantially the same.
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONTINUED)
UTILITIES (CONTINUED)
Operating income was $89.3 million in 1996 compared with $55.6 million in
1995 and $75.3 million in 1994. The increase in operating income for 1996
compared to 1995, excluding the charge for impairment of assets and Columbia
settlement in 1995, is due primarily to lower operating expenses (40%), higher
margins from marketed gas sales (25%) and higher distribution throughput
reflecting colder weather (15%). Operating income for 1995, excluding the charge
for impairment of assets and Columbia settlement, remained substantially the
same as the 1994 results.
The 1997 capital expenditure program of $40.4 million for utilities
includes $14.3 million for the distribution operations, $9.7 million for
interstate pipeline operations and $16.4 million for corporate information
systems and other items.
SERVICES
Services operations are comprised of marketing of natural gas,
cogeneration development, water efficiency and program development, performance
contracting, and central facility plant operations. This operation was formed by
combining certain of the Company's natural gas marketing activities with the
operations of Independent Energy Company, Conogen, Inc. and Pequod Associates,
Inc. which were acquired in 1995 and 1996. In February 1997, the Company also
acquired Scallop Thermal Management, Inc. Operating revenues of $172.3 million
in 1996 include $163.5 million from the sale and marketing of natural gas, and
$8.8 million from cogeneration development and performance contracting.
Cost of energy purchased amounted to $160.0 million for 1996 and other
operating expenses, including operating, start-up and development costs for the
new segment, were $24.8 million for 1996. Operating results were a loss of $12.5
million reflecting the start-up and development costs incurred in 1996.
The 1997 capital expenditure program for services is $25.0 million to be
used for energy related projects.
CAPITAL RESOURCES AND LIQUIDITY
OPERATING ACTIVITIES
Cash required for operations is impacted primarily by the seasonal nature
of the Company's natural gas distribution operations and volatility of oil and
gas commodity prices. 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>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONTINUED)
CAPITAL RESOURCES AND LIQUIDITY (CONTINUED)
The Company uses exchange-traded natural gas, crude oil and propane
futures contracts and options and over-the-counter natural gas and crude oil
swap agreements and options to hedge exposures to energy price changes. See Note
M to the consolidated financial statements.
INVESTING ACTIVITIES
The Company's business requires major ongoing expenditures for
replacements, improvements, and additions to its utility plant and continuing
development and expansion of its resource production activities. Such
expenditures during 1996 were $110.3 million. A total of $187.1 million has been
authorized for the 1997 capital expenditure program.
Short-term loans are also used as interim financing for a portion of
capital expenditures. The Company expects to finance its 1997 capital
expenditures with cash generated from operations and temporarily with short-term
loans.
Capital expenditures, including acquisitions, totaled about $814 million
during the five-year period ended December 31, 1996, of which 64% was financed
from operations.
FINANCING ACTIVITIES
The Company has adequate borrowing capacity to meet its financing
requirements. Bank loans and commercial paper, supported by available credit,
are used to meet short-term financing requirements. Interest rates on these
short-term loans ranged from 5.15% to 5.77% percent during 1996. At December 31,
1996, $199.3 million of commercial paper and $5.6 million of bank loans were
outstanding at an average annual interest rate of 5.44%. The Company maintains 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. Adequate credit is expected to continue to be available in the future.
During 1996, the Company refinanced the $75 million of 8 1/4% Debentures
that matured on July 1, 1996 and $69.1 million of the Company's 9.9% Debentures
due April 15, 2013. The 9.9% Debentures were redeemed through a tender offer
that commenced in June 1996. The refinancing of these amounts was funded through
issuance of $150 million of 7 3/4% Debentures due July 15, 2026. There is $100
million remaining available under a shelf registration filed with the Securities
and Exchange Commission in June 1996.
RATE REGULATION
The local distribution operations of Equitable Gas Company are subject to
rate regulation by state regulatory commissions in Pennsylvania, West Virginia
and Kentucky. In Pennsylvania, where approximately 95% of its revenues are
derived, Equitable Gas has been able to sustain current base rates for customers
since 1991. In February, 1997, Equitable Gas filed a request with the
Pennsylvania Public Utility Commission (PUC) for a $28 million annual increase
in base rates. Included in the request is a proposal for
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONTINUED)
CAPITAL RESOURCES AND LIQUIDITY (CONTINUED)
unbundling of the local distribution services to enable customers to choose
their gas supplier. Gas purchased from another supplier would continue to be
transported and delivered by Equitable Gas at regulated rates. The approval of
the new rates, and the level of annual increase, will be subject to final
approval by the PUC. Under statutory rules for regulatory proceedings, the PUC
may delay implementation of the new rates until December 1, 1997.
The Company's three interstate pipeline companies are subject to rate
regulation by the Federal Energy Regulatory Commission (FERC). Under present
rates, a majority of the annual costs are recovered through fixed charges to
customers. The restructuring of rates pursuant to FERC Order 636 for Equitrans
and Kentucky West Virginia Gas Company was completed in 1994 and 1993,
respectively. Equitrans is required to file a section 4(e) rate proceeding to be
effective August 1, 1997.
Accounting for the operations of the Company's distribution and interstate
pipeline operations is in accordance with the provisions of Statement of
Financial Accounting Standards No. 71 "Accounting for the Effects of Certain
Types of Regulation". As described in Note B to the consolidated financial
statements, regulatory assets and liabilities are recorded to reflect future
collections or payments through the regulatory process. The Company believes
that it will continue to be subject to rate regulation that will provide for the
recovery of deferred costs.
FEDERAL INCOME TAX PROVISIONS
Cash flow has been affected by the Alternative Minimum Tax (AMT) since
1988. The Company has incurred an AMT liability in each of the years 1988
through 1996 due to the nonconventional fuels tax credits. Although AMT payments
can be carried forward indefinitely and applied to income tax liabilities in
future periods, they reduce cash generated from operations. At December 31,
1996, the Company has available $72.5 million of AMT credit carryforwards. The
impact of AMT on future cash flow will depend on the level of taxable income.
AMT is not expected to affect the Company's ability to finance future capital
requirements.
Under current law, wells drilled after 1992 do not qualify for the
nonconventional fuels tax credit. While production from qualified wells drilled
in the Appalachian area will generate tax credits through the year 2002, it is
anticipated that the amount of such credits will decline as the related reserves
are depleted. In addition, in 1995, the Company sold an interest in properties
producing nonconventional fuels, as described in Note R to the consolidated
financial statements which will significantly reduce the generation of credits
in the future. Therefore, the Company expects accelerated utilization of AMT
credit carryforwards. The credits recorded in 1996, 1995, and 1994 reduced the
Company's federal income tax provisions by $1.3 million, $13.1 million, and
$16.4 million, respectively.
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (CONTINUED)
ENVIRONMENTAL MATTERS
Management does not know of any environmental liabilities that will have a
material effect on the Company's financial position or results of operations.
The Company has identified situations that require remedial action for which
$3.2 million is accrued at December 31, 1996. Environmental matters are
described in Note T to the consolidated financial statements.
BALANCE SHEET CHANGES
The increase in accounts receivable and accounts payable is due primarily
to higher gas marketing activity. The increase in deferred purchased gas cost is
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 change in
deferred income taxes reflected in current assets and liabilities is due to the
increase in deferred purchased gas costs. The goodwill reflected in the 1996
balance sheet is the result of acquisitions as described in Note S to the
consolidated financial statements.
AUDIT COMMITTEE
The Audit Committee, composed entirely of outside directors, meets
periodically with the Company's independent auditors, its internal auditor, and
management to review the Company's financial statements and the results of audit
activities. The Audit Committee, in turn, reports to the Board of Directors on
the results of its review and recommends the selection of independent auditors.
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
PAGE REFERENCE
Report of Independent Auditors 25
Statements of Consolidated Income
for each of the three years in
the period ended December 31, 1996 26
Statements of Consolidated Cash Flows
for each of the three years in the
period ended December 31, 1996 27
Consolidated Balance Sheets
December 31, 1996 and 1995 28 - 29
Statements of Common Stockholders'
Equity for each of the three
years in the period ended
December 31, 1996 30
Long-term Debt, December 31,
1996 and 1995 31
Notes to Consolidated Financial
Statements 32 - 55
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholders
Equitable Resources, Inc.
We have audited the accompanying consolidated balance sheets and statements
of long-term debt of Equitable Resources, Inc., and Subsidiaries at December 31,
1996 and 1995, and the related consolidated statements of income, common
stockholders' equity and cash flows for each of the three years in the period
ended December 31, 1996. Our audits also included the financial statement
schedule listed in the Index at Item 14(a). These financial statements and
schedule are the responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements and schedule based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Equitable
Resources, Inc., and Subsidiaries at December 31, 1996 and 1995, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1996 in conformity with generally
accepted accounting principles. Also, in our opinion, the related financial
statement schedule, when considered in relation to the basic financial
statements taken as a whole, presents fairly in all material respects the
information set forth therein.
As described in Note C to the consolidated financial statements, the
Company adopted the provisions of Statement of Financial Accounting Standards
No. 121, "Accounting for the Impairment of Long-Lived Assets," in 1995.
s/ Ernst & Young LLP
------------------------------
Ernst & Young LLP
Pittsburgh, Pennsylvania
February 19, 1997
<PAGE>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
STATEMENTS OF CONSOLIDATED INCOME
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
1996 1995 1994
------------------------------------------------
(Thousands Except Per Share Amounts)
<S> <C> <C> <C>
Operating Revenues $ 1,861,799 $ 1,425,990 $ 1,397,280
Cost of Energy Purchased 1,368,156 911,357 926,905
--------------- -------------- --------------
Net operating revenues 493,643 514,633 470,375
--------------- -------------- --------------
Operating Expenses:
Operation 213,773 198,502 192,799
Maintenance 26,544 26,635 31,737
Depreciation and depletion 82,381 104,625 93,347
Impairment of assets - 121,081 -
Taxes other than income 42,157 41,838 42,244
--------------- -------------- --------------
Total operating expenses 364,855 492,681 360,127
--------------- -------------- --------------
Operating Income 128,788 21,952 110,248
Other Income 2,998 387 3,163
Interest Charges 41,825 50,098 43,905
--------------- -------------- --------------
Income (Loss) Before Income Taxes 89,961 (27,759) 69,506
Income Taxes (Benefit) 30,582 (29,307) 8,777
--------------- --------------- --------------
Net Income $ 59,379 $ 1,548 $ 60,729
=============== ============== ==============
Average Common Shares Outstanding 35,188 34,793 34,509
=============== ============== ==============
Earnings Per Share of Common Stock $ 1.69 $ .04 $ 1.76
=============== ============== ==============
See notes to consolidated financial statements
pages 32 to 55, inclusive
</TABLE>
<PAGE>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
STATEMENTS OF CONSOLIDATED CASH FLOWS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
1996 1995 1994
------------------------------------
(Thousands)
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net income $ 59,379 $ 1,548 $ 60,729
---------- ---------- ----------
Adjustments to reconcile net income to net cash
provided by operating activities:
Impairment of assets - 121,081 -
Depreciation and depletion 82,381 104,625 93,347
Deferred income taxes (benefits) 26,091 (74,348) (5,059)
Other - net 1,058 (767) 1,566
Changes in other assets and liabilities:
Accounts receivable and unbilled revenues (47,909) (74,275) 723
Gas stored underground (9,575) 5,179 2,958
Material and supplies (5,935) 154 (615)
Deferred purchased gas cost (49,919) 14,730 (7,742)
Prepaid expenses and other (10,281) (8,754) (9,592)
Regulatory assets 379 1,810 (1,363)
Accounts payable 49,784 58,791 (20,414)
Accrued taxes 2,538 (1,481) 4,230
Refunds due customers (1,114) (6,252) 8,049
Deferred revenue (22,200) 129,874 -
Other - net (9,109) 7,887 8,318
---------- ---------- ----------
Total adjustments 6,189 278,254 74,406
---------- ---------- ----------
Net cash provided by operating activities 65,568 279,802 135,135
---------- ---------- ----------
Cash Flows from Investing Activities:
Capital expenditures (110,284) (118,112) (146,174)
Proceeds from sale of property 4,180 24,610 1,195
---------- ---------- ----------
Net cash used in investing activities (106,104) (93,502) (144,979)
---------- ---------- ----------
Cash Flows from Financing Activities:
Issuance of common stock 2,306 2,756 1,791
Purchase of treasury stock (33) (240) (395)
Dividends paid (41,548) (41,098) (39,686)
Proceeds from issuance of long-term debt 144,919 17,836 43,083
Repayments and retirements of long-term debt (150,440) (24,500) (1,971)
Increase (decrease) in short-term loans 69,900 (134,300) 15,400
---------- ---------- ----------
Net cash provided (used) by financing activities 25,104 (179,546) 18,222
---------- ---------- ----------
Net (Decrease) Increase in Cash and Cash Equivalents (15,432) 6,754 8,378
Cash and Cash Equivalents at Beginning of Year 30,169 23,415 15,037
---------- ---------- ----------
Cash and Cash Equivalents at End of Year $ 14,737 $ 30,169 $ 23,415
========== ========== ==========
Cash Paid During the Year for:
Interest (net of amount capitalized) $ 43,025 $ 46,359 $ 40,105
========== ========== ==========
Income taxes $ 10,456 $ 41,272 $ 13,098
========== ========== ==========
See notes to consolidated financial statements
pages 32 to 55, inclusive
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS, DECEMBER 31, 1996 AND 1995
ASSETS
1996 1995
--------------------------------
(Thousands)
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 14,737 $ 30,169
Accounts receivable (less accumulated provision for
doubtful accounts: 1996, $10,714; 1995, $10,539) 296,175 240,846
Unbilled revenues 24,157 31,752
Gas stored underground - current inventory 19,497 9,922
Material and supplies 18,512 12,577
Deferred purchased gas cost 60,079 10,160
Deferred income taxes - 1,505
Prepaid expenses and other 52,604 42,323
------------- -------------
Total current assets 485,761 379,254
------------- -------------
Property, Plant and Equipment:
Supply & Logistics (successful
efforts method) 1,220,756 1,164,390
Utilities 988,425 957,119
Services 1,810 139
------------- -------------
Total property, plant and equipment 2,210,991 2,121,648
Less accumulated depreciation and depletion 731,306 664,065
------------- -------------
Net property, plant and equipment 1,479,685 1,457,583
------------- -------------
Other Assets:
Regulatory assets 73,150 85,241
Goodwill 8,396 -
Other 49,307 41,235
------------- -------------
Total other assets 130,853 126,476
------------- -------------
Total $ 2,096,299 $ 1,963,313
============= =============
See notes to consolidated financial statements
pages 32 to 55, inclusive
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS, DECEMBER 31, 1996 AND 1995
LIABILITIES AND STOCKHOLDERS' EQUITY
1996 1995
-------------------------------
(Thousands)
<S> <C> <C>
Current Liabilities:
Short-term loans $ 204,900 $ 135,000
Accounts payable 231,969 182,185
Accrued taxes 20,645 18,107
Accrued interest 11,852 14,842
Refunds due customers 14,889 16,003
Customer credit balances 7,051 9,759
Deferred income taxes 19,009 -
Other 10,099 14,888
------------- -------------
Total current liabilities 520,414 390,784
------------- -------------
Long-Term Debt 422,112 415,527
------------- -------------
Deferred and Other Credits:
Deferred income taxes 260,700 265,737
Deferred investment tax credits 19,892 20,991
Deferred revenue 107,674 129,874
Other 23,224 25,321
------------- -------------
Total deferred and other credits 411,490 441,923
------------- -------------
Commitments and Contingencies - -
------------- -------------
Common Stockholders' Equity 742,283 715,079
------------- -------------
Total $ 2,096,299 $ 1,963,313
============= =============
See notes to consolidated financial statements
pages 32 to 55, inclusive
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
STATEMENTS OF COMMON STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
Common Stock (a)
------------------------ Foreign Common
Shares No Retained Currency Stockholders'
Outstanding Par Value Earnings Translation Equity
---------------------------------------------------------------
(Thousands)
<S> <C> <C> <C> <C> <C>
Balance, January 1, 1994 34,465 $208,178 $520,433 $ (581) $ 728,030
Net income for the year 1994 60,729
Dividends ($1.15 per share) (39,686)
Foreign currency translation (923)
Stock issued:
Conversion of 9 1/2% debentures 31 345
Restricted stock option plan 8 313
Dividend reinvestment plan 47 1,504
Treasury stock (10) (310)
------ -------- ------- -------- ---------
Balance, December 31, 1994 (b) 34,541 210,030 541,476 (1,504) 750,002
Net income for the year 1995 1,548
Dividends ($1.18 per share) (41,098)
Foreign currency translation 366
Adjustment for Independent Energy
Corporation pooling of interests 233 26 110
Stock issued:
Conversion of 9 1/2% debentures 146 1,611
Restricted stock option plan 43 1,232
Dividend reinvestment plan 52 1,524
Treasury stock (8) (242)
------ -------- ------- -------- ---------
Balance, December 31, 1995 (b) 35,007 214,181 502,036 (1,138) 715,079
Net income for the year 1996 59,379
Dividends ($1.18 per share) (41,548)
Foreign currency translation (83)
Acquisition of subsidiary 239 7,000
Stock issued:
Conversion of 9 1/2% debentures 16 178
Restricted stock option plan 36 855
Dividend reinvestment plan 49 1,456
Treasury stock (1) (33)
------ -------- -------- -------- ---------
Balance, December 31, 1996 (b)(c)(d) 35,346 $223,637 $519,867 $ (1,221) $ 742,283
====== ======== ======== ======== =========
<FN>
(a) Shares authorized: Common - 80,000,000 shares, Preferred - 3,000,000 shares.
(b) Net of treasury stock: 1996 - 169,000 shares ($4,023,000); 1995 - 407,000 shares
($9,673,000); 1994 - 632,000 shares ($14,933,000).
c) A total of 2,508,000 shares of authorized but unissued common stock was reserved for the conversion of the
9 1/2% convertible subordinated debentures, for issuance under the key employee restricted stock option and
stock appreciation rights incentive compensation plan, the long-term incentive plan, the non-employee directors'
stock incentive plan, and for issuance under the Company's dividend reinvestment and stock purchase plan.
An additional 8,000,000 shares of the Company's authorized but unissued common stock has been reserved for possible
use in connection with future acquisitions.
(d) Retained earnings of $387,188,000 is available for dividends on, or purchase of, common stock pursuant to
restrictions imposed by indentures securing long-term debt.
</FN>
See notes to consolidated financial statements
pages 32 to 55, inclusive
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
LONG-TERM DEBT
DECEMBER 31, 1996 AND 1995
Annual Debt Maturities After
Maturities One Year
-------------------------------------------------
1996 1995 1996 1995
-------------------------------------------------
(Thousands)
<S> <C> <C> <C> <C>
8 1/4% Debentures, due July 1, 1996 (a) $ - $ - $ - $ 75,000
7 1/2% Debentures, due July 1, 1999
($75,000 principal amount, net of
unamortized original issue discount) (b) - - 72,205 71,322
9 1/2% Convertible subordinated
debentures, due January 15, 2006 - - 527 705
9.9% Debentures, due April 15, 2013 (c)(d) - - 5,880 75,000
7 3/4% Debentures, due July 15, 2026 - - 150,000 -
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 - - 75,500 75,500
6.8% to 7.6% Series C, due 2007 thru 2018 - - 18,000 18,000
-------- -------- ----------- ------------
Total $ - $ - $ 422,112 $ 415,527
======== ======== =========== ============
<FN>
(a) 8 1/4% Debentures were retired with proceeds from issuance of long-term
debt. See Note L to the consolidated financial statements.
(b) Not redeemable prior to maturity.
(c) $69,120,000 retired as of December 31, 1996 through tender offer. See Note L to the
consolidated financial statements.
(d) Annual sinking fund payments of $3,750,000 are required beginning in 1999.
</FN>
See notes to consolidated financial statements
pages 32 to 55, inclusive
</TABLE>
<PAGE>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996
A. Summary of Significant Accounting Policies
(1) PRINCIPLES OF CONSOLIDATION: The consolidated financial statements
include the accounts of Equitable Resources, Inc., and Subsidiaries (the
"Company" or "Companies"). All subsidiaries are 100% owned.
(2) PROPERTIES, DEPRECIATION AND DEPLETION: The cost of property
additions, replacements and improvements capitalized includes labor, material
and overhead. The cost of property retired, plus removal costs less salvage, is
charged to accumulated depreciation.
Depreciation for financial reporting purposes is provided on the
straight-line method at composite rates based on estimated service lives, except
for most gas and oil production properties as explained below. Service lives
range from 5 to 70 years. Depreciation rates are based on periodic studies.
The Company uses the successful efforts method of accounting for
exploration and production activities. Under this method, the cost of productive
wells and development dry holes, as well as productive acreage, are capitalized
and depleted on the unit-of-production method. Service lives for gas and oil
wells range from 3 to 35 years.
(3) ALLOWANCE FOR FUNDS USED DURING CONSTRUCTION: The Federal Energy
Regulatory Commission (FERC) prescribes a formula to be used for computing
overhead allowances for funds used during construction (AFC). AFC applicable to
equity funds capitalized is included in other income and amounted to $.9 million
in 1996, $1.0 million in 1995 and $.9 million in 1994. AFC applicable to
borrowed funds, as well as other interest capitalized for the nonregulated
companies, is applied as a reduction of interest charges and amounted to $2.6
million in 1996, $2.5 million in 1995 and $2.1 million in 1994.
(4) INVENTORIES: Inventories are stated at cost which is below market. Gas
stored underground--current inventory is stated at cost under the average cost
method. Material and supplies are stated generally at average cost.
(5) INCOME TAXES: The Companies file a consolidated federal income tax
return. The current provision for income taxes represents amounts paid or
payable. Deferred income tax assets and liabilities are determined based on
differences between financial reporting and tax bases of assets and liabilities.
Where deferred tax liabilities will be passed through to customers in regulated
rates, the Companies establish a corresponding regulatory asset for the increase
in future revenues that will result when the temporary differences reverse.
Investment tax credits realized in prior years were deferred and are being
amortized over the estimated service lives of the related properties where
required by ratemaking rules.
<PAGE>
A. Summary of Significant Accounting Policies (Continued)
(6) DEFERRED PURCHASED GAS COST: Where permitted by regulatory authority
under purchased gas adjustment clauses or similar tariff provisions, the Company
defers the difference between purchased gas cost, less refunds, and the billing
of such cost and amortizes the deferral over subsequent periods in which
billings either recover or repay such amounts.
(7) REGULATORY ASSETS: Certain costs, which will be passed through to
customers under ratemaking rules for regulated operations, are deferred by the
Company as regulatory assets. The amounts deferred relate primarily to the
accounting for income taxes.
(8) DERIVATIVE FINANCIAL INSTRUMENTS: The Company uses exchange-traded
natural gas and crude oil futures contracts and options and over-the-counter
(OTC) natural gas and crude oil swap agreements and options to hedge exposures
to energy price changes. Exchange-traded instruments are generally settled with
off-setting positions but may be settled by delivery of commodities. OTC
arrangements require settlement in cash. The margin accounts for exchange-traded
futures contracts, which reflect daily settlements as market values change, are
recorded in other current assets. Premiums on all options contracts are
initially recorded in other current assets based on the amount exchanged. The
Company sells options to reduce the overall cost of hedging. Unrealized losses
on sold options are deferred to the extent of unamortized premiums. The fair
values of swap agreements are generally recognized only when settled. Changes in
market value of derivative financial instruments which qualify as hedges of firm
commitments or anticipated transactions are deferred and recognized in net
operating revenues when hedged transactions occur. Cash flows from derivatives
accounted for as hedges are considered operating activities. The Company also
uses exchange-traded natural gas futures contracts for speculative trading
purposes. Realized and unrealized gains and losses on these contracts are
recorded in other income in the period in which the changes occur.
(9) GOODWILL: Goodwill consists of costs in excess of the net assets
of businesses acquired. Goodwill is amortized on a straight-line basis over
a period of twenty years.
(10)STOCK OPTIONS: The Company has elected to follow Accounting Principles
Board Opinion No. 25, "Accounting for Stock Issued to Employees" and related
interpretations in accounting for stock options. No compensation expense is
recognized on stock options because the exercise price equals the market price
of the underlying stock on the date of grant. Had compensation cost for the
Company's stock option plans been determined based on the fair values at the
grant dates as prescribed by Statement of Financial Accounting Standards (SFAS)
No. 123, "Accounting for Stock-Based Compensation," the effect on net income and
earnings per share would not have been material.
<PAGE>
A. Summary of Significant Accounting Policies (Continued)
(11)REVENUE RECOGNITION: Revenues for regulated gas sales to retail
customers are recognized as service is rendered, including an accrual for
unbilled revenues from the date of each meter reading to the end of the
accounting period. Revenue is recognized for exploration and production
activities when deliveries of natural gas, oil and natural gas liquids are made.
Revenue from natural gas transportation and storage activities are recognized in
the period service is provided. Revenues from energy marketing activities are
recognized when deliveries occur.
(12)USE OF ESTIMATES: The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.
(13)CASH FLOWS: The Company considers all highly liquid investments with a
maturity of three months or less when purchased to be cash equivalents.
(14)RECLASSIFICATION: Certain amounts contained in prior year comparative
information have been reclassified to conform with the 1996 presentation.
B. Regulatory Assets and Liabilities
The Company's distribution and interstate pipelines are subject to rate
regulation by state and federal regulatory commissions. Accounting for these
operations is in accordance with the provisions of Statement of Financial
Accounting Standards No. 71 "Accounting for the Effects of Certain Types of
Regulation". The Company records regulatory assets and liabilities to reflect
future collections or payments through the regulatory process. The Company
believes that it will continue to be subject to rate regulation that will
provide for the recovery of deferred costs. Regulatory assets (liabilities)
reflected in the consolidated balance sheets are as follows:
December 31,
1996 1995
------------------------
(Thousands)
Deferred purchase gas costs.................... $ 60,729 $ 10,160
Unamortized loss on reacquired debt
included in other assets................... 10,654 3,013
Regulatory assets:
Deferred income tax accounting............. 64,132 76,122
Postretirement benefits other than pensions 4,062 3,909
Other...................................... 4,956 5,210
Estimated refunds due customers................ (14,889) (16,003)
Deferred investment tax credits................ (19,892) (20,991)
<PAGE>
C. Impairment of Assets
In 1995, the Company evaluated the carrying value of long-lived assets for
impairment of value pursuant to the methodology prescribed in Statement of
Financial Accounting Standards No. 121 "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed of." Primarily as a
result of the sustained decrease in gas and oil prices, the Company recognized a
write-down in the carrying value of assets of $121.1 million which decreased net
income by $74.2 million. The write-down included $95.1 million for exploration
and production properties and intrastate transmission facilities included in the
supply and logistics segment and $26.0 million for information systems, storage
development projects, and other assets reflected in the utilities segment. The
fair value of the assets was determined based upon expected discounted future
net cash flows or a comparison with market values when available.
D. Direct Billing Settlements
Kentucky West Virginia Gas Company received FERC approval of settlement
agreements with all customers for the direct billing to recover the higher
Natural Gas Policy Act (NGPA) prices, which the FERC had denied on natural gas
produced from exploration and production properties between 1978 and 1983. The
portion of the settlement with Equitable Gas Division has been subject to
Pennsylvania Public Utility Commission (PUC) review. The PUC approved Equitable
Gas Company's collection of $7.8 million in September 1996, $18.8 million in
September 1995 and $7.8 million in September 1994 related to the direct billing
settlement. The 1995 amount includes $11.0 million for accelerated collection of
amounts that would have otherwise been subject to approval by the PUC, and
recognized in income, in later years. As a result of the PUC approvals, net
income for 1996 includes approximately $4.7 million, $11.3 million for 1995 and
$4.7 million for 1994 related to the settlement. Approximately $10.2 million
from the settlement remains to be recovered in future gas costs filings with the
PUC over the next two years.
In November 1995, Kentucky West Virginia Gas Company received $13.8
million from Columbia Gas Transmission Company (Columbia) as settlement, in
Columbia's bankruptcy proceeding, of Kentucky West's claim for $19 million
related to the direct billing settlements. Net income for 1995 includes $8.9
million related to the settlement.
E. Columbia Gas Transmission Bankruptcy Settlement
In addition to the direct billing settlement described above, the Company
had various claims against Columbia for abrogation of contracts to purchase gas
from the Company and collection of FERC Order 636 transition costs. In November
1995, the Company received $31.2 million in Columbia's bankruptcy settlement
related to these items which increased net income for 1995 by $20.2 million.
<PAGE>
F. Income Taxes
The following table summarizes the source and tax effects of temporary
differences between financial reporting and tax bases of assets and liabilities:
December 31,
-----------------------
1996 1995
-----------------------
(Thousands)
Deferred tax liabilities (assets):
Exploration and development costs
expensed for income tax reporting........ $ 63,435 $ 59,321
Tax depreciation in excess of
book depreciation ....................... $ 251,951 257,642
Regulatory temporary differences........... 28,467 33,815
Deferred purchased gas cost................ 21,210 1,308
Alternative minimum tax.................... (72,470) (74,829)
Investment tax credit...................... (7,997) (8,438)
Other...................................... (4,887) (4,587)
--------- ---------
Total (including amounts classified as
current liabilities of $19,009 for 1996
and current assets of $1,505 for 1995). $ 279,709 $ 264,232
========= =========
As of December 31, 1996 and 1995, $64.1 million and $76.1 million,
respectively, of the net deferred tax liabilities are related to rate-regulated
operations and have been deferred as regulatory assets.
Income tax expense (benefit) is summarized as follows:
Years Ended December 31,
----------------------------------
1996 1995 1994
----------------------------------
(Thousands)
Current:
Federal........................ $ 3,953 $ 36,681 $11,196
State.......................... 538 8,360 2,640
Deferred:
Federal........................ 22,905 (56,953) (6,848)
State.......................... 3,186 (17,395) 1,789
-------- ---------- -------
Total........................ $ 30,582 $ (29,307) $ 8,777
======== ========== =======
<PAGE>
F. Income Taxes (Continued)
Provisions for income taxes are less than amounts computed at the federal
statutory rate of 35% on pretax income. The reasons for the difference are
summarized as follows:
Years Ended December 31,
-----------------------------------
1996 1995 1994
-----------------------------------
(Thousands)
Tax at statutory rate........... $ 31,487 $ (9,716) $ 24,327
State income taxes.............. 1,913 (5,866) 3,069
Nonconventional fuels tax credit (1,299) (13,114) (16,442)
Other........................... (1,519) (611) (2,177)
-------- -------- --------
Income tax expense (benefit)... $ 30,582 $(29,307) $ 8,777
======= ======== ========
Effective tax rate (benefit).... 34.0% (105.6)% 12.6%
==== ====== ====
The consolidated federal income tax liability of the Companies has been
settled through 1994.
The Company has available $72.5 million of alternative minimum tax credit
carryforward which has no expiration date. In addition, the Company has net
operating loss carryforwards for federal income tax purposes of $2.2 million
which will expire in 2003. The net operating loss carryforwards apply to a
subsidiary of Louisiana Intrastate Gas.
Amortization of deferred investment tax credits amounted to $1.1 million
for 1996, 1995 and 1994.
G. Employee Pension Benefits
The Companies have several trusteed retirement plans covering
substantially all employees. The Companies' annual contributions to the plans
are based on a 25-year funding level. Plans covering union members generally
provide benefits of stated amounts for each year of service. Plans covering
salaried employees use a benefit formula which is based upon employee
compensation and years of service to determine benefits to be provided. Plan
assets consist principally of equity and debt securities.
<PAGE>
G. Employee Pension Benefits (Continued)
The following table sets forth the plans' funded status and amounts
recognized in the Company's consolidated balance sheets:
December 31,
----------------------
1996 1995
----------------------
(Thousands)
Actuarial present value of benefit obligations:
Vested benefit obligation.................. $ 124,477 $ 127,758
========== ==========
Accumulated benefit obligation............. $ 130,416 $ 131,405
========== ==========
Market value of plan assets................. $ 165,360 $ 159,607
Projected benefit obligation................ 137,477 146,078
---------- ----------
Excess of plan assets over projected
benefit obligation......................... 27,883 13,529
Unrecognized net asset...................... (1,833) (2,208)
Unrecognized net gain....................... (28,871) (20,194)
Unrecognized prior service cost............. 11,124 9,864
---------- ----------
Prepaid pension cost recognized in
the consolidated balance sheets............ $ 8,303 $ 991
========== ==========
At year-end the discount rate used in determining the actuarial present
value of benefit obligations was 7 3/4% for 1996, 7 1/2% for 1995 and 8 1/4% for
1994. The assumed rate of increase in compensation levels was 4 1/2% for all
three years.
The Companies' pension cost, using a 9% average rate of return on plan
assets, comprised the following:
Years Ended December 31,
--------------------------------
1996 1995 1994
--------------------------------
(Thousands)
Service cost benefits earned
during the period................ $ 4,053 $ 3,452 $ 3,916
Interest cost on projected benefit
obligation....................... 11,197 11,165 10,752
Actual (return) loss on assets..... (26,828) (34,054) 2,757
Net amortization and deferral...... 12,756 19,806 (14,680)
Gain on curtailment................ (7,370) - -
--------- -------- --------
Net periodic pension (benefit) cost $ (6,192) $ 369 $ 2,745
========= ======== ========
In 1996, the Company recognized a gain of $7.4 million for the curtailment
of the defined benefit pension plan for certain non-utility employees. Net
income for 1996 includes $4.4 million related to the curtailment. As of January
1, 1997, the Company established a defined contribution plan for these employees
that will provide a base Company contribution.
<PAGE>
H. Other Postretirement Benefits
In addition to providing pension benefits, the Companies provide certain
health care and life insurance benefits for retired employees and their
dependents. In 1996, the Company implemented changes in the postretirement
medical and life insurance benefits for all nonunion employees. Changes for
represented employees are subject to collective bargaining. Benefits for
employees in the supply and logistics and services segments were eliminated. For
all other nonunion employees, the contributory portion of medical premiums to be
paid by employees after retirement was changed to a graduated scale based on
years of service and the maximum amount of non-contributory life insurance
available at age 69 was reduced. The effect of these changes reduced the
transition obligation by $29.7 million. The Company's transition obligation is
being amortized through 2012.
In determining the accumulated postretirement benefit obligation at
December 31, 1996, the Company used a beginning inflation factor ranging from 6%
to 8%, depending on the level of coverage, decreasing gradually to 4 1/4% to 4
3/4% after 4 to 8 years and a discount rate of 7 3/4%. At December 31, 1995, the
beginning inflation factor was 10% decreasing gradually to 4 3/4% after 14 years
and the discount rate was 7 1/2%. The following summarizes the status of the
Company's accrued postretirement benefit costs (OPEBS):
December 31,
---------------------------
1996 1995
---------------------------
(Thousands)
Accumulated postretirement benefit obligation:
Retired employees....................... $ 21,724 $ 31,555
Active employees:
Fully eligible........................ 4,212 10,902
Other................................. 5,125 14,728
--------- ---------
Total obligation .................... 31,061 57,185
Trust assets ............................. 4,623 2,632
--------- ---------
Obligation in excess of trust assets...... 26,438 54,553
Unrecognized net loss..................... (10,808) (6,298)
Unrecognized prior service cost .......... 2,923 -
Unrecognized transition obligation........ (11,444) (39,195)
--------- ---------
Accrued postretirement benefit cost $ 7,109 $ 9,060
========= =========
<PAGE>
H. Other Postretirement Benefits (Continued)
The net periodic cost for postretirement health care and life insurance
benefits includes the following:
Years Ended December 31,
------------------------------
1996 1995 1994
------------------------------
(Thousands)
Service cost.......................... $ 746 $ 993 $ 1,049
Interest cost......................... 2,892 4,200 3,423
Amortization of transition obligation. 1,329 2,306 2,305
Expected return on assets............. (198) - -
--------- -------- ---------
Periodic cost....................... $ 4,769 $ 7,499 $ 6,777
========= ======== =========
As of December 31, 1996 and 1995, approximately $4.0 million of the
accrued OPEBS related to rate-regulated operations have been deferred as
regulatory assets. Rate recovery has begun in several jurisdictions which
requires the Company to place agreed upon amounts in trust when collected in
rates until such time as they are applied to retiree benefits or returned to
ratepayers. Trust assets consist principally of equity and debt securities.
An increase of one percent in the assumed medical cost inflation rate
would increase the accumulated postretirement benefit obligation by 9% and would
increase the periodic cost by 7%.
I. Common Stock
(1) EMPLOYEE STOCK PURCHASE PLAN
In October 1995, the Company implemented an Employee Stock Purchase Plan.
The Plan provides for employees to purchase shares of the Company's common stock
at a 10 percent discount through payroll deductions.
(2) DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
Pursuant to this Plan, stockholders may reinvest dividends and make
limited additional cash investments to purchase shares of common stock. Shares
issued through the Plan may be acquired on the open market or by issuance of
previously unissued shares. At December 31, 1996, 92,153 shares of common stock
were reserved for issuance under the Plan.
(3) STOCK REPURCHASE PROGRAM
In 1995, the Board of Directors of the Company authorized the
repurchase of up to one million shares of outstanding common stock. Through
December 31, 1996, no shares have been repurchased.
<PAGE>
I. Common Stock (Continued)
(4) COMMON STOCK RESERVE
On July 18, 1996, the Board of Directors of the Company reserved 8,000,000
shares of the Company's authorized but unissued common stock for possible use in
connection with future acquisitions. Through December 31, 1996, no shares have
been issued.
J. Stock-Based Compensation Plans
(1) LONG-TERM INCENTIVE PLAN
The Company's Long-Term Incentive Plan provides for the granting of shares
of common stock to officers and key employees of the Company. These grants may
be made in the form of stock options, restricted stock, stock appreciation
rights and other types of stock-based or performance based awards as determined
by the Compensation Committee of the Board of Directors at the time of each
grant. Stock awarded under the Plan or purchased through the exercise of
options, and the value of stock appreciation units, are restricted and subject
to forfeiture should an optionee terminate employment prior to specified vesting
dates. The maximum number of shares which could have been granted under the Plan
during 1994 was 763,500 shares. In each subsequent year, an additional number of
shares equal to 1% of the total outstanding shares as of the preceding December
31 will be available for grant. In no case may the number of shares granted
under the Plan exceed 1,725,500 shares. These options expire from 5 to 10 years
from the date of grant but contain vesting provisions which are based upon
Company performance. At December 31, 1996, 1,725,500 shares of common stock were
reserved for issuance under the Plan.
The following schedule summarizes the stock option activity:
Years ended December 31,
-------------------------------------
1996 1995 1994
-------------------------------------
Options outstanding January 1....... 933,200 363,400 --
Granted............................. 125,400 739,000 363,400
Forfeited........................... (185,800) (169,200) --
-------- -------- -------
Options outstanding December 31..... 872,800 933,200 363,400
======== ======== =======
At December 31:
Number of options exercisable. 363,400 363,400 363,400
Prices of options outstanding. $27.50 $28.625 $33.81
to to
$33.81 $33.81
Average option price.......... $30.08 $30.31 $33.81
<PAGE>
J. Stock-Based Compensation Plans (Continued)
(2) NON-EMPLOYEE DIRECTORS' STOCK INCENTIVE PLAN
The Company's Non-Employee Directors' Stock Incentive Plan provides for
the granting of up to 80,000 shares of common stock in the form of stock option
grants and restricted stock awards to non-employee directors of the Company. On
the first business day of June in each year from 1997 to 1998, each Director
will be granted an option for 500 additional shares of common stock. The
exercise price for each share is 100% of the mean of the high and the low
trading prices of the common stock on the date of grant. Each option is
exercisable upon the earlier of three years from the date of grant or at
Director's retirement, disability, or death. No option may be exercised more
than five years after date of grant. At December 31, 1996, 76,400 shares of
common stock were reserved for issuance under the Plan.
The following schedule summarizes the stock option activity:
Years ended December 31,
-----------------------------------
1996 1995 1994
-----------------------------------
Options outstanding January 1.......... 11,000 4,000 --
Granted................................ 12,000 7,000 4,000
------ ------ -----
Options outstanding December 31........ 23,000 11,000 4,000
====== ====== =====
At December 31:
Number of options exercisable..... None None None
Prices of options outstanding..... $29.81 $29.875 $34.625
to to
$34.625 $34.625
Average option price.............. $30.67 $31.60 $34.625
<PAGE>
J. Stock-based Compensation Plans (Continued)
(3) KEY EMPLOYEE RESTRICTED STOCK OPTION PLAN
The Equitable Resources, Inc., Key Employee Restricted Stock Option and
Stock Appreciation Rights Incentive Compensation Plan is nonqualified and
provided for the granting of restricting stock awards or options to purchase
common stock of the Company at prices ranging from 75% to 100% of market value
on the date of grant. All options are exercisable upon grant. No future grants
may be made under the Plan which was replaced by the Long-Term Incentive Plan
effective May 27, 1994 as described above. Options expire five years from the
date of grant. Stock awarded under the Plan or purchased through the exercise of
options, and the value of certain stock appreciation units, are restricted and
subject to risk of forfeiture should an optionee terminate employment prior to
specified vesting dates. The following schedule summarizes the stock option
activity:
Years Ended December 31,
-------------------------------------
1996 1995 1994
-------------------------------------
Options outstanding January 1........ 144,125 241,818 253,068
Exercised............................ (43,425) (54,100) (7,650)
Canceled, forfeited, surrendered
or expired......................... (24,850) (43,593) (3,600)
-------- -------- ---------
Options outstanding December 31...... 75,850 144,125 241,818
======== ======= =======
Price of options exercised during
the year .......................... $20.13 $18.81 $17.50
to to
$20.13 $20.13
Average price of options exercised
during the year.................... $20.13 $20.01 $22.48
At December 31:
Price of options outstanding....... $36.50 $20.13 $18.81
to to
$36.50 $36.50
Average option price............... $36.50 $31.57 $29.82
Shares reserved for issuance....... 565,901 610,226 663,699
K. Short-Term Loans
Maximum lines of credit available to the Company were $500 million during
1996 and 1995, and $325 million during 1994. The Company is not required to
maintain compensating bank balances. Commitment fees averaging one-tenth of one
percent were paid to maintain credit availability. 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.
<PAGE>
K. Short-Term Loans (Continued)
At December 31, 1996, short-term loans consisted of $199.3 million of
commercial paper and $5.6 million of bank loans at a weighted average annual
interest rate of 5.44%; and at December 31, 1995, $135.0 million of commercial
paper at a weighted average annual interest rate of 5.68%. The maximum amount of
outstanding short-term loans was $295.5 million in 1996, $314.6 million in 1995
and $269.3 million in 1994. The average daily total of short-term loans
outstanding was approximately $147.4 million during 1996, $214.2 million during
1995 and $204.6 million during 1994; weighted average annual interest rates
applicable thereto were 5.5% in 1996, 6.0% in 1995 and 4.4% in 1994.
L. Long-Term Debt
On June 25, 1996, the Company commenced a tender offer for the purchase of
all the outstanding 9.9% Debentures due April 15, 2013. As of December 31, 1996,
$69.1 million of the $75 million Debentures were tendered for purchase leaving
$5.9 million outstanding. Premiums paid for the redemption were $6.3 million.
On June 28, 1996, the Company funded the retirement of $75 million of
8.25% Debentures due July 1, 1996.
The Company filed a shelf registration with the Securities and Exchange
Commission effective in June 1996 to issue $250 million of long-term debt. On
July 29, 1996 the Company issued $150 million of 30-year Debentures with a
coupon rate of 7.75%. The proceeds were used to finance the retirement of the
8.25% Debentures and purchase of 9.9% Debentures as described above.
The Company filed a shelf registration with the Securities and Exchange
Commission effective June 9, 1994 to issue $100 million of Medium-Term
Notes--Series C to be used to retire short-term loans. As of December 31, 1996,
$18 million of Series C Notes have been issued.
The 9 1/2% Convertible Subordinated Debentures are convertible at any time
into common stock at a conversion price of $11.06 per share. During 1996, 1995
and 1994, $178,000, $1,611,000 and $345,000 of these debentures were converted
into 16,089 shares, 145,635 shares, and 31,187 shares of common stock,
respectively. At December 31, 1996, 48,007 shares of common stock were reserved
for conversions.
Interest expense on long-term debt amounted to $34.8 million in 1996,
$36.5 million in 1995, and $35.5 million in 1994. Aggregate maturities of
long-term debt will be $0 in 1997, $5.0 million in 1998, $78.8 million in 1999,
$2.1 million in 2000, and $14.0 million in 2001.
<PAGE>
M. Derivative Financial Instruments
The Company is exposed to risk from fluctuations in energy prices in the
normal course of business. The Company uses exchange-traded natural gas and
crude oil futures contracts and options and over-the-counter (OTC) natural gas
and crude oil swap agreements and options to hedge exposures to energy price
changes, primarily relating to its gas marketing operations. The Company also
trades in energy futures. Exchange-traded energy futures contracts are
commitments to either purchase or sell a designated commodity, generally natural
gas or crude oil, at a future date for a specified price. These instruments are
generally settled with off-setting positions, but may be settled by delivery of
commodities. OTC arrangements require settlement in cash. The exchange-traded
contracts used by the Company cover one-month periods from one to eighteen
months in the future. The OTC agreements cover one-month periods for up to five
years in the future. Initial margin requirements are met in cash or other
instruments, and changes in contract values are settled daily. Energy futures
contracts have minimal credit risk because futures exchanges are the
counterparties. The Company manages the credit risk of the other financial
instruments by limiting dealings to those counterparties who meet the Company's
criteria for credit and liquidity strength.
The following table summarizes the outstanding derivative financial
instruments:
- - --------------------------------------------------------------------------------
Notional Unrealized
Quantity Deferred
Purchase Sale Gain/Loss
(Bcf Equivalent) ($ Millions)
- - --------------------------------------------------------------------------------
DECEMBER 31, 1996
Exchange traded
Futures.................... 5.3 8.7 $ 1.7
================================================================================
OTC
Swaps...................... 45.0 91.2 $ (11.1)
Options.................... 1.5 1.1 (1.5)
- - --------------------------------------------------------------------------------
Total.................... 46.5 92.3 $ (12.6)
================================================================================
DECEMBER 31, 1995
Exchange traded
Futures.................... 4.8 1.9 $ .4
Options.................... 18.2 11.4 (1.4)
- - --------------------------------------------------------------------------------
Total.................... 23.0 13.3 $ (1.0)
================================================================================
OTC
Swaps...................... 27.3 52.8 $ (.3)
Options.................... 13.5 21.1 1.0
- - --------------------------------------------------------------------------------
Total.................... 40.8 73.9 $ .7
================================================================================
<PAGE>
M. Derivative Financial Instruments (Continued)
Deferred realized gains (losses) from hedging firm commitments and
anticipated transactions were $(.9) million and $(2.8) million at December 31,
1996 and 1995, respectively. These amounts are included in other current assets
and recognized in earnings when the future transactions occur.
At December 31, 1996 and 1995, there were no outstanding energy futures
contracts held for trading purposes. During 1996 and 1995, the average fair
value of traded contracts was $23,000 and ($40,000), respectively. Trading
activity resulted in a net gain of $.8 million for 1996 and a net loss of $1.9
million for 1995. The value of these financial instruments is subject to
fluctuations in market prices for natural gas. Exposure to this risk is managed
by maintaining open positions within defined trading limits.
N. Fair Value of Financial Instruments
The carrying value of cash and cash equivalents as well as short-term
loans approximates fair value due to the short maturity of the instruments.
The estimated fair value of long-term debt, at December 31, 1996 and 1995
would be $445.6 million and $465.1 million, respectively. The fair value was
estimated based on the quoted market prices as well as the discounted values
using a current discount rate reflective of the remaining maturity.
The Company's 7 1/2% Debentures may not be redeemed prior to maturity. The
9.9% Debentures require payment of premiums for early redemption, exclusive of
annual sinking fund requirements.
The derivative financial instruments described in Note M are reflected in
other current assets at fair value of $(.2) million and $(3.3) million at
December 31, 1996 and 1995, respectively.
O. Concentrations of Credit Risk
Revenues and related accounts receivable from the supply and logistics
segment's operations are generated primarily from the sale of produced natural
gas to utility and industrial customers located mainly in the Appalachian area;
the sale of produced oil to refinery customers in the Rocky Mountain and
Appalachian areas; the sale of produced natural gas liquids to a refinery
customer in Kentucky; the sale of produced natural gas liquids and intrastate
transportation of natural gas in Louisiana; and the marketing of natural gas and
electricity.
<PAGE>
O. Concentrations of Credit Risk (Continued)
The services segment's operating revenues and related accounts receivable
are generated from the nationwide marketing of natural gas to brokers and large
volume utility and industrial customers; and cogeneration development,
performance contracting, and water efficiency and program development to
commercial, industrial, and institutional customers and various government
facilities.
The utilities segment's operating revenues and related accounts receivable
are generated from state-regulated utility natural gas sales and transportation
to more than 266,000 residential, commercial and industrial customers located in
southwest Pennsylvania and parts of West Virginia and Kentucky; and
FERC-regulated interstate pipeline transportation and storage service for the
affiliated utility, Equitable Gas, as well as other utility and end-user
customers located in nine mid-Atlantic and northeastern states. Under state
regulations, the utility is required to provide continuous gas service to
residential customers during the winter heating season.
The Company is not aware of any significant credit risks which have not
been recognized in provisions for doubtful accounts.
P. Financial Information by Business Segment
In 1996, the Company began reporting operations in three segments in order
to more accurately reflect the Company's lines of business. The supply and
logistics segment's activities comprise the exploration, development, production
and sale of natural gas and oil, extraction and sale of natural gas liquids,
intrastate transportation, contract drilling, nationwide natural gas marketing
and supply, peak shaving, transportation arrangements, and electricity
marketing. The services segment's activities comprise marketing of natural gas,
cogeneration development, water efficiency and program development, performance
contracting, and central facility plant operations. The utilities segment's
activities comprise the operations of the Company's state-regulated local
distribution company, in addition to gas transportation, gathering, storage and
marketing activities involving the Company's three FERC-regulated gas pipelines.
<PAGE>
P. Financial Information by Business Segment (Continued)
The following table sets forth financial information for each of the
business segments:
Years Ended December 31,
--------------------------------------
1996 1995 1994
--------------------------------------
(Thousands)
OPERATING REVENUES:
Supply and logistics............... $1,318,661 $1,059,854 $1,012,119
Utilities.......................... 507,441 441,732 446,786
Services........................... 172,335 473 -
Sales between segments............. (136,638) (76,069) (61,625)
---------- ---------- ----------
Total............................ $1,861,799 $1,425,990 $1,397,280
========== ========== ==========
OPERATING INCOME (LOSS):
Supply and logistics............... $ 52,010 $ (32,668) $ 34,932
Utilities.......................... 89,320 55,612 75,316
Services........................... (12,542) (992) -
---------- ---------- ----------
Total............................ $ 128,788 $ 21,952 $ 110,248
========== ========== ==========
IDENTIFIABLE ASSETS:
Supply and logistics............... $1,089,669 $1,044,045 $1,120,311
Utilities.......................... 998,064 932,529 971,825
Services........................... 50,584 3,419 -
Eliminations....................... (42,018) (16,680) (73,014)
---------- ----------- -----------
Total............................ $2,096,299 $1,963,313 $2,019,122
========== ========== ==========
DEPRECIATION AND DEPLETION:
Supply and logistics............... $ 55,415 $ 78,444 $ 68,898
Utilities.......................... 26,608 26,181 24,449
Services........................... 358 - -
---------- ---------- ----------
Total............................ $ 82,381 $ 104,625 $ 93,347
========== ========== ==========
CAPITAL EXPENDITURES:
Supply and logistics............... $ 72,617 $ 68,950 $ 100,225
Utilities.......................... 36,831 49,131 45,949
Services........................... 836 31 -
---------- ---------- ----------
Total............................ $ 110,284 $ 118,112 $ 146,174
========== ========== ==========
<PAGE>
Q. Sale Of Property
In October 1995, the Company sold most of its gas and oil properties in
the northern Appalachian basin areas of New York, Pennsylvania and West
Virginia. The properties comprised less than four percent of the supply and
logistics segment's total gas and oil production and reserves. The Company
previously operated the majority of these properties with its working interest
averaging approximately 25 percent. Proceeds from the sale were approximately
$17.3 million.
R. Deferred Revenue
In November 1995, the Company sold an interest in certain Appalachian gas
properties, the production from which qualifies for nonconventional fuels tax
credit. The Company retained an interest in the properties that will increase
based on performance. As such, the proceeds of $133.5 million were recorded as
deferred revenues and are being recognized in income as financial targets are
met.
S. Acquisitions
In December 1996, the Company purchased all of the outstanding stock of
Three Rivers Pipeline Corporation (Three Rivers) for $3.3 million. Three Rivers
owns a 120-mile intrastate natural gas pipeline in central Pennsylvania.
In September 1996, the Company purchased all of the outstanding stock of
Pequod Associates, Inc. (Pequod) for $1.7 million. Pequod is an engineering
consulting firm specializing in water efficiency and program development, energy
efficiency studies, and technical training for water agency personnel.
In March 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. The
Company used shares held in treasury for this acquisition. Conogen is a
design-builder and performance contractor in self-funded energy and resources
efficiency projects for commercial, industrial, and institutional customers and
various government facilities.
The 1996 acquisitions were accounted for under the purchase method of
accounting. Three Rivers is included in the utilities segment. Pequod and
Conogen are included in the services segment. The effect of these acquisitions
on the consolidated financial statements of the Company is not material.
In July 1995, the Company acquired all of the outstanding stock of
Independent Energy Corporation (IEC) in exchange for 232,564 shares of the
Company's common stock held in treasury. IEC is engaged in the development,
construction, operation and ownership of private power and cogeneration
projects. The acquisition was accounted for as a pooling of interests. The
effect on the Company's financial statements is not material.
<PAGE>
T. Commitments and Contingencies
Rent expense was $10.9 million in 1996, $9.9 million in 1995 and $9.7
million in 1994. Long-term leases are for certain facilities and equipment and
have renewal options ranging to 17 years from December 31, 1996. Future minimum
rentals for all noncancelable long-term leases at December 31, 1996 are as
follows: 1997, $7.2 million; 1998, $6.6 million; 1999, $5.5 million; 2000, $5.0
million; 2001, $5.3 million, and $25.1 million thereafter for a total of $54.7
million.
The Company has annual commitments of approximately $35 million for demand
charges under existing long-term contracts with pipeline suppliers for periods
extending up to 16 years at December 31, 1996, which relate to gas distribution
operations. However, substantially all of these costs are recoverable in
customer rates.
The Company is subject to federal, state and local environmental laws and
regulations. These laws and regulations, which are constantly changing, can
require expenditures for remediation and may in certain instances result in
assessment of fines. The Company has established procedures for on-going
evaluation of its operations to identify potential environmental exposures and
assure compliance with regulatory policies and procedures. The estimated costs
associated with identified situations that require remedial action are accrued.
However, certain of these costs are deferred as regulatory assets when
recoverable through regulated rates. On-going expenditures for compliance with
environmental laws and regulations, including investments in plant and
facilities to meet environmental requirements, have not been material.
Management believes that any such required expenditures will not be
significantly different in either their nature or amount in the future and does
not know of any environmental liabilities that will have a material effect on
the Company's financial position or results of operations.
<PAGE>
U. Interim Financial Information (Unaudited)
The following quarterly summary of operating results reflects variations
due primarily to the seasonal nature of the Company's business and volatility of
oil and gas commodity prices:
March June September December
31 30 30 31
-----------------------------------------------
(Thousands except per share amounts)
1996
Operating revenues $ 640,278 $ 391,767 $ 357,011 $ 472,743
Operating income 69,403 8,983 3,860 46,542
Net income (loss) 38,726 928 (3,687) 23,412
Earnings (loss) per share $1.11 $.03 $(.10) $.66
1995
Operating revenues $ 404,691 $ 316,534 $ 270,992 $ 433,773
Operating income (loss) 48,312 5,032 14,458 (45,850)
Net income (loss) 27,754 (1,162) 1,684 (26,728)
Earnings (loss) per share $.80 $(.03) $.05 $(.76)
V. Natural Gas and Oil Producing Activities
The supplementary information summarized below presents the results of
natural gas and oil activities for the supply and logistics segment in
accordance with Statement of Financial Accounting Standards No. 69,
"Disclosures About Oil and Gas Producing Activities."
The information presented excludes data associated with natural gas
reserves related to rate-regulated operations. These reserves (proved developed)
are less than 5% of total Company proved reserves for the years presented.
<PAGE>
V. Natural Gas and Oil Producing Activities (Continued)
(1) PRODUCTION COSTS
The following table presents the costs incurred relating to natural gas
and oil production activities:
1996 1995 1994
-------------------------------------
(Thousands)
At December 31:
Capitalized costs.............. $ 840,136 $803,124 $ 909,443
Accumulated depreciation
and depletion................ 342,950 311,524 304,835
--------- ------- -------
Net capitalized costs........... $ 497,186 $ 491,600 $ 604,608
========= ========= =========
Costs incurred :
Property acquisition:
Proved properties............ $ 68 $ 222 $ 8,335
Unproved properties.......... 6,411 - -
Exploration.................... 17,934 14,844 22,783
Development.................... 33,298 31,802 60,690
(2) RESULTS OF OPERATIONS FOR PRODUCING ACTIVITIES
The following table presents the results of operations related to natural
gas and oil production, including the effect in 1995 of impairment of assets as
described in Note C:
1996 1995 1994
-------------------------------------
(Thousands)
Revenues:
Affiliated..................... $ 50,968 $ 20,619 $ 16,564
Nonaffiliated ................. 89,096 114,247 136,029
Production costs................ 34,523 31,626 33,891
Exploration expenses............ 15,714 13,312 16,634
Depreciation and depletion...... 40,872 62,212 52,505
Impairment of assets............ - 65,563 -
Income tax expense (benefit).... 18,062 (27,992) 3,602
--------- --------- ---------
Results of operations from
producing activities
(excluding corporate overhead) $ 30,893 $ (9,855) $ 45,961
========= ========= =========
<PAGE>
V. Natural Gas and Oil Producing Activities (Continued)
(3) RESERVE INFORMATION (UNAUDITED)
The information presented below represents estimates of proved gas and oil
reserves prepared by Company engineers. Proved developed reserves represent only
those reserves expected to be recovered from existing wells and support
equipment. Proved undeveloped reserves represent proved reserves expected to be
recovered from new wells after substantial development costs are incurred.
Substantially all reserves are located in the United States.
NATURAL GAS 1996 1995 1994
----------------------------------
(Millions of Cubic Feet)
Proved developed and undeveloped reserves:
Beginning of year....................... 845,771 874,964 822,583
Revision of previous estimates.......... 6,710 16,999 18,663
Purchase (sale) of natural gas in
place - net 443 (31,729) 6,307
Extensions, discoveries and other
additions............................ 53,901 50,521 89,918
Production.............................. (57,295) (64,984) (62,507)
-------- -------- --------
End of year (a)......................... 849,530 845,771 874,964
======== ======== ========
Proved developed reserves:
Beginning of year....................... 739,249 771,635 759,282
End of year (b)......................... 732,158 739,249 771,635
(a) Includes proved reserves in Canada of 66,000 Mmcf in 1996, 70,000 MMcf
in 1995 and 67,000 MMcf in 1994.
(c) Includes proved developed reserves in Canada of 42,000 Mmcf in 1996,
46,000 MMcf in 1995, and 43,000 MMcf in 1994.
<PAGE>
V. Natural Gas and Oil Producing Activities (Continued)
OIL 1996 1995 1994
---------------------------------
(Thousands of Barrels)
Proved developed and undeveloped reserves:
Beginning of year.................... 18,201 18,283 16,468
Revision of previous estimates....... 1,867 (356) 2,601
Sale of oil in place - net........... (168) (1,071) (169)
Extensions, discoveries and other
additions......................... 1,344 3,278 1,369
Production........................... (1,727) (1,933) (1,986)
------- ------ ------
End of year (a)...................... 19,517 18,201 18,283
======= ====== ======
Proved developed reserves:
Beginning of year.................... 16,834 18,110 16,442
End of year (b)...................... 18,482 16,834 18,110
(a) Includes proved reserves in Canada of 78,000 barrels in 1996,
91,000 barrels in 1995 and 75,000 barrels in 1994.
(b) Includes proved developed reserves in Canada of 50,000 barrels
in 1996, 64,000 barrels in 1995 and 50,000 barrels in 1994.
<PAGE>
V. Natural Gas and Oil Producing Activities (Continued)
(4) STANDARD MEASURE OF DISCOUNTED FUTURE CASH FLOW (UNAUDITED)
Management cautions that the standard measure of discounted future cash
flows should not be viewed as an indication of the fair market value of gas and
oil producing properties, nor of the future cash flows expected to be generated
therefrom. The information presented does not give recognition to future changes
in estimated reserves, selling prices or costs and has been discounted at an
arbitrary rate of 10%. Estimated future net cash flows from natural gas and oil
reserves based on selling prices and costs at year-end price levels are as
follows:
1996 1995 1994
----------------------------------------
(Thousands)
Future cash inflows................. $ 3,610,060 $ 2,279,509 $ 1,983,757
Future production costs............. (790,140) (635,540) (562,841)
Future development costs............ (50,708) (51,081) (46,985)
Future income tax expenses.......... (1,007,421) (539,106) (361,486)
------------ ----------- -----------
Future net cash flow................ 1,761,791 1,053,782 1,012,445
10% annual discount for estimated
timing of cash flows.............. (877,077) (535,921) (471,778)
------------ ----------- -----------
Standardized measure of discounted
future net cash flows (a)......... $ 884,714 $ 517,861 $ 540,667
============ =========== ===========
(a) Includes $23,074,000 in 1996, $11,293,000 in 1995 and $10,043,000 in
1994 related to Canada.
Summary of changes in the standardized measure of discounted future net
cash flows:
1996 1995 1994
----------------------------------------
(Thousands)
Sales and transfers of gas
and oil produced - net............ $ (105,541) $ (103,240) $ (118,702)
Net changes in prices, production
and development costs............. 482,376 54,806 (135,742)
Extensions, discoveries, and
improved recovery, less
related costs..................... 86,306 65,603 74,900
Development costs incurred.......... 13,543 18,620 16,037
Purchase (sale) of minerals in
place - net....................... 1,506 (22,990) 9,627
Revisions of previous quantity
estimates......................... 47,545 5,278 19,189
Accretion of discount............... 72,375 64,875 72,058
Net change in income taxes.......... (232,841) (97,808) 45,012
Other .............................. 1,584 (7,950) (9,192)
------------ ----------- -----------
Net increase (decrease)............. 366,853 (22,806) (26,813)
Beginning of year................... 517,861 540,667 567,480
------------ ----------- -----------
End of year......................... $ 884,714 $ 517,861 $ 540,667
============ =========== ===========
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not Applicable.
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information required by Item 10 with respect to directors is
incorporated herein by reference to the section describing "Election of
Directors" in the Company's definitive proxy statement relating to the annual
meeting of stockholders to be held on May 23, 1997, which will be filed with the
Commission within 120 days after the close of the Company's fiscal year ended
December 31, 1996.
Information required by Item 10 with respect to executive officers is
included herein after Item 4 at the end of Part I.
ITEM 11. EXECUTIVE COMPENSATION
Information required by Item 11 is incorporated herein by reference to
the section describing "Executive Compensation", "Employment Contracts and
Change-In-Control Arrangements" and "Pension Plan" in the Company's definitive
proxy statement relating to the annual meeting of stockholders to be held on May
23, 1997.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information required by Item 12 is incorporated herein by reference to
the section describing "Voting Securities and Record Date" in the Company's
definitive proxy statement relating to the annual meeting of stockholders to be
held on May 23, 1997.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information required by Item 13 is incorporated herein by reference to
the section describing "Certain Relationships and Related Transactions" in the
Company's definitive proxy statement relating to the annual meeting of
stockholders to be held on May 23, 1997.
<PAGE>
PART IV
ITEM 14. EXHIBITS AND REPORTS ON FORM 8-K
(a) 1. Financial statements
The financial statements listed in the accompanying index to
financial statements (see below) are filed as part of this annual
report.
2. Financial Statement Schedule
The financial statement schedule listed in the accompanying index to
financial statements and financial schedule (see below) is filed as
part of this annual report.
3. Exhibits
The exhibits listed on the accompanying index to exhibits (pages 61
through 63) are filed as part of this annual report.
(b) Reports on Form 8-K filed during the quarter ended December 31,
1996.
None
(c) Each management contract and compensatory arrangement in which any
director or any named executive officer participates has been marked
with an asterisk (*) in the Index to Exhibits.
<PAGE>
EQUITABLE RESOURCES, INC.
INDEX TO FINANCIAL STATEMENTS COVERED
BY REPORT OF INDEPENDENT AUDITORS
(ITEM 14 (A))
1. The following consolidated financial statements of Equitable Resources,
Inc. and Subsidiaries are included in Item 8:
PAGE REFERENCE
Statements of Consolidated Income
for each of the three years in
the period ended December 31, 1996 26
Statements of Consolidated Cash Flows
for each of the three years in the
period ended December 31, 1996 27
Consolidated Balance Sheets
December 31, 1996 and 1995 28 & 29
Statements of Common Stockholders'
Equity for each of the three years in the
period ended December 31, 1996 30
Long-term Debt, December 31, 1996 and 1995 31
Notes to Consolidated Financial Statements 32 thru 55
2. Schedule for the Years Ended December 31,
1996, 1995 and 1994 included in Part IV:
II - Valuation and Qualifying
Accounts and Reserves 60
All other schedules are omitted since the subject matter thereof is either
not present or is not present in amounts sufficient to require submission
of the schedules.
<PAGE>
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE THREE YEARS ENDED DECEMBER 31, 1996
Column A Column B Column C Column D Column E
- - -------------------------------------------------------------------------------
Balance At Additions Charged Balance
Beginning To Costs At End
Description Of Period and Expenses Deductions Of Period
- - -------------------------------------------------------------------------------
(Thousands)
1996
Accumulated Provision
for Doubtful Accounts $10,539 $ 17,707 $17,532(A) $10,714
1995
Accumulated Provision
for Doubtful Accounts $10,890 $ 10,810 $11,161(A) $10,539
1994
Accumulated Provision
for Doubtful Accounts $10,106 $ 10,010 $ 9,226(A) $10,890
Note:
(A) Customer accounts written off, less recoveries.
<PAGE>
INDEX TO EXHIBITS
EXHIBITS DESCRIPTION METHOD OF FILING
- - -------------- -------------------------------- ===============================
3.01 Restated Articles of Filed as Exhibit 3(i) to Form
Incorporation of the Company 10-Q for the quarter ended
dated May 27, 1996 (effective March 31, 1996
May 28, 1996)
- - -------------- -------------------------------- ===============================
3.02 By-Laws of the Company Filed as Exhibit 3(ii) to
(amended through March 21, Form 10-Q for the quarter
1996) ended March 31, 1996
- - -------------- -------------------------------- ===============================
4.01 (a) Indenture dated as of April 1, Filed as Exhibit 4.01
1983 between the Company and (Revised) to Post-Effective
Pittsburgh National Bank Amendment No. 1 to
relating to Debt Securities Registration Statement
(Registration No. 2-80575)
- - -------------- -------------------------------- ===============================
4.01 (b) Instrument appointing Bankers Filed as Exhibit 4.01 (b) to
Trust Company as successor Form 10-K for the year ended
trustee to Pittsburgh National December 31, 1993
Bank
- - -------------- -------------------------------- ===============================
4.01 (d) Resolutions adopted June 22, Filed as Exhibit 4.01 (d) to
1987 by the Finance Committee Form 10-K for the year ended
of the Board of Directors of December 31, 1993
the Company establishing the
terms of the 75,000 units
(debentures with warrants)
issued July 1, 1987
- - -------------- -------------------------------- ===============================
4.01 (e) Resolution adopted April 6, Filed as Exhibit 4.01 (e) to
1988 by the Ad Hoc Finance Form 10-K for the year ended
Committee of the Board of December 31, 1993
Directors of the Company
establishing the terms and
provisions of the 9.9%
Debentures issued April 14,
1988
- - -------------- -------------------------------- ===============================
4.01 (f) Supplemental indenture dated Refiled herewith as Exhibit
March 15, 1991 with Bankers 4.01(f) pursuant to Rule 24
Trust Company eliminating of SEC's Rules of Practice
limitations on liens
and additional funded debt
- - -------------- -------------------------------- ===============================
4.01 (g) Resolution adopted August 19, Refiled herewith as Exhibit
1991 by the Ad Hoc Finance 4.01(g) pursuant to Rule 24
Committee of the Board of of the SEC's Rules of Practice
Directors of the Company
Addenda Nos. 1 thru 27,
establishing the terms and
provisions of the Series A
Medium-Term Notes
- - -------------- -------------------------------- ===============================
4.01 (h) Resolutions adopted July 6, Filed as Exhibit 4.05 to Form
1992 and February 19, 1993 by 10-K for the year ended
the Ad Hoc Finance Committee December 31, 1992
of the Board of Directors of
the Company and Addenda Nos. 1
thru 8, establishing the terms
and provisions of the Series B
Medium-Term Notes
- - -------------- -------------------------------- ===============================
4.01 (i) Resolution adopted July 14, Filed as Exhibit 4.01(i) to
1994 by the Ad Hoc Finance Form 10-K for the year ended
Committee of the Board of December 31, 1995
Directors of the Company and
Addenda Nos. 1 and 2,
establishing the terms and
provisions of the Series C
Medium-Term Notes
- - -------------- -------------------------------- ===============================
<PAGE>
- - -------------- -------------------------------- ===============================
4.01 (j) Resolution adopted January 18 Filed herewith as Exhibit
and July 18, 1996 by the Board 4.01(j)
of Directors of the Company
and Resolutions adopted July
18, 1996 by the Executive
Committee of the Board of
Directors of the Company,
establishing the terms and
provisions of the 7.75%
Debentures issued July 29, 1996
- - -------------- -------------------------------- ===============================
*10.01 Equitable Resources, Inc. Key Filed as Exhibit 10.01 to
Employee Restricted Stock Form 10-K for the year ended
Option and Stock Appreciation December 31, 1994
Rights Incentive Compensation
Plan (as amended through March
17, 1989)
- - -------------- -------------------------------- ===============================
*10.02 Employment Agreement dated as Filed as Exhibit 10.02 to
of March 18, 1988 and restated Form 10-K for the year ended
as of March 15, 1996, with December 31, 1995
Frederick H. Abrew
- - -------------- -------------------------------- ===============================
*10.04 (a) Agreement dated May 29, 1996 Filed herewith as Exhibit
with Paul Christiano for 10.04 (a)
deferred payment of 1996
director fees beginning May
29, 1996
- - -------------- -------------------------------- ===============================
*10.04 (b) Agreement dated November 26, Filed herewith as Exhibit
1996 with Paul Christiano 10.04(b)
for deferred payment of 1997
director fees
- - -------------- -------------------------------- ===============================
*10.05 Supplemental Executive Filed as Exhibit 10.05 to
Retirement Plan (as amended Form 10-K for the year ended
and restated through October December 31, 1995
20, 1995)
- - -------------- -------------------------------- ===============================
*10.06 Retirement Program for the Filed as Exhibit 10.06 to
Board of Directors of Form 10-K for the year ended
Equitable Resources, Inc. (as December 31, 1994
amended through August 1, 1989)
- - -------------- -------------------------------- ===============================
*10.07 Supplemental Pension Plan (as Filed as Exhibit 10.07 to
amended and restated through Form 10-K for the year ended
December 16, 1994) December 31, 1994
- - -------------- -------------------------------- ===============================
*10.08 Policy to Grant Supplemental Filed as Exhibit 10.08 to
Deferred Compensation Benefits Form 10-K for the year ended
in Selected Instances to a December 31, 1994
Select Group of Management or
Highly Compensated Employees
(as amended and restated
through August 1, 1989)
- - -------------- -------------------------------- ===============================
*10.09 Equitable Resources, Inc. and Filed herewith as Exhibit
Subsidiaries Short-Term 10.09
Incentive Compensation Plan as
amended March 1997
- - -------------- -------------------------------- ===============================
*10.10 (a) Agreement dated December 31, Filed as Exhibit 10.10 (a) to
1987 with Malcolm M. Prine for Form 10-K for the year ended
deferred payment of 1988 December 31, 1993
director fees
- - -------------- -------------------------------- ===============================
*10.10 (b) Agreement dated December 30, Filed as Exhibit 10.10 (b) to
1988 with Malcolm M. Prine for Form 10-K for the year ended
deferred payment of 1989 December 31, 1993
director fees
- - -------------- -------------------------------- ===============================
<PAGE>
- - -------------- -------------------------------- ===============================
10.11 Trust Agreement with Filed as Exhibit 10.12 to
Pittsburgh National Bank to Form 10-K for the year ended
act as Trustee for December 31, 1994
Supplemental Pension Plan,
Supplemental Deferred
Compensation Benefits,
Retirement Program for Board
of Directors, and Supplemental
Executive Retirement Plan
- - -------------- -------------------------------- ===============================
*10.12 Equitable Resources, Inc. Filed as Exhibit 10.13 to
Non-Employee Directors' Stock Form 10-K for the year ended
Incentive Plan December 31, 1994
- - -------------- -------------------------------- ===============================
*10.13 Equitable Resources, Inc. Filed as Exhibit 10.14 to
Long-Term Incentive Plan Form 10-K for the year ended
December 31, 1994
- - -------------- -------------------------------- ===============================
*10.14 (a) Agreement dated May 24, 1996 Filed herewith as Exhibit
with Phyllis A. Savill for 10.14(a)
deferred payment of 1996
director fees beginning May
24, 1996
- - -------------- -------------------------------- ===============================
*10.14 (b) Agreement dated November 27, Filed herewith as Exhibit
1996 with Phyllis A. Savill 10.14 (b)
for deferred payment of 1997
director fees
- - -------------- -------------------------------- ===============================
*10.15 Change in Control Agreement Filed as Exhibit 10.15 to the
executed with certain key Form 10-K for the year ended
employees December 31, 1995
- - -------------- -------------------------------- ===============================
*10.16 Equitable Resources, Inc. and Filed as Exhibit 10.16 to the
Subsidiaries Deferred Form 10-K for the year ended
Compensation Plan December 31, 1995
- - -------------- -------------------------------- ===============================
11.01 Statement re Computation of Filed herewith as Exhibit
Earnings Per Share 11.01
- - -------------- -------------------------------- ===============================
21 Schedule of Subsidiaries Filed herewith as Exhibit 21
- - -------------- -------------------------------- ===============================
23.01 Consent of Independent Auditors Filed herewith as Exhibit
23.01
- - -------------- -------------------------------- ===============================
The Company agrees to furnish to the Commission, upon request, copies of
instruments with respect to long-term debt which have not previously been filed.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
By: EQUITABLE RESOURCES, INC.
-------------------------------------
(Registrant)
By: /s/ Frederick H. Abrew
-------------------------------------
Frederick H. Abrew
President and Chief Executive Officer
Date: March 20, 1997
Pursuant to the requirements of the Securities and Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
President and Chief Executive
Officer and Director
/s/ Frederick H. Abrew (Principal Executive Officer) March 20, 1997
- - -----------------------------
Frederick H. Abrew
Senior Vice President and
/s/ A. Mark Abramovic Chief Financial Officer March 20, 1997
- - -----------------------------
A. Mark Abramovic
/s/ Paul Christiano Director March 20, 1997
Paul Christiano
/s/ E. Lawrence Keyes, Jr. Director March 20, 1997
- - -----------------------------
E. Lawrence Keyes, Jr.
/s/ Thomas A. McConomy Director March 20, 1997
- - -----------------------------
Thomas A. McConomy
/s/ Donald I. Moritz Director March 20, 1997
- - -----------------------------
Donald I. Moritz
/s/ Malcolm M. Prine Director March 20, 1997
- - -----------------------------
Malcolm M. Prine
<PAGE>
SIGNATURES (Continued)
/s/ James E. Rohr Director March 20, 1997
- - -----------------------------
James E. Rohr
/s/ Phyllis A. Savill Director March 20, 1997
- - -----------------------------
Phyllis A. Savill
/s/ David S. Shapira Director March 20, 1997
- - -----------------------------
David S. Shapira
/s/ J. Michael Talbert Director March 20, 1997
- - -----------------------------
J. Michael Talbert
Exhibit 4.01 (f)
1991 SUPPLEMENTAL INDENTURE
This 1991 Supplemental Indenture, made as of March 15, 1991, by and
between EQUITABLE RESOURCES, INC. (formerly Equitable Gas Company), a
Pennsylvania corporation having its principal office at 420 Boulevard of the
Allies, Pittsburgh, Pennsylvania 15219 (the "Company"), and BANKERS TRUST
COMPANY, a New York corporation having its principal office at Four Albany
Street, New York, New York 10006, as successor trustee (the "Trustee") under the
Indenture dated as of April 1, 1983 (the "Indenture") from the Company,
WITNESSETH THAT:
WHEREAS, Section 901(5) of the Indenture provides that, without the
consent of any Holders, the Company, when authorized by a Board Resolution, and
the Trustee may enter into a supplemental indenture for the purpose, among
others, of changing or eliminating any of the provisions of the Indenture,
provided that any such change or elimination shall become effective only when
there is no Security Outstanding of any series created prior to the execution of
such supplemental indenture which is entitled to the benefit of such provision;
WHEREAS, four series of Securities have been created prior to the
execution hereof, three of which series, to wit: the Debentures, 8 1/4% Series
Due July 1, 1996, the Debentures, 7 1/2% Series Due July 1, 1999, and the
Debentures, 9.90% Series Due April 15, 2013, remain Outstanding in varying
principal amounts and are entitled to the benefit of the provisions of the
Indenture eliminated hereby;
WHEREAS, the execution and delivery of this 1991 Supplemental Indenture
have been duly authorized by a Board Resolution.
NOW, THEREFORE, the parties hereto, for and in consideration of the
premises, and intending to be legally bound hereby, do hereby agree to eliminate
from the Indenture, in their entirety, Section 1004, containing a limitation on
liens, and Section 1005, containing a limitation upon additional funded debt,
provided that the elimination of each of these provisions shall become effective
only when there is no Security Outstanding of any series created prior to the
execution of this Supplemental Indenture which is entitled to the benefit of
such provisions. After the elimination of the above-mentioned provisions becomes
effective, all references to such provisions contained elsewhere in the
Indenture shall be deemed also to have been eliminated and given no effect.
This instrument is and for all purposes shall be considered supplemental
to the Indenture which, as heretofore supplemented and as supplemented hereby,
shall remain in full force and effect.
Terms capitalized herein and defined in the Indenture are used herein as
therein defined.
The Trustee does hereby approve the form of this 1991 Supplemental
Indenture.
WITNESS the due execution hereof as of the day and year first above
written.
EQUITABLE RESOURCES, INC.
By
-------------------------------
Vice President and Treasurer
[Corporate Seal]
ATTEST:
Corporate Secretary
BANKERS TRUST COMPANY,
as Trustee
By
Title
[Corporate Seal]
ATTEST:
Authorized Officer
<PAGE>
COMMONWEALTH OF PENNSYLVANIA )
) ss:
COUNTY OF ALLEGHENY )
On this _________ day of ______________________, 1991, before me, the
undersigned officer, personally appeared _________________________, who
acknowledged himself to be Vice President and Treasurer of Equitable Resources,
Inc., a corporation, and that he as such officer, being authorized to do so,
executed the foregoing instrument for the purposes therein contained by signing
the name of the corporation by himself as such officer.
IN WITNESS WHEREOF, I hereunto set me hand and official seal.
Notary Public
My Commission expires:
COMMONWEALTH OF NEW YORK )
) ss:
COUNTY OF NEW YORK )
On this _________ day of ______________________, 1991, before me, the
undersigned officer, personally appeared _________________________, who
acknowledged himself to be A _______________________ of Bankers Trust Company, a
corporation, and that he as such officer, being authorized to do so, executed
the foregoing instrument for the purposes therein contained by signing the name
of the corporation by himself as such officer.
IN WITNESS WHEREOF, I hereunto set me hand and official seal.
Notary Public
My Commission expires:
Exhibit 4.01 (g)
EQUITABLE RESOURCES, INC.
Ad Hoc Finance Committee Meeting
Pittsburgh, Pa.
August 19, 1991
In accordance with notice duly given, a telephonic meeting of the Ad Hoc
Finance Committee of the Board of Directors of Equitable Resources, Inc., was
held on Monday, August 19, 1991, at 2:30 p.m., Eastern Daylight Time.
Committee members participating: Messrs. Merle E. Gilliand, E. Lawrence
Keyes, Jr., Donald I. Moritz and Malcolm M. Prine.
Also present: Messrs. Frederick H. Abrew, Executive Vice President;
Robert E. Daley, Vice President and Treasurer; Elliot Gill, Senior Securities
Attorney; and Ms. Audrey C. Moeller, Vice President and Corporate Secretary.
Mr. Donald I. Moritz, President and Chief Executive Officer, acted as
Chairman of the meeting and Ms. Audrey C. Moeller acted as Secretary of the
meeting.
The Chairman stated that the purpose of the meeting was to adopt a
resolution establishing certain terms and provisions of-the fifth series of
securities of the Company to be issued under the Indenture dated as of April 1,
1983 from Equitable Resources, Inc., to Bankers Trust Company, as Successor
Trustee, and to authorize the Vice President and Treasurer of the Company to
take certain other action on the Committee's behalf as previously authorized by
the Board of Directors. Mr. Moritz asked the Committee if they received the
draft of the resolution to be adopted and all acknowledged that they received
and reviewed it. The Chairman stated that several changes had been made in the
text of the resolution which would be discussed after a review by Mr. Daley of
the reasons for the Medium-Term Note program and how it will operate.
Mr. Daley then briefly reviewed the text of the resolution pointing out
that the Notes would be issued from time to time and designated Medium-Term
Notes, Series A. He said maturities shall be three to 30 years from the date of
issue; that the Notes may be redeemed prior to maturity; shall not be
convertible; that the Company has no obligation to repay the Notes prior to
maturity; and that he would be negotiating with Agents, Morgan Stanley, Lehman
Brothers and The First Boston Corporation in fixing the interest rate on each
issue of Notes. Mr. Daley referred the Committee to a resolution adopted by said
Committee on July 19, 1991, which restricted him from negotiating an interest
rate higher than 9-1/2% per annum.
The Chairman noted that it was necessary to adopt the resolution for a
Closing which will take place this week so that when a determination is made by
Mr. Daley to issue Notes all documents will be in order.
The Chairman asked Mr. Gill to review the changes made in the text of
the resolution from the copy reviewed by the Committee. Mr. Gill noted two
changes: (1) counsel for the Trustee had requested an indemnification
provision; and (2) a provision was added clarifying references in the
Indenture that all Notes issued under any series will be treated equally.
After full discussion, on motion duly made and seconded, the following
resolutions were unanimously adopted:
RESOLVED, That, in accordance with Section 301 of the Indenture dated as
of April 1, 1983 (the "Original Indenture") from Equitable Resources, Inc. (the
"Company") to Bankers Trust Company, as trustee (the "Trustee"), as amended by
the 1991 Supplemental Indenture dated as of March 15, 1991 (the Original
Indenture as so amended, the "Indenture"), there is hereby established for
authentication and delivery by the Trustee an additional series of Securities of
the Company (such series being referred to herein as the "Notes") to be issued
from time to time under the Indenture, having the following terms and provisions
in addition to the terms and provisions established by the Indenture:
1. TITLE. The title of the Notes shall be "Medium-Term Notes, Series A".
2. PRINCIPAL AMOUNT. The aggregate principal amount of Notes which may be
authenticated and delivered (except for Notes authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other Notes
pursuant to Section 304, 305, 306, 906 or 1107 of the Indenture) shall be
limited to $100,000,000. Notes may be issued at any time or from time to time in
such principal amounts as shall be specified in one or more Addenda hereto
(individually an "Addendum" and collectively "Addenda") which may be executed at
any time or from time to time by the President, the Executive Vice President or
the Vice President and Treasurer of the Company. Each Addendum shall be deemed
to have been, and hereby is, adopted by this Committee, and may be certified by
the Secretary or Assistant Secretary of the Company as a part of this Board
Resolution. For purposes of each issue of Notes established pursuant to any
Addendum, all references in Sections 304, 305, 306, 906 and 1107 of the
Indenture to the Securities of any "series" shall be deemed to be references
solely to the Notes so established and to any other Notes having the same
interest rate, Maturity Date, Interest Payment Dates, Record Dates, redemption
provisions and other relevant terms.
3. MATURITY. The principal of the Notes shall be payable on such
date as shall be three to 30 years from the date of issue, as shall be
specified in any applicable Addendum.
4.1 INTEREST RATE. The Notes shall bear interest at such fixed rate per
annum as shall be specified in any applicable Addendum, in each case until the
principal thereof is paid or made available for payment and (to the extent that
the payment of such interest shall be legally enforceable) at the same rate per
annum on any overdue principal and premium and on any overdue installment of
interest.
4.2 INTEREST ACCRUAL. Interest on the Notes shall accrue from the date of
the original issue of such Notes or from the most recent Interest Payment Date
(as specified in section 4.3 below) to which interest has been paid or duly
provided for.
4.3 INTEREST PAYMENT DATES. Unless otherwise specified in any applicable
Addendum, the Interest Payment Dates on which interest on the Notes shall be
paid or duly provided for shall be semiannually on February 1 and August 1 in
each year, commencing on such date as shall be specified in any applicable,
Addendum. 4.4 Regular Record Dates. Unless otherwise specified in any applicable
Addendum. the Regular Record Dates for the interest on the Notes so payable on
any Interest Payment Date (as specified in Section 4.3 above) shall be the
January 15 or July 15 (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date.
5. PLACE OF PAYMENT. Principal of, and premium, if any, on, and interest
payable upon maturity or earlier redemption of, the Notes shall be payable at
the office or agency of the company maintained for that purpose in the Borough
of Manhattan, the City of New York, New York (the "Paying Agent"). Interest on
the Notes, other than interest payable at maturity or earlier redemption, shall
be payable by check mailed to the registered address of the holder of record on
the Regular Record Date for such interest payment. Unless otherwise designated
by the company in a written notice to the Trustee, the office or agency in the
Borough of Manhattan for the above purpose shall be the Corporate Trust Office
of the Trustee. Notwithstanding the foregoing, (a) interest on any Note held in
the name of a nominee of the Depository (as defined in Section 13.2 below) shall
be payable by wire transfer of immediately available funds and (b) interest on
any Certificated Note (as defined in Section 13.2 below) held by a holder of
$10,000,000 or more in aggregate principal amount of Certificated Notes having
the same Interest Payment Dates shall be entitled to receive payments of
interest by wire transfer of immediately available funds upon written request to
the Paying Agent not later than 15 calendar days prior to the applicable
Interest Payment Date.
6. REDEMPTION. The Notes may be subject to redemption prior to Maturity at
the option of the Company, as a whole at any time or in part from time to time,
otherwise than through operation of a sinking fund, at such Redemption Prices
(expressed as percentages of the principal amount) prevailing during such
periods of time as shall be specified in any applicable Addendum, in each case
together with accrued interest to the Redemption Date.
7. SINKING FUND. The Notes may be entitled to the benefit of a sinking
fund requiring payments by the Company to the Trustee at such times, in amounts
sufficient to redeem such principal amount of the Notes at such sinking fund
redemption price, with such right of the Company to increase such payments or to
deliver Notes or to apply Notes previously delivered in satisfaction of such
sinking fund requirements, and with such credit to the Company for previously
increased sinking fund payments, in each case as shall be specified in any
applicable Addendum.
8. DENOMINATIONS. Unless otherwise specified in any applicable
Addendum, the Notes shall be issuable in denominations of $100,000 or any
amount in excess thereof which is an integral multiple of $1,000.
9. CONVERTIBILITY. The Notes shall not be convertible into shares of
capital stock or other securities of the Company.
10. REPAYMENT. Except as provided in Sections 7 and 11 hereof, the
Company shall have no obligation to repay the Notes (at the option of Holders
or otherwise) prior to the Maturity of the Notes (as specified in Section 3
above).
11. ACCELERATION. The entire principal amount of the Notes (and not a
portion thereof) shall be payable upon declaration of acceleration of the
Maturity of any Note pursuant to Section 502 of the Indenture.
12. SECTION 403 OF INDENTURE. Section 403 of the Indenture shall
apply to the Notes.
13.1 ADDITIONAL COVENANTS. No additional covenants shall be
applicable in respect of the Notes.
13.2 NOTES ISSUABLE AS GLOBAL SECURITIES. Each Note will be represented
either by a Global Note registered in the name of a nominee of The Depository
Trust Company, as Depository (a "Book-Entry Note"), or by a certificate issued
in definitive or temporary form (a "Certified Note"), as specified in the
applicable Addendum. Each Global Note representing Book-Entry Notes will be
deposited with The Depository Trust Company, New York, New York (the
"Depository"), and registered in the name of a nominee of the Depository.
Certificated Notes will not be exchangeable for Book-Entry Notes and, except
under the circumstances described below, Book-Entry Notes will not be
exchangeable for Certificated Notes and will not otherwise be issuable as
Certificated Notes.
So long as the Depository's nominee is the registered owner of a Global
Note, such nominee will be considered to be the sole owner or Holder of the
Notes represented by such Global Note for all purposes of the Indenture. Except
as set forth below, owners of beneficial interests in a Global Note will not be
entitled to have the Notes represented by, such Global Note registered in their
names, will not receive or be entitled to receive physical delivery of such
Notes in definitive form, and will not be considered to be the owners or Holders
thereof under the Indenture.
If the Depository is at any time unwilling or unable to continue to act as
Depository, and a successor depository is not appointed by the Company within 90
days, the Company will issue Certificated Notes in definitive form in exchange
for the Global Note or Notes previously deposited with the Depository. In
addition, the Company may at any time in its sole discretion determine not to
have the Notes represented by one or more Global Notes and, in such event, will
issue Certificated Notes in definitive form in exchange for such Global Note or
Notes.
13.3 OTHER PROVISIONS. The Notes shall have no other terms than as set
forth in this Board Resolution (including any Addenda) and the Indenture or as
may be set forth in any indenture or indentures supplemental to the Indenture.
13.4 INDEMNIFICATION. The Company agrees to indemnify the Trustee for, and
to hold it harmless against, any loss, liability or expense incurred without
negligence or bad faith on its part, arising out of or in connection with the
acceptance or administration of the duties set forth in those certain
Administrative Procedures, which comprise a part of that certain Distribution
Agreement, to be dated on or about August 20, 1991, between the Company and the
Agents named therein (the "Administrative Procedures"), relating to the Notes,
as though such Administrative Procedures were set forth in the Indenture.
Capitalized terms used in this Board Resolution have the meanings set forth in
the Indenture unless otherwise indicated or the context otherwise requires.
The meeting adjourned at 2:45 p.m.
s/ Audrey C. Moeller
--------------------
Secretary
<PAGE>
Exhibit 4.01 (g)
EQUITABLE RESOURCES, INC.
ADDENDUM NO. 1 TO BOARD RESOLUTION
Establishing Certain Terms and Provisions
of an Issue of Medium-Term Notes, Series A
Pursuant to the Board Resolution
Adopted August 19, 1991
RESOLVED, that, as contemplated by the Board Resolution adopted August 19,
1991, there is hereby established for authentication and delivery by the Trustee
an issue of the Medium-Term Notes, Series A of the company having the following
terms and provisions in addition to the terms and provisions established by the
Indenture and the aforesaid Board Resolution:
1. Principal Amount. $5,000,000.
2. Maturity Date. September 1, 2021.
3.1. Interest Rate. 9% per annum.
3.2. Interest Payment Dates. February 1 and August 1, commencing
February 1, 1992.
4. Notes Issuable as Global Securities. The Notes of this issue
shall be issuable only as Global Notes, except under the circumstances
described in the Board Resolution.
5. Price to the Public. 100%.
Capitalized terms used in this Addendum to Board Resolution have the
meanings set forth in the Board Resolution unless otherwise indicated or the
context otherwise requires.
In response to certain provisions of the orders of the Pennsylvania Public
Utility Commission and the Kentucky Public Service Commission, it is noted that
the interest rate set forth above represents a premium of 88 basis points over
the corresponding Treasury rate.
WITNESS the due execution hereof this 29th day of August, 1991.
s/ Robert E. Daley
--------------------------
Vice President & Treasurer
<PAGE>
Exhibit 4.01 (g)
EQUITABLE RESOURCES, INC.
ADDENDUM NO. 2 TO BOARD RESOLUTION
Establishing Certain Terms and Provisions
of an Issue of Medium-Term Notes, Series A
Pursuant to the Board Resolution
Adopted August 19, 1991
RESOLVED, that, as contemplated by the Board Resolution adopted August 19,
1991, there is hereby established for authentication and delivery by the Trustee
an issue of the Medium-Term Notes, Series A of the company having the following
terms and provisions in addition to the terms and provisions established by the
Indenture and the aforesaid Board Resolution:
1. Principal Amount. $2,000,000.
2. Maturity Date. September 1, 2021.
3.1. Interest Rate. 8.99% per annum.
3.2. Interest Payment Dates. February 1 and August 1, commencing
February 1, 1992.
4. Notes Issuable as Global Securities. The Notes of this issue
shall be issuable only as Global Notes, except under the circumstances
described in the Board Resolution.
5. Price to the Public. 100%.
Capitalized terms used in this Addendum to Board Resolution have the
meanings set forth in the Board Resolution unless otherwise indicated or the
context otherwise requires.
In response to certain provisions of the orders of the Pennsylvania Public
Utility Commission and the Kentucky Public Service Commission, it is noted that
the interest rate set forth above represents a premium of 88 basis points over
the corresponding Treasury rate.
WITNESS the due execution hereof this 3rd day of September, 1991.
s/ Robert E. Daley
--------------------------
Vice President & Treasurer
<PAGE>
Exhibit 4.01 (g)
EQUITABLE RESOURCES, INC.
ADDENDUM NO. 3 TO BOARD RESOLUTION
Establishing Certain Terms and Provisions
of an Issue of Medium-Term Notes, Series A
Pursuant to the Board Resolution
Adopted August 19, 1991
RESOLVED, that, as contemplated by the Board Resolution adopted August 19,
1991, there is hereby established for authentication and delivery by the Trustee
an issue of the Medium-Term Notes, Series A of the company having the following
terms and provisions in addition to the terms and provisions established by the
Indenture and the aforesaid Board Resolution:
1. Principal Amount. $5,000,000.
2. Maturity Date. September 1, 2003.
3.1. Interest Rate. 8.55% per annum.
3.2. Interest Payment Dates. February 1 and August 1, commencing
February 1, 1992.
4. Notes Issuable as Global Securities. The Notes of this issue
shall be issuable only as Global Notes, except under the circumstances
described in the Board Resolution.
5. Price to the Public. 100%.
Capitalized terms used in this Addendum to Board Resolution have the
meanings set forth in the Board Resolution unless otherwise indicated or the
context otherwise requires.
In response to certain provisions of the orders of the Pennsylvania Public
Utility Commission and the Kentucky Public Service Commission, it is noted that
the interest rate set forth above represents a premium of 75 basis points over
the corresponding Treasury rate.
WITNESS the due execution hereof this 6th day of September, 1991.
s/ Robert E. Daley
--------------------------
Vice President & Treasurer
<PAGE>
Exhibit 4.01 (g)
EQUITABLE RESOURCES, INC.
ADDENDUM NO. 4 TO BOARD RESOLUTION
Establishing Certain Terms and Provisions
of an Issue of Medium-Term Notes, Series A
Pursuant to the Board Resolution
Adopted August 19, 1991
RESOLVED, that, as contemplated by the Board Resolution adopted August 19,
1991, there is hereby established for authentication and delivery by the Trustee
an issue of the Medium-Term Notes, Series A of the company having the following
terms and provisions in addition to the terms and provisions established by the
Indenture and the aforesaid Board Resolution:
1. Principal Amount. $2,000,000.
2. Maturity Date. September 1, 2003.
3.1. Interest Rate. 8.55% per annum.
3.2. Interest Payment Dates. February 1 and August 1, commencing
February 1, 1992.
4. Notes Issuable as Global Securities. The Notes of this issue
shall be issuable only as Global Notes, except under the circumstances
described in the Board Resolution.
5. Price to the Public. 100%.
Capitalized terms used in this Addendum to Board Resolution have the
meanings set forth in the Board Resolution unless otherwise indicated or the
context otherwise requires.
In response to certain provisions of the orders of the Pennsylvania Public
Utility Commission and the Kentucky Public Service Commission, it is noted that
the interest rate set forth above represents a premium of 73 basis points over
the corresponding Treasury rate.
WITNESS the due execution hereof this 6th day of September, 1991.
s/ Robert E. Daley
--------------------------
Vice President & Treasurer
<PAGE>
Exhibit 4.01 (g) Exhibit 4.01 (g)
EQUITABLE RESOURCES, INC.
ADDENDUM NO. 5 TO BOARD RESOLUTION
Establishing Certain Terms and Provisions
of an Issue of Medium-Term Notes, Series A
Pursuant to the Board Resolution
Adopted August 19, 1991
RESOLVED, that, as contemplated by the Board Resolution adopted August 19,
1991, there is hereby established for authentication and delivery by the Trustee
an issue of the Medium-Term Notes, Series A of the company having the following
terms and provisions in addition to the terms and provisions established by the
Indenture and the aforesaid Board Resolution:
1. Principal Amount. $6,000,000.
2. Maturity Date. September 1, 2003.
3.1. Interest Rate. 8.52% per annum.
3.2. Interest Payment Dates. February 1 and August 1, commencing
February 1, 1992.
4. Notes Issuable as Global Securities. The Notes of this issue
shall be issuable only as Global Notes, except under the circumstances
described in the Board Resolution.
5. Price to the Public. 100%.
Capitalized terms used in this Addendum to Board Resolution have the
meanings set forth in the Board Resolution unless otherwise indicated or the
context otherwise requires.
In response to certain provisions of the orders of the Pennsylvania Public
Utility Commission and the Kentucky Public Service Commission, it is noted that
the interest rate set forth above represents a premium of 74 basis points over
the corresponding Treasury rate.
WITNESS the due execution hereof this 6th day of September, 1991.
s/ Robert E. Daley
--------------------------
Vice President & Treasurer
<PAGE>
Exhibit 4.01 (g)
EQUITABLE RESOURCES, INC.
ADDENDUM NO. 6-A TO BOARD RESOLUTION
Establishing Certain Terms and Provisions
of an Issue of Medium-Term Notes, Series A
Pursuant to the Board Resolution
Adopted August 19, 1991
RESOLVED, That, as contemplated by the Board Resolution adopted August 19,
1991, there is hereby established for authentication and delivery by the Trustee
an issue of the Medium-Term Notes, Series A of the Company having the following
terms and provisions in addition to the terms and provisions established by the
Indenture and the aforesaid Board Resolution:
1. Principal Amount. $5,000,000.
2. Maturity Date. September 1, 2003.
3.1. Interest Rate. 8.55% per annum.
3.2. Interest Payment Dates. February 1 and August 1, commencing
February 1, 1992.
4. Notes Issuable as Global Securities. The Notes of this issue
shall be issuable only as Global Notes, except under the circumstances
described in the Board Resolution.
5. Price to the Public. 100%.
Resolved Further, That Addendum No. 3 hereby is rescinded and replaced
by this Addendum No. 6-A.
Capitalized terms used in this Addendum to Board Resolution have the
meanings set forth in the Board Resolution unless otherwise indicated or the
context otherwise requires. In response to certain provisions of the Orders of
the Pennsylvania Public Utility Commission and the Kentucky Public Service
Commission, It is noted that the interest rate set forth above represents a
premium of 75 basis points over the corresponding Treasury rate.
WITNESS the due execution hereof this 6th day of September, 1991.
s/ Robert E. Daley
--------------------------
Vice President & Treasurer
<PAGE>
Exhibit 4.01 (g)
EQUITABLE RESOURCES, INC.
ADDENDUM NO. 6-B TO BOARD RESOLUTION
Establishing Certain Terms and Provisions
of an Issue of Medium-Term Notes, Series A
Pursuant to the Board Resolution
Adopted August 19, 1991
RESOLVED, That, as contemplated by the Board Resolution adopted August 19,
1991, there is hereby established for authentication and delivery by the Trustee
an issue of the Medium-Term Notes, Series A of the Company having the following
terms and provisions in addition to the terms and provisions established by the
Indenture and the aforesaid Board Resolution:
1. Principal Amount. $2,000,000.
2. Maturity Date. September 1, 2003.
3.1. Interest Rate. 8.55% per annum.
3.2. Interest Payment Dates. February 1 and August 1, commencing
February 1, 1992.
4. Notes Issuable as Global Securities. The Notes of this issue
shall be issuable only as Global Notes, except under the circumstances
described in the Board Resolution.
5. Price to the Public. 100%.
Resolved Further, That Addendum No. 4 hereby is rescinded and replaced
by this Addendum No. 6-B.
Capitalized terms used in this Addendum to Board Resolution have the
meanings set forth in the Board Resolution unless otherwise indicated or the
context otherwise requires. In response to certain provisions of the Orders of
the Pennsylvania Public Utility Commission and the Kentucky Public Service
Commission, It is noted that the interest rate set forth above represents a
premium of 73 basis points over the corresponding Treasury rate.
WITNESS the due execution hereof this 6th day of September, 1991.
s/ Robert E. Daley
--------------------------
Vice President & Treasurer
<PAGE>
Exhibit 4.01 (g)
EQUITABLE RESOURCES, INC.
ADDENDUM NO. 7 TO BOARD RESOLUTION
Establishing Certain Terms and Provisions
of an Issue of Medium-Term Notes, Series A
Pursuant to the Board Resolution
Adopted August 19, 1991
RESOLVED, that, as contemplated by the Board Resolution adopted August 19,
1991, there is hereby established for authentication and delivery by the Trustee
an issue of the Medium-Term Notes, Series A of the company having the following
terms and provisions in addition to the terms and provisions established by the
Indenture and the aforesaid Board Resolution:
1. Principal Amount. $1,000,000.
2. Maturity Date. September 20, 2006.
3.1. Interest Rate. 8.50% per annum.
3.2. Interest Payment Dates. February 1 and August 1, commencing
February 1, 1992.
4. Notes Issuable as Global Securities. The Notes of this issue
shall be issuable only as Global Notes, except under the circumstances
described in the Board Resolution.
5. Price to the Public. 100%.
Capitalized terms used in this Addendum to Board Resolution have the
meanings set forth in the Board Resolution unless otherwise indicated or the
context otherwise requires.
In response to certain provisions of the orders of the Pennsylvania Public
Utility Commission and the Kentucky Public Service Commission, it is noted that
the interest rate set forth above represents a premium of 77 basis points over
the corresponding Treasury rate.
WITNESS the due execution hereof this 10th day of September, 1991.
s/ Robert E. Daley
--------------------------
Vice President & Treasurer
<PAGE>
Exhibit 4.01 (g)
EQUITABLE RESOURCES, INC.
ADDENDUM NO. 8 TO BOARD RESOLUTION
Establishing Certain Terms and Provisions
of an Issue of Medium-Term Notes, Series A
Pursuant to the Board Resolution
Adopted August 19, 1991
RESOLVED, that, as contemplated by the Board Resolution adopted August 19,
1991, there is hereby established for authentication and delivery by the Trustee
an issue of the Medium-Term Notes, Series A of the company having the following
terms and provisions in addition to the terms and provisions established by the
Indenture and the aforesaid Board Resolution:
1. Principal Amount. $2,000,000.
2. Maturity Date. September 1, 2009.
3.1. Interest Rate. 8.82% per annum.
3.2. Interest Payment Dates. February 1 and August 1, commencing
February 1, 1992.
4. Notes Issuable as Global Securities. The Notes of this issue
shall be issuable only as Global Notes, except under the circumstances
described in the Board Resolution.
5. Price to the Public. 100%.
Capitalized terms used in this Addendum to Board Resolution have the
meanings set forth in the Board Resolution unless otherwise indicated or the
context otherwise requires.
In response to certain provisions of the orders of the Pennsylvania Public
Utility Commission and the Kentucky Public Service Commission, it is noted that
the interest rate set forth above represents a premium of 82 basis points over
the corresponding Treasury rate.
WITNESS the due execution hereof this 10th day of September, 1991.
s/ Robert E. Daley
--------------------------
Vice President & Treasurer
<PAGE>
Exhibit 4.01 (g)
EQUITABLE RESOURCES, INC.
ADDENDUM NO. 9 TO BOARD RESOLUTION
Establishing Certain Terms and Provisions
of an Issue of Medium-Term Notes, Series A
Pursuant to the Board Resolution
Adopted August 19, 1991
RESOLVED, that, as contemplated by the Board Resolution adopted August 19,
1991, there is hereby established for authentication and delivery by the Trustee
an issue of the Medium-Term Notes, Series A of the company having the following
terms and provisions in addition to the terms and provisions established by the
Indenture and the aforesaid Board Resolution:
1. Principal Amount. $2,000,000.
2. Maturity Date. September 18, 2006.
3.1. Interest Rate. 8.50% per annum.
3.2. Interest Payment Dates. February 1 and August 1, commencing
February 1, 1992.
4. Notes Issuable as Global Securities. The Notes of this issue
shall be issuable only as Global Notes, except under the circumstances
described in the Board Resolution.
5. Price to the Public. 100%.
Capitalized terms used in this Addendum to Board Resolution have the
meanings set forth in the Board Resolution unless otherwise indicated or the
context otherwise requires.
In response to certain provisions of the orders of the Pennsylvania Public
Utility Commission and the Kentucky Public Service Commission, it is noted that
the interest rate set forth above represents a premium of 77 basis points over
the corresponding Treasury rate.
WITNESS the due execution hereof this 10th day of September, 1991.
s/ Robert E. Daley
--------------------------
Vice President & Treasurer
<PAGE>
Exhibit 4.01 (g)
EQUITABLE RESOURCES, INC.
ADDENDUM NO. 10 TO BOARD RESOLUTION
Establishing Certain Terms and Provisions
of an Issue of Medium-Term Notes, Series A
Pursuant to the Board Resolution
Adopted August 19, 1991
RESOLVED, that, as contemplated by the Board Resolution adopted August 19,
1991, there is hereby established for authentication and delivery by the Trustee
an issue of the Medium-Term Notes, Series A of the company having the following
terms and provisions in addition to the terms and provisions established by the
Indenture and the aforesaid Board Resolution:
1. Principal Amount. $3,000,000.
2. Maturity Date. September 20, 2006.
3.1. Interest Rate. 8.44% per annum.
3.2. Interest Payment Dates. February 1 and August 1, commencing
February 1, 1992.
4. Notes Issuable as Global Securities. The Notes of this issue
shall be issuable only as Global Notes, except under the circumstances
described in the Board Resolution.
5. Price to the Public. 100%.
Capitalized terms used in this Addendum to Board Resolution have the
meanings set forth in the Board Resolution unless otherwise indicated or the
context otherwise requires.
In response to certain provisions of the orders of the Pennsylvania Public
Utility Commission and the Kentucky Public Service Commission, it is noted that
the interest rate set forth above represents a premium of 78 basis points over
the corresponding Treasury rate.
WITNESS the due execution hereof this 13th day of September, 1991.
s/ Robert E. Daley
--------------------------
Vice President & Treasurer
<PAGE>
Exhibit 4.01 (g)
EQUITABLE RESOURCES, INC.
ADDENDUM NO. 11 TO BOARD RESOLUTION
Establishing Certain Terms and Provisions
of an Issue of Medium-Term Notes, Series A
Pursuant to the Board Resolution
Adopted August 19, 1991
RESOLVED, that, as contemplated by the Board Resolution adopted August 19,
1991, there is hereby established for authentication and delivery by the Trustee
an issue of the Medium-Term Notes, Series A of the company having the following
terms and provisions in addition to the terms and provisions established by the
Indenture and the aforesaid Board Resolution:
1. Principal Amount. $5,000,000.
2. Maturity Date. September 1, 2021.
3.1. Interest Rate. 9.00% per annum.
3.2. Interest Payment Dates. February 1 and August 1, commencing
February 1, 1992.
4. Notes Issuable as Global Securities. The Notes of this issue
shall be issuable only as Global Notes, except under the circumstances
described in the Board Resolution.
5. Price to the Public. 100%.
Capitalized terms used in this Addendum to Board Resolution have the
meanings set forth in the Board Resolution unless otherwise indicated or the
context otherwise requires.
In response to certain provisions of the orders of the Pennsylvania Public
Utility Commission and the Kentucky Public Service Commission, it is noted that
the interest rate set forth above represents a premium of 104 basis points over
the corresponding Treasury rate.
WITNESS the due execution hereof this 13th day of September, 1991.
s/ Robert E. Daley
--------------------------
Vice President & Treasurer
<PAGE>
Exhibit 4.01 (g)
EQUITABLE RESOURCES, INC.
ADDENDUM NO. 12 TO BOARD RESOLUTION
Establishing Certain Terms and Provisions
of an Issue of Medium-Term Notes, Series A
Pursuant to the Board Resolution
Adopted August 19, 1991
RESOLVED, that, as contemplated by the Board Resolution adopted August 19,
1991, there is hereby established for authentication and delivery by the Trustee
an issue of the Medium-Term Notes, Series A of the company having the following
terms and provisions in addition to the terms and provisions established by the
Indenture and the aforesaid Board Resolution:
1. Principal Amount. $10,000,000.
2. Maturity Date. September 1, 2021.
3.1. Interest Rate. 8.98% per annum.
3.2. Interest Payment Dates. February 1 and August 1, commencing
February 1, 1992.
4. Notes Issuable as Global Securities. The Notes of this issue
shall be issuable only as Global Notes, except under the circumstances
described in the Board Resolution.
5. Price to the Public. 100%.
Capitalized terms used in this Addendum to Board Resolution have the
meanings set forth in the Board Resolution unless otherwise indicated or the
context otherwise requires.
In response to certain provisions of the orders of the Pennsylvania Public
Utility Commission and the Kentucky Public Service Commission, it is noted that
the interest rate set forth above represents a premium of 104 basis points over
the corresponding Treasury rate.
WITNESS the due execution hereof this 16th day of September, 1991.
s/ Robert E. Daley
--------------------------
Vice President & Treasurer
<PAGE>
Exhibit 4.01 (g)
EQUITABLE RESOURCES, INC.
ADDENDUM NO. 13 TO BOARD RESOLUTION
Establishing Certain Terms and Provisions
of an Issue of Medium-Term Notes, Series A
Pursuant to the Board Resolution
Adopted August 19, 1991
RESOLVED, that, as contemplated by the Board Resolution adopted August 19,
1991, there is hereby established for authentication and delivery by the Trustee
an issue of the Medium-Term Notes, Series A of the company having the following
terms and provisions in addition to the terms and provisions established by the
Indenture and the aforesaid Board Resolution:
1. Principal Amount. $7,000,000.
2. Maturity Date. October 1, 2021.
3.1. Interest Rate. 8.93% per annum.
3.2. Interest Payment Dates. February 1 and August 1, commencing
February 1, 1992.
4. Notes Issuable as Global Securities. The Notes of this issue
shall be issuable only as Global Notes, except under the circumstances
described in the Board Resolution.
5. Price to the Public. 100%.
Capitalized terms used in this Addendum to Board Resolution have the
meanings set forth in the Board Resolution unless otherwise indicated or the
context otherwise requires.
In response to certain provisions of the orders of the Pennsylvania Public
Utility Commission and the Kentucky Public Service Commission, it is noted that
the interest rate set forth above represents a premium of 100 basis points over
the corresponding Treasury rate.
WITNESS the due execution hereof this 16th day of September, 1991.
s/ Robert E. Daley
--------------------------
Vice President & Treasurer
<PAGE>
Exhibit 4.01 (g)
EQUITABLE RESOURCES, INC.
ADDENDUM NO. 14 TO BOARD RESOLUTION
Establishing Certain Terms and Provisions
of an Issue of Medium-Term Notes, Series A
Pursuant to the Board Resolution
Adopted August 19, 1991
RESOLVED, that, as contemplated by the Board Resolution adopted August 19,
1991, there is hereby established for authentication and delivery by the Trustee
an issue of the Medium-Term Notes, Series A of the company having the following
terms and provisions in addition to the terms and provisions established by the
Indenture and the aforesaid Board Resolution:
1. Principal Amount. $1,000,000.
2. Maturity Date. November 1, 2001.
3.1. Interest Rate. 8.19% per annum.
3.2. Interest Payment Dates. February 1 and August 1, commencing
February 1, 1992.
4. Notes Issuable as Global Securities. The Notes of this issue
shall be issuable only as Global Notes, except under the circumstances
described in the Board Resolution.
5. Price to the Public. 100%.
Capitalized terms used in this Addendum to Board Resolution have the
meanings set forth in the Board Resolution unless otherwise indicated or the
context otherwise requires.
In response to certain provisions of the orders of the Pennsylvania Public
Utility Commission and the Kentucky Public Service Commission, it is noted that
the interest rate set forth above represents a premium of 73 basis points over
the corresponding Treasury rate.
WITNESS the due execution hereof this 2nd day of October, 1991.
s/ Robert E. Daley
--------------------------
Vice President & Treasurer
<PAGE>
Exhibit 4.01 (g)
EQUITABLE RESOURCES, INC.
ADDENDUM NO. 15A TO BOARD RESOLUTION
Establishing Certain Terms and Provisions
of an Issue of Medium-Term Notes, Series A
Pursuant to the Board Resolution
Adopted August 19, 1991
RESOLVED, that, as contemplated by the Board Resolution adopted August 19,
1991, there is hereby established for authentication and delivery by the Trustee
an issue of the Medium-Term Notes, Series A of the company having the following
terms and provisions in addition to the terms and provisions established by the
Indenture and the aforesaid Board Resolution:
1. Principal Amount. $5,000,000.
2. Maturity Date. October 1, 2020.
3.1. Interest Rate. 8.88% per annum.
3.2. Interest Payment Dates. February 1 and August 1, commencing
February 1, 1992.
4. Notes Issuable as Global Securities. The Notes of this issue
shall be issuable only as Global Notes, except under the circumstances
described in the Board Resolution.
5. Price to the Public. 100%.
Capitalized terms used in this Addendum to Board Resolution have the
meanings set forth in the Board Resolution unless otherwise indicated or the
context otherwise requires.
In response to certain provisions of the orders of the Pennsylvania Public
Utility Commission and the Kentucky Public Service Commission, it is noted that
the interest rate set forth above represents a premium of 105 basis points over
the corresponding Treasury rate.
WITNESS the due execution hereof this 2nd day of October, 1991.
s/ Robert E. Daley
--------------------------
Vice President & Treasurer
<PAGE>
Exhibit 4.01 (g)
EQUITABLE RESOURCES, INC.
ADDENDUM NO. 15B TO BOARD RESOLUTION
Establishing Certain Terms and Provisions
of an Issue of Medium-Term Notes, Series A
Pursuant to the Board Resolution
Adopted August 19, 1991
RESOLVED, that, as contemplated by the Board Resolution adopted August 19,
1991, there is hereby established for authentication and delivery by the Trustee
an issue of the Medium-Term Notes, Series A of the company having the following
terms and provisions in addition to the terms and provisions established by the
Indenture and the aforesaid Board Resolution:
1. Principal Amount. $3,000,000.
2. Maturity Date. October 1, 2020.
3.1. Interest Rate. 8.88% per annum.
3.2. Interest Payment Dates. February 1 and August 1, commencing
February 1, 1992.
4. Notes Issuable as Global Securities. The Notes of this issue
shall be issuable only as Global Notes, except under the circumstances
described in the Board Resolution.
5. Price to the Public. 100%.
Capitalized terms used in this Addendum to Board Resolution have the
meanings set forth in the Board Resolution unless otherwise indicated or the
context otherwise requires.
In response to certain provisions of the orders of the Pennsylvania Public
Utility Commission and the Kentucky Public Service Commission, it is noted that
the interest rate set forth above represents a premium of 103 basis points over
the corresponding Treasury rate.
WITNESS the due execution hereof this 2nd day of October, 1991.
s/ Robert E. Daley
--------------------------
Vice President & Treasurer
<PAGE>
Exhibit 4.01 (g)
EQUITABLE RESOURCES, INC.
ADDENDUM NO. 16 TO BOARD RESOLUTION
Establishing Certain Terms and Provisions
of an Issue of Medium-Term Notes, Series A
Pursuant to the Board Resolution
Adopted August 19, 1991
RESOLVED, that, as contemplated by the Board Resolution adopted August 19,
1991, there is hereby established for authentication and delivery by the Trustee
an issue of the Medium-Term Notes, Series A of the company having the following
terms and provisions in addition to the terms and provisions established by the
Indenture and the aforesaid Board Resolution:
1. Principal Amount. $1,000,000.
2. Maturity Date. October 10, 2001.
3.1. Interest Rate. 8.17% per annum.
3.2. Interest Payment Dates. February 1 and August 1, commencing
February 1, 1992.
4. Notes Issuable as Global Securities. The Notes of this issue
shall be issuable only as Global Notes, except under the circumstances
described in the Board Resolution.
5. Price to the Public. 100%.
Capitalized terms used in this Addendum to Board Resolution have the
meanings set forth in the Board Resolution unless otherwise indicated or the
context otherwise requires.
In response to certain provisions of the orders of the Pennsylvania Public
Utility Commission and the Kentucky Public Service Commission, it is noted that
the interest rate set forth above represents a premium of 70 basis points over
the corresponding Treasury rate.
WITNESS the due execution hereof this 2nd day of October, 1991.
s/ Robert E. Daley
--------------------------
Vice President & Treasurer
<PAGE>
Exhibit 4.01 (g)
EQUITABLE RESOURCES, INC.
ADDENDUM NO. 17 TO BOARD RESOLUTION
Establishing Certain Terms and Provisions
of an Issue of Medium-Term Notes, Series A
Pursuant to the Board Resolution
Adopted August 19, 1991
RESOLVED, that, as contemplated by the Board Resolution adopted August 19,
1991, there is hereby established for authentication and delivery by the Trustee
an issue of the Medium-Term Notes, Series A of the company having the following
terms and provisions in addition to the terms and provisions established by the
Indenture and the aforesaid Board Resolution:
1. Principal Amount. $1,000,000.
2. Maturity Date. November 1, 2011.
3.1. Interest Rate. 8.79% per annum.
3.2. Interest Payment Dates. February 1 and August 1, commencing
February 1, 1992.
4. Notes Issuable as Global Securities. The Notes of this issue
shall be issuable only as Global Notes, except under the circumstances
described in the Board Resolution.
5. Price to the Public. 100%.
Capitalized terms used in this Addendum to Board Resolution have the
meanings set forth in the Board Resolution unless otherwise indicated or the
context otherwise requires.
In response to certain provisions of the orders of the Pennsylvania Public
Utility Commission and the Kentucky Public Service Commission, it is noted that
the interest rate set forth above represents a premium of 94 basis points over
the corresponding Treasury rate.
WITNESS the due execution hereof this 3rd day of October, 1991.
s/ Robert E. Daley
--------------------------
Vice President & Treasurer
<PAGE>
Exhibit 4.01 (g)
EQUITABLE RESOURCES, INC.
ADDENDUM NO. 18 TO BOARD RESOLUTION
Establishing Certain Terms and Provisions
of an Issue of Medium-Term Notes, Series A
Pursuant to the Board Resolution
Adopted August 19, 1991
RESOLVED, that, as contemplated by the Board Resolution adopted August 19,
1991, there is hereby established for authentication and delivery by the Trustee
an issue of the Medium-Term Notes, Series A of the company having the following
terms and provisions in addition to the terms and provisions established by the
Indenture and the aforesaid Board Resolution:
1. Principal Amount. $1,000,000.
2. Maturity Date. November 1, 2001.
3.1. Interest Rate. 8.16% per annum.
3.2. Interest Payment Dates. February 1 and August 1, commencing
February 1, 1992.
4. Notes Issuable as Global Securities. The Notes of this issue
shall be issuable only as Global Notes, except under the circumstances
described in the Board Resolution.
5. Price to the Public. 100%.
Capitalized terms used in this Addendum to Board Resolution have the
meanings set forth in the Board Resolution unless otherwise indicated or the
context otherwise requires.
In response to certain provisions of the orders of the Pennsylvania Public
Utility Commission and the Kentucky Public Service Commission, it is noted that
the interest rate set forth above represents a premium of 73 basis points over
the corresponding Treasury rate.
WITNESS the due execution hereof this 4th day of October, 1991.
s/ Robert E. Daley
--------------------------
Vice President & Treasurer
<PAGE>
Exhibit 4.01 (g)
EQUITABLE RESOURCES, INC.
ADDENDUM NO. 19 TO BOARD RESOLUTION
Establishing Certain Terms and Provisions
of an Issue of Medium-Term Notes, Series A
Pursuant to the Board Resolution
Adopted August 19, 1991
RESOLVED, that, as contemplated by the Board Resolution adopted August 19,
1991, there is hereby established for authentication and delivery by the Trustee
an issue of the Medium-Term Notes, Series A of the company having the following
terms and provisions in addition to the terms and provisions established by the
Indenture and the aforesaid Board Resolution:
1. Principal Amount. $3,200,000.
2. Maturity Date. October 1, 2020.
3.1. Interest Rate. 8.81% per annum.
3.2. Interest Payment Dates. February 1 and August 1, commencing
February 1, 1992.
4. Notes Issuable as Global Securities. The Notes of this issue
shall be issuable only as Global Notes, except under the circumstances
described in the Board Resolution.
5. Price to the Public. 100%.
Capitalized terms used in this Addendum to Board Resolution have the
meanings set forth in the Board Resolution unless otherwise indicated or the
context otherwise requires.
In response to certain provisions of the orders of the Pennsylvania Public
Utility Commission and the Kentucky Public Service Commission, it is noted that
the interest rate set forth above represents a premium of 100 basis points over
the corresponding Treasury rate.
WITNESS the due execution hereof this 8th day of October, 1991.
s/ Robert E. Daley
--------------------------
Vice President & Treasurer
<PAGE>
Exhibit 4.01 (g)
EQUITABLE RESOURCES, INC.
ADDENDUM NO. 20 TO BOARD RESOLUTION
Establishing Certain Terms and Provisions
of an Issue of Medium-Term Notes, Series A
Pursuant to the Board Resolution
Adopted August 19, 1991
RESOLVED, that, as contemplated by the Board Resolution adopted August 19,
1991, there is hereby established for authentication and delivery by the Trustee
an issue of the Medium-Term Notes, Series A of the company having the following
terms and provisions in addition to the terms and provisions established by the
Indenture and the aforesaid Board Resolution:
1. Principal Amount. $5,000,000.
2. Maturity Date. November 1, 2001.
3.1. Interest Rate. 8.14% per annum.
3.2. Interest Payment Dates. February 1 and August 1, commencing
February 1, 1992.
4. Notes Issuable as Global Securities. The Notes of this issue
shall be issuable only as Global Notes, except under the circumstances
described in the Board Resolution.
5. Price to the Public. 100%.
Capitalized terms used in this Addendum to Board Resolution have the
meanings set forth in the Board Resolution unless otherwise indicated or the
context otherwise requires.
In response to certain provisions of the orders of the Pennsylvania Public
Utility Commission and the Kentucky Public Service Commission, it is noted that
the interest rate set forth above represents a premium of 73 basis points over
the corresponding Treasury rate.
WITNESS the due execution hereof this 8th day of October, 1991.
s/ Robert E. Daley
--------------------------
Vice President & Treasurer
<PAGE>
Exhibit 4.01 (g)
EQUITABLE RESOURCES, INC.
ADDENDUM NO. 21 TO BOARD RESOLUTION
Establishing Certain Terms and Provisions
of an Issue of Medium-Term Notes, Series A
Pursuant to the Board Resolution
Adopted August 19, 1991
RESOLVED, that, as contemplated by the Board Resolution adopted August 19,
1991, there is hereby established for authentication and delivery by the Trustee
an issue of the Medium-Term Notes, Series A of the company having the following
terms and provisions in addition to the terms and provisions established by the
Indenture and the aforesaid Board Resolution:
1. Principal Amount. $5,000,000.
2. Maturity Date. October 1, 2009.
3.1. Interest Rate. 8.72% per annum.
3.2. Interest Payment Dates. February 1 and August 1, commencing
February 1, 1992.
4. Notes Issuable as Global Securities. The Notes of this issue
shall be issuable only as Global Notes, except under the circumstances
described in the Board Resolution.
5. Price to the Public. 100%.
Capitalized terms used in this Addendum to Board Resolution have the
meanings set forth in the Board Resolution unless otherwise indicated or the
context otherwise requires.
In response to certain provisions of the orders of the Pennsylvania Public
Utility Commission and the Kentucky Public Service Commission, it is noted that
the interest rate set forth above represents a premium of 89 basis points over
the corresponding Treasury rate.
WITNESS the due execution hereof this 8th day of October, 1991.
s/ Robert E. Daley
--------------------------
Vice President & Treasurer
<PAGE>
Exhibit 4.01 (g)
EQUITABLE RESOURCES, INC.
ADDENDUM NO. 22 TO BOARD RESOLUTION
Establishing Certain Terms and Provisions
of an Issue of Medium-Term Notes, Series A
Pursuant to the Board Resolution
Adopted August 19, 1991
RESOLVED, that, as contemplated by the Board Resolution adopted August 19,
1991, there is hereby established for authentication and delivery by the Trustee
an issue of the Medium-Term Notes, Series A of the company having the following
terms and provisions in addition to the terms and provisions established by the
Indenture and the aforesaid Board Resolution:
1. Principal Amount. $2,300,000.
2. Maturity Date. October 1, 2009.
3.1. Interest Rate. 8.75% per annum.
3.2. Interest Payment Dates. February 1 and August 1, commencing
February 1, 1992.
4. Notes Issuable as Global Securities. The Notes of this issue
shall be issuable only as Global Notes, except under the circumstances
described in the Board Resolution.
5. Price to the Public. 100%.
Capitalized terms used in this Addendum to Board Resolution have the
meanings set forth in the Board Resolution unless otherwise indicated or the
context otherwise requires.
In response to certain provisions of the orders of the Pennsylvania Public
Utility Commission and the Kentucky Public Service Commission, it is noted that
the interest rate set forth above represents a premium of 87 basis points over
the corresponding Treasury rate.
WITNESS the due execution hereof this 9th day of October, 1991.
s/ Robert E. Daley
--------------------------
Vice President & Treasurer
<PAGE>
Exhibit 4.01 (g)
EQUITABLE RESOURCES, INC.
ADDENDUM NO. 23 TO BOARD RESOLUTION
Establishing Certain Terms and Provisions
of an Issue of Medium-Term Notes, Series A
Pursuant to the Board Resolution
Adopted August 19, 1991
RESOLVED, that, as contemplated by the Board Resolution adopted August 19,
1991, there is hereby established for authentication and delivery by the Trustee
an issue of the Medium-Term Notes, Series A of the company having the following
terms and provisions in addition to the terms and provisions established by the
Indenture and the aforesaid Board Resolution:
1. Principal Amount. $1,500,000.
2. Maturity Date. November 1, 2006.
3.1. Interest Rate. 8.29% per annum.
3.2. Interest Payment Dates. February 1 and August 1, commencing
February 1, 1992.
4. Notes Issuable as Global Securities. The Notes of this issue
shall be issuable only as Global Notes, except under the circumstances
described in the Board Resolution.
5. Price to the Public. 100%.
Capitalized terms used in this Addendum to Board Resolution have the
meanings set forth in the Board Resolution unless otherwise indicated or the
context otherwise requires.
In response to certain provisions of the orders of the Pennsylvania Public
Utility Commission and the Kentucky Public Service Commission, it is noted that
the interest rate set forth above represents a premium of 70 basis points over
the corresponding Treasury rate.
WITNESS the due execution hereof this 10th day of October, 1991.
s/ Robert E. Daley
--------------------------
Vice President & Treasurer
<PAGE>
Exhibit 4.01 (g)
EQUITABLE RESOURCES, INC.
ADDENDUM NO. 24 TO BOARD RESOLUTION
Establishing Certain Terms and Provisions
of an Issue of Medium-Term Notes, Series A
Pursuant to the Board Resolution
Adopted August 19, 1991
RESOLVED, that, as contemplated by the Board Resolution adopted August 19,
1991, there is hereby established for authentication and delivery by the Trustee
an issue of the Medium-Term Notes, Series A of the company having the following
terms and provisions in addition to the terms and provisions established by the
Indenture and the aforesaid Board Resolution:
1. Principal Amount. $5,000,000.
2. Maturity Date. December 1, 2014.
3.1. Interest Rate. 8.70% per annum.
3.2. Interest Payment Dates. February 1 and August 1, commencing
February 1, 1992.
4. Notes Issuable as Global Securities. The Notes of this issue
shall be issuable only as Global Notes, except under the circumstances
described in the Board Resolution.
5. Price to the Public. 100%.
Capitalized terms used in this Addendum to Board Resolution have the
meanings set forth in the Board Resolution unless otherwise indicated or the
context otherwise requires.
In response to certain provisions of the orders of the Pennsylvania Public
Utility Commission and the Kentucky Public Service Commission, it is noted that
the interest rate set forth above represents a premium of 90 basis points over
the corresponding Treasury rate.
WITNESS the due execution hereof this 12th day of November, 1991.
s/ Robert E. Daley
--------------------------
Vice President & Treasurer
<PAGE>
Exhibit 4.01 (g)
EQUITABLE RESOURCES, INC.
ADDENDUM NO. 25 TO BOARD RESOLUTION
Establishing Certain Terms and Provisions
of an Issue of Medium-Term Notes, Series A
Pursuant to the Board Resolution
Adopted August 19, 1991
RESOLVED, that, as contemplated by the Board Resolution adopted August 19,
1991, there is hereby established for authentication and delivery by the Trustee
an issue of the Medium-Term Notes, Series A of the company having the following
terms and provisions in addition to the terms and provisions established by the
Indenture and the aforesaid Board Resolution:
1. Principal Amount. $6,000,000.
2. Maturity Date. December 3, 2001.
3.1. Interest Rate. 8.05% per annum.
3.2. Interest Payment Dates. February 1 and August 1, commencing
February 1, 1992.
4. Notes Issuable as Global Securities. The Notes of this issue
shall be issuable only as Global Notes, except under the circumstances
described in the Board Resolution.
5. Price to the Public. 100%.
Capitalized terms used in this Addendum to Board Resolution have the
meanings set forth in the Board Resolution unless otherwise indicated or the
context otherwise requires.
In response to certain provisions of the orders of the Pennsylvania Public
Utility Commission and the Kentucky Public Service Commission, it is noted that
the interest rate set forth above represents a premium of 70 basis points over
the corresponding Treasury rate.
WITNESS the due execution hereof this 12th day of November, 1991.
s/ Robert E. Daley
--------------------------
Vice President & Treasurer
<PAGE>
Exhibit 4.01 (g)
EQUITABLE RESOURCES, INC.
ADDENDUM NO. 26 TO BOARD RESOLUTION
Establishing Certain Terms and Provisions
of an Issue of Medium-Term Notes, Series A
Pursuant to the Board Resolution
Adopted August 19, 1991
RESOLVED, that, as contemplated by the Board Resolution adopted August 19,
1991, there is hereby established for authentication and delivery by the Trustee
an issue of the Medium-Term Notes, Series A of the company having the following
terms and provisions in addition to the terms and provisions established by the
Indenture and the aforesaid Board Resolution:
1. Principal Amount. $5,000,000.
2. Maturity Date. January 15, 1998.
3.1. Interest Rate. 7.24% per annum.
3.2. Interest Payment Dates. February 1 and August 1, commencing
February 1, 1992.
4. Notes Issuable as Global Securities. The Notes of this issue
shall be issuable only as Global Notes, except under the circumstances
described in the Board Resolution.
5. Price to the Public. 100%.
Capitalized terms used in this Addendum to Board Resolution have the
meanings set forth in the Board Resolution unless otherwise indicated or the
context otherwise requires.
In response to certain provisions of the orders of the Pennsylvania Public
Utility Commission and the Kentucky Public Service Commission, it is noted that
the interest rate set forth above represents a premium of 60 basis points over
the corresponding Treasury rate.
WITNESS the due execution hereof this 3rd day of December, 1991.
s/ Robert E. Daley
--------------------------
Vice President & Treasurer
<PAGE>
Exhibit 4.01 (g)
EQUITABLE RESOURCES, INC.
ADDENDUM NO. 27 TO BOARD RESOLUTION
Establishing Certain Terms and Provisions
of an Issue of Medium-Term Notes, Series A
Pursuant to the Board Resolution
Adopted August 19, 1991
RESOLVED, that, as contemplated by the Board Resolution adopted August 19,
1991, there is hereby established for authentication and delivery by the Trustee
an issue of the Medium-Term Notes, Series A of the company having the following
terms and provisions in addition to the terms and provisions established by the
Indenture and the aforesaid Board Resolution:
1. Principal Amount. $5,000,000.
2. Maturity Date. December 27, 2011.
3.1. Interest Rate. 8.48% per annum.
3.2. Interest Payment Dates. February 1 and August 1, commencing
February 1, 1992.
4. Notes Issuable as Global Securities. The Notes of this issue
shall be issuable only as Global Notes, except under the circumstances
described in the Board Resolution.
5. Price to the Public. 100%.
Capitalized terms used in this Addendum to Board Resolution have the
meanings set forth in the Board Resolution unless otherwise indicated or the
context otherwise requires.
In response to certain provisions of the orders of the Pennsylvania Public
Utility Commission and the Kentucky Public Service Commission, it is noted that
the interest rate set forth above represents a premium of 75 basis points over
the corresponding Treasury rate.
WITNESS the due execution hereof this 19th day of December, 1991.
s/ Robert E. Daley
--------------------------
Vice President & Treasurer
Exhibit 4.01 (j)
RESOLUTION ADOPTED ON JULY 18, 1996 BY THE EXECUTIVE COMMITTEE, A DULY
AUTHORIZED COMMITTEE APPOINTED BY THE BOARD OF DIRECTORS,
ESTABLISHING CERTAIN TERMS AND PROVISIONS OF THE FIRST SERIES
OF SECURITIES TO BE ISSUED UNDER THE INDENTURE DATED AS OF JULY 1, 1996 FROM
EQUITABLE RESOURCES, INC. TO THE BANK OF MONTREAL TRUST COMPANY, AS TRUSTEE
RESOLVED, That, in accordance with Section 301 of the Indenture
dated as of July 1, 1996 (the "Indenture") from Equitable Resources, Inc. (the
"Company") to the Bank of Montreal Trust Company, as trustee (the "Trustee"),
there is hereby established for authentication and delivery by the Trustee the
first series of Securities (such series being referred to herein as the
"Debentures") of the Company to be issued under the Indenture, having the
following terms and provisions in addition to the terms and provisions
established by the Indenture:
1.1 TITLE. The title of the Debentures shall be "Debentures, 7
3/4% Series due July 15, 2026."
2.1 PRINCIPAL AMOUNT. The aggregate principal amount of the
Debentures which may be authenticated and delivered under the Indenture shall
be limited to $150,000,000.
3.1 MATURITY. The principal of the Debentures shall be payable
on July 15, 2026.
4.1 INTEREST RATE. The Debentures shall bear interest at the
rate of 7 3/4% per annum until the principal thereof is paid or made
available for payment and (to the extent that the payment of such interest shall
be legally enforceable) at the same rate per annum on any overdue principal and
premium and on any overdue installment of
interest.
4.2 INTEREST ACCRUAL. Interest on the Debentures shall accrue from
the date of the original issue of any of the Debentures or from the most recent
Interest Payment Date (as specified in Section 4.3 below) to which interest has
been paid or duly provided for.
4.3 INTEREST PAYMENT DATES. The Interest Payment Dates on which
interest on the Debentures shall be paid or duly provided for shall be
semiannually on January 15 and July 15 in each year, commencing January 15,
1997.
4.4 REGULAR RECORD DATES. The Regular Record Dates for the interest
on the Debentures so payable on any Interest Payment Date (as specified in
Section 4.3 above) shall be the June 30 or December 31 (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date.
5.1 PLACE OF PAYMENT. Principal of (and premium, if any, on) the
Debentures shall be payable at the office or agency of the Company maintained
for that purpose in the Borough of Manhattan, the City of New York, New York.
Unless otherwise designated by the Company in a written notice to the Trustee,
such office or agency in the Borough of Manhattan for the above purpose shall be
the Corporate Trust Office of the Trustee. Interest on the Debentures shall be
payable by check mailed to the registered address of the holder of record on the
Regular Record Date for such interest payment.
6.1 REDEMPTION. The Debentures are nonredeemable prior to
maturity.
7.1 SINKING FUND. There will be no sinking fund for the
Debentures.
8.1 DENOMINATIONS. As contemplated by the Indenture, the
Debentures shall be issuable in denominations of $1,000 and any integral
multiple thereof.
9.1 CONVERTIBILITY. The Debentures shall not be convertible
into shares of capital stock or other securities of the Company.
10.1 REPAYMENT. Except as provided in Section 11.1 hereof, the
Company shall have no obligation to repay the Debentures (at the option of
Holders or otherwise) prior to the Maturity of the Debentures (as specified in
Section 3.1 above).
11.1 ACCELERATION. The principal amount of the Debentures (and not a
portion thereof) shall be payable upon declaration of acceleration of the
Maturity thereof pursuant to Section 502 of the Indenture.
12.1 SECTION 1301 OF INDENTURE. Section 1301 of the Indenture
shall apply to the Debentures.
13.1 OTHER PROVISIONS. The Debentures shall have no other terms
than as set forth in this Board Resolution and the Indenture or as may be set
forth in any indenture or indentures supplemental to the Indenture.
Capitalized terms used in this Board Resolution have the meanings
set forth in the Indenture unless otherwise indicated or the context indicates
otherwise.
<PAGE>
Exhibit 4.01 (j)
EXCERPT FROM THE MINUTES OF A MEETING OF THE BOARD OF DIRECTORS
OF EQUITABLE RESOURCES, INC.
HELD JANUARY 17-18, 1996
The Chairman asked the Board to authorize the filing of the
Registration Statement and to adopt resolutions authorizing all other action
required in connection therewith.
After full discussion, on motion duly made and seconded, the
following resolutions were unanimously adopted:
RESOLVED, That this Board hereby authorizes and approves a financing
program involving the issue and sale from time to time by the Company of up to
$250 million aggregate principal amount of debt securities to be issued under
the Indenture dated as of April 1, 1983 (the "Indenture"), as supplemented,
between the Company and Bankers Trust Company, as Trustee.
RESOLVED FURTHER, That the President and the Vice President and
Chief Financial Officer and other proper officers of the Company be, and hereby
they are, authorized, empowered and directed for and on behalf of the Company to
cause a Registration Statement on Form S-3 pertaining to the issuance and sale
of the debt securities, in such form as such officers may approve, their
approval to be evidenced conclusively by their execution of the same, to be
executed and filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended.
RESOLVED FURTHER, That the Vice President and Chief Financial
Officer of the Company, be, and hereby he is, designated to act on behalf of the
Company as its agent for service in respect of matters concerning such
Registration Statement, with the powers enumerated in Rule 478 of the Rules and
Regulations of the Securities and Exchange Commission under the Securities Act
of 1933, as amended.
RESOLVED FURTHER, That the proper officers of the Company be, and
hereby they are, authorized, empowered and directed for and on behalf of the
Company to prepare or cause to be prepared and executed under the corporate seal
of the Company if necessary or advisable, and to cause to be filed at any time
and from time to time, any and all amendments to said Registration Statement,
including post-effective amendments, and other documents to be filed with the
Securities and Exchange Commission as they may deem necessary or advisable, such
amendments and other documents to be in such form as the officers executing the
same may approve, their approval to be evidenced conclusively by such execution,
and to take any and all further action and to file such prospectus and any
supplements thereto and other documents with the Securities and Exchange
Commission as they may deem necessary or advisable, in order to make such filing
effective and to effectuate the issuance and sale from time to time of debt
securities; and the execution by such officers of any such paper or document or
the doing by any of them of any acts in connection with the foregoing matters
shall conclusively establish their authority therefor from the Company and the
approval and ratification by the Company of the papers and documents so executed
and the actions so taken.
RESOLVED FURTHER, That the proper officers of the Company be, and
hereby they are, authorized, empowered and directed to execute and file on
behalf of the Company a Securities Certificate with the Pennsylvania Public
Utility Commission and an Application for an Order Authorizing the Issuance and
Sale of Debt Securities with the Kentucky Public Service Commission, in each
case relating to the debt securities, and to execute and file with the
Pennsylvania Public Utility Commission and the Kentucky Public Service
Commission and all other regulatory authorities such amendments or additional
applications, agreements and other documents, or amendments to the same, and to
take any and all such further actions, as such officers may deem necessary or
advisable in order to make all filings with all such regulatory authorities
effective and to authorize the issuance and sale of the debt securities.
RESOLVED FURTHER, That the Finance Committee of the Board of
Directors shall be, and hereby it is, authorized and empowered, in the name,
place and stead of the Board of Directors of the Company, to authorize at any
time or times deemed appropriate one or more issues and sales of debt securities
by the Company and, in connection with any such issue, to determine, approve or
appoint, as the case may be (i) the titles of the debt securities; (ii) the
aggregate principal amount and denominations; (iii) the maturity or maturities;
(iv) the price to be received by the Company in any public or private offering
of the debt securities (which may be at a discount from the principal amount of
any such debt securities at their maturity); (v) the rate or rates at which the
debt securities will bear interest, if any, and the date from which such
interest will accrue; (vi) any mandatory or optional sinking fund or analogous
provisions; (vii) the date, if any, after which, and the price or prices at
which, any debt securities may be redeemed at the option of the Company; (viii)
if applicable, the terms and conditions upon which any debt securities may be
payable prior to final maturity at the option of the holder thereof or
otherwise; (ix) if applicable, the terms and conditions upon which the entire
indebtedness on any series of the debt securities may be discharged by the
deposit of cash and/or certain government obligations with the Trustee for the
holders of the debt securities; (x) the restrictive covenants, if any, to be
imposed upon the Company relating to any debt securities; (xi) any
authenticating or paying agents, transfer agents or registrars (collectively,
the "Fiduciaries"); (xii) the terms and conditions of the issuance and sale of
the debt securities, including the price at which any debt securities may be
sold by the Company and the plans for distribution of the debt securities, and
the compensation to be paid any underwriters or agents for sale in connection
with such distribution; (xiii) if applicable, the specific portions of the
Company's existing indebtedness to be refinanced from the proceeds of any sale
of the debt securities; and (xiv) such other terms, conditions and provisions as
the Finance Committee shall deem appropriate.
RESOLVED FURTHER, That the proper officers of the Company be, and
hereby they are, authorized and directed to take any and all actions which they
may deem necessary or advisable to effect the issuance of one or more series of
debt securities under the Indenture and otherwise carry out the terms and
provisions of the Indenture.
RESOLVED FURTHER, That the proper officers of the Company be, and
hereby each of them is, authorized, in the name and on behalf of the Company, to
execute and deliver such other agreements, documents, certificates and
instruments as may be required by any Fiduciary in connection with the Indenture
or as may be necessary or appropriate in connection with the issuance and sale
of the debt securities.
RESOLVED FURTHER, That any Fiduciary be, and hereby it is,
authorized to rely and act upon, and shall be fully protected in so relying and
acting upon, any instructions received by it and signed by any officer of the
Company or by counsel for the Company, and to rely and act upon, and shall be
fully protected in so relying and acting upon, any Debenture, assignment, power
of attorney, certificate, order, instruction, notice or other instrument or
paper believed by it to be genuine and duly authorized and properly executed;
that the Company may reimburse any such Fiduciary for all expenses incurred by
it in the performance of its duties; that the Company may indemnify and hold
harmless each Fiduciary from and against any and all claims, suits, damages,
losses, expenses (including reasonable counsel fees) and liabilities which may
be incurred by it or to which it may be subjected by reason of, or in connection
with, its appointment and duties excepting only such as shall result from its
own negligence or bad faith; and that the proper officers of the Company be, and
each of them hereby is, authorized, in the name and on behalf of the Company, to
execute and deliver a written order to the appropriate Fiduciary directing such
Fiduciary when debt securities have been properly executed by the Company to
authenticate them in such principal amount as shall have been determined by the
Finance Committee, to deliver such debt securities to, or upon the order of the
Company, and thereafter to authenticate and deliver such other debt securities
as may be necessary upon registration or transfer of, in exchange for, or in
lieu of, any outstanding debt securities, all in accordance with the terms of
the Indenture.
RESOLVED FURTHER, That the President and the Secretary of the
Company be, and hereby each of them is, authorized, empowered and directed to
execute, by manual or facsimile signature, the debt securities in the aggregate
principal amount to be determined as provided in the Indenture and in definitive
registered form, and to execute, by manual or facsimile signature, from time to
time such additional debt securities as may be necessary to effect transfers of
the debt securities and exchanges of the debt securities for debt securities of
other denominations, and the President or any Vice President or the Treasurer or
any Assistant Treasurer of the Company be, and hereby each of them is,
authorized, empowered and directed to deliver from time to time the debt
securities, executed in the manner and in the principal amount as aforesaid, to
the Trustee for authentication and delivery upon the written order of the
Company signed by such officer, all as provided in the Indenture and further
authorized by the Finance Committee.
RESOLVED FURTHER, That the proper officers of the Company shall be,
and hereby they are, authorized and empowered to select underwriters, purchasers
or agents for sale of the debt securities and to approve forms of underwriting
agreements, purchase agreements or agency agreements relating to the sale and
distribution of the debt securities and providing for the terms and conditions
of sales of series of debt securities, subject to the ratification of the
Finance Committee and the proper officers of the Company be, and hereby they
are, authorized, empowered and directed, on behalf of the Company and under its
corporate seal if necessary or advisable, to execute and deliver from time to
time one or more such agreements in such form as the Finance Committee or the
officers executing the same may approve, such approval to be evidenced
conclusively by the execution thereof.
RESOLVED FURTHER, That the proper officers of the Company be, and
hereby they are, authorized, in the name and on behalf of the Company and under
its corporate seal if necessary or advisable, to make application to such
securities exchange as the Finance Committee shall deem necessary or appropriate
for the listing thereon of debt securities and that each such officer is
authorized to appear before any official or officials or before any body of any
such exchange, and to execute and deliver any and all papers and agreements,
specifically including, without limitation, indemnity agreements for the benefit
of any such exchange relating to the use of facsimile signatures, and to do any
and all things which may be necessary to effect such listing and to do any and
all things which otherwise may be necessary to effect registration of the debt
securities under Section 12 of the Securities Exchange Act of 1934, as amended.
RESOLVED FURTHER, That the proper officers of the Company be, and
hereby they are, authorized, empowered and directed to make applications in such
states as they shall deem necessary or advisable to qualify or register (or
obtain an exemption from qualification or registration) for offer or sale of all
or such part of the debt securities, and to license the Company as a broker or
dealer and to take on behalf of the Company any and all actions, as they may
deem necessary or advisable in order to comply with the Blue Sky or securities
laws of any state of the United States of America and in connection therewith to
execute and file requisite papers and documents, including but not limited to
applications, reports, surety bonds, irrevocable consents and appointments of
attorneys for service of process, and to take any and all further action which
they may deem necessary or advisable in order to maintain any such registration
or qualification (or exemption) for so long as they deem necessary or as
required by law or by any underwriters of the debt securities, and the execution
by such officers of any such paper or document or the doing by them of any
action in connection with the foregoing matters shall conclusively establish
their authority from the Company for the papers and documents so executed and
the action so taken.
RESOLVED FURTHER, That if in any state in which action is taken to
qualify or register any debt securities or to license the Company as a broker or
dealer a prescribed form of resolution or resolutions relating to such
licensing, qualification or registration, or to any application, report, surety
bond, appointment or other instrument in connection therewith, is required, each
such resolution shall be deemed to have been, and hereby is, adopted by this
Board of Directors, and the Secretary or any Assistant Secretary of the Company
is hereby authorized, empowered and directed to certify the adoption of any such
resolution as though the same were presented at this meeting and adopted hereby,
all such resolutions to be inserted in the minute book of the Company as part of
the minutes of the Company.
RESOLVED FURTHER, That the proper officers of the Company be, and
hereby they are, authorized, empowered and directed to take any and all such
further action for and on behalf of the Company and to execute, for and on
behalf of the Company and under its corporate seal if necessary or advisable,
and to deliver any and all agreements, certificates, applications or other
instruments as the Finance Committee or such officers may deem necessary or
advisable in order to effect and confirm the authorization, issuance and sale of
the debt securities and to implement the foregoing resolutions and the
transactions contemplated thereby.
RESOLVED FURTHER, That whenever used in the foregoing resolutions,
the term "proper officers" shall mean the President or any Vice President of the
Company.
<PAGE>
Exhibit 4.01 (j)
EXCERPT FROM THE MINUTES OF A MEETING OF THE BOARD OF DIRECTORS
OF EQUITABLE RESOURCES, INC.
HELD JULY 18, 1996
WHEREAS, on January 18, 1996, the Board of Directors of this Company
adopted resolutions authorizing and approving a financing program involving the
issue and sale from time to time by the Company of up to $250 million aggregate
principal amount of debt securities to be issued under the Indenture dated as of
April 1, 1983, as supplemented, between the Company and Bankers Trust Company,
as Trustee; and
WHEREAS, it has since been determined that the Company will not
issue the securities under the 1983 Indenture but will enter into a new
Indenture with the Bank of Montreal Trust Company as Trustee.
NOW, THEREFORE, BE IT RESOLVED, That the resolution adopted by the
Board of Directors on January 18, 1996, relating specifically to the issuance of
debt securities under the Indenture dated April 1, 1983 between the Company and
Bankers Trust Company, as Trustee, be amended to read as follows:
RESOLVED, That this Board hereby authorizes and approves a financing
program involving the issue and sale from time to time by the Company of up to
$250 million aggregate principal amount of debt securities to be issued under an
Indenture between the Company and the Bank of Montreal Trust Company, as
Trustee, and hereby authorizes the proper officers of the Company to execute and
deliver, on behalf of the Company, such Indenture between the Company and the
Bank of Montreal Trust Company.
RESOLVED FURTHER, That all other resolutions adopted by the Board of
Directors on January 18, 1996, pertaining to the $250 million debt financing
shall remain in full force and effect.
Exhibit 10.04 (a)
EQUITABLE RESOURCES, INC.
Board of Directors
Deferred Compensation Agreement
THIS AGREEMENT, made and executed this 29th day of May, 1996, by and
between Equitable Resources, Inc., herein designated as "Equitable", and Paul
Christiano, herein designated as the "Participant."
WITNESSETH:
WHEREAS, the Participant is currently a member of the Board of
Directors of Equitable as a Director or an Advisory Director; and
WHEREAS, Equitable and the Participant desire to defer all of the fees
arising from the above-stated relationship.
NOW, THEREFORE, the parties hereby agree as follows:
Section 1 - Account
1.1) Effective May 29, 1996, the Participant herein elects to defer, under
the terms of this Agreement, all compensation earned for his/her service as a
Director or an Advisory Director of Equitable for the calendar year 1996.
1.2) Equitable shall establish a bookkeeping account, hereinafter referred
to as the "Account", and shall credit to the Account the amounts of the deferred
fees.
1.3) Interest shall be credited to the Account monthly. The rate of
interest shall be the same as the yield for 30-day Treasury Bills applicable to
the first day of such month.
Section 2 - Payment
2.1) All amounts credited to the Account on the Participant's behalf shall
be payable in one lump sum by Equitable to the Participant on _________________
(date selected by the Participant) but in no event later than sixty (60) days
after the Participant ceases to be a Director or an Advisory Director of
Equitable. Unless a date specific is selected by the Participant, the
distribution will be made within sixty (60) days after the Participant ceases to
be a Director or an Advisory Director of Equitable; provided, however, that
nothing contained in this Section 2.1 shall negate the provisions of Section 2.3
below.
2.2) In the event of the death of the Participant, such payment shall be
made to the Participant's beneficiary. For purposes of the Agreement,
"beneficiary" means any person(s) or trust(s) or combination of these, last
designated by the Participant to receive benefits provided under this Agreement.
Such designation shall be in writing filed with the Compensation Committee of
the Board of Directors (the "Committee") and shall be revocable at any time
through written instrument similarly filed without consent of any beneficiary.
In the absence of any designation, the beneficiary shall be the Participant's
spouse, if surviving, otherwise, all amounts payable hereunder shall be
delivered by Equitable to the executors and administrators of the Participant's
estate for administration as a part thereof.
2.3) For financial reasons, the Participant may apply to the Committee for
withdrawal from the Agreement prior to the Payment Date. Such early withdrawal
shall lie within the absolute discretion of the Committee. Upon approval from
the Committee, and within fifteen (15) days thereafter, the Participant will be
deemed to have withdrawn from the Agreement and a distribution, in the amount
necessary, will be made in a one-time payment. Amounts still payable to the
Participant after the application of this Paragraph 2.3 shall be distributed
pursuant to the foregoing Paragraphs of this Section 2.
Section 3 - Miscellaneous Provisions
3.1) Nothing contained in this Agreement and no action taken pursuant to
the provisions of this Agreement shall create or be construed to create a trust
of any kind, or a fiduciary relationship between Equitable and the Participant,
his/her designated beneficiary or any other person. Any fees deferred under the
provisions of this Agreement shall continue for all purposes to be a part of the
general funds of Equitable. To the extent that any person acquires a right to
receive payment from Equitable under this Agreement, such right shall be no
greater than the right of any unsecured general creditor of Equitable.
3.2) The right of the Participant or any other person to the payment of
deferred fees under this Agreement shall not be assigned, transferred, pledged
or encumbered except by will or by the laws of descent and distribution.
3.3) If the Committee shall find that any person to whom any payment is
payable under this Agreement is unable to care for his/her affairs because of
illness or accident, or is a minor, any payment due (unless a prior claim
therefor shall have been made by a duly appointed guardian, committee or other
legal representative) may be paid to the spouse, child, a parent, or a brother
or sister, or to any person deemed by the Committee to have incurred expense for
such person otherwise entitled to payment, in such manner and proportions as the
Committee may determine. Any such payment shall be a complete discharge of the
liabilities of Equitable under this Agreement.
3.4) Nothing contained herein shall be construed as conferring upon the
Participant the right to continue in the service of Equitable as a member of the
Board of Directors.
3.5) This Agreement shall be binding upon and inure to the benefit of
Equitable, its successors and assigns and the Participant and his/her heirs,
executors, administrators and legal representatives.
3.6) Equitable may terminate this Plan at any time. Upon such termination,
the Committee shall dispose of any benefits of the Participant as provided in
Section 2.
Equitable may also amend the provisions of this Plan at any time;
provided, however, that no amendment shall affect the rights of the Participant,
or his/her beneficiaries, to the receipt of payment of benefits to the extent of
any compensation deferred before the time of the amendment.
This Agreement shall terminate when the payment due under this Agreement
is made.
3.7) This Agreement shall be construed in accordance with and governed by
the laws of the Commonwealth of Pennsylvania.
Section 4 - Committee
4.1) The Committee's interpretation and construction of the Agreement, and
the actions thereunder, including the amount or recipient of the payment to be
made therefrom, shall be binding and conclusive on all persons for all purposes.
The Committee members shall not be liable to any person for any action taken or
omitted in connection with the interpretation and administration of this
Agreement unless attributable to his/her own willful misconduct or lack of good
faith.
IN WITNESS WHEREOF, Equitable has caused this Agreement to be executed by
its duly authorized officers and the Participant has hereunto set his/her hand
as of the date first above written.
ATTEST: EQUITABLE RESOURCES, INC.
s/ Audrey C. Moeller s/ Frederick H. Abrew
- - -------------------------- -----------------------------
Vice President and President and
Corporate Secretary Chief Executive Officer
WITNESS: (Participant)
- - -------------------------- ------------------------------
s/ Norene Christiano s/ Paul Christiano
Exhibit 10.04 (b)
EQUITABLE RESOURCES, INC.
Board of Directors
Deferred Compensation Agreement
THIS AGREEMENT, made and executed this 26th day of November, 1996, by and
between Equitable Resources, Inc., herein designated as "Equitable", and Paul
Christiano, herein designated as the "Participant."
WITNESSETH:
WHEREAS, the Participant is currently a member of the Board of
Directors of Equitable as a Director or an Advisory Director; and
WHEREAS, Equitable and the Participant desire to defer all of the fees
arising from the above-stated relationship.
NOW, THEREFORE, the parties hereby agree as follows:
Section 1 - Account
1.1) Effective January 1, 1997, the Participant herein elects to defer,
under the terms of this Agreement, all compensation earned for his/her service
as a Director or an Advisory Director of Equitable for the calendar year 1997.
1.2) Equitable shall establish a bookkeeping account, hereinafter referred
to as the "Account", and shall credit to the Account the amounts of the deferred
fees.
1.3) Interest shall be credited to the Account monthly. The rate of
interest shall be the same as the yield for 30-day Treasury Bills applicable to
the first day of such month.
Section 2 - Payment
2.1) All amounts credited to the Account on the Participant's behalf shall
be payable in one lump sum by Equitable to the Participant on _________________
(date selected by the Participant) but in no event later than sixty (60) days
after the Participant ceases to be a Director or an Advisory Director of
Equitable. Unless a date specific is selected by the Participant, the
distribution will be made within sixty (60) days after the Participant ceases to
be a Director or an Advisory Director of Equitable; provided, however, that
nothing contained in this Section 2.1 shall negate the provisions of Section 2.3
below.
2.2) In the event of the death of the Participant, such payment shall be
made to the Participant's beneficiary. For purposes of the Agreement,
"beneficiary" means any person(s) or trust(s) or combination of these, last
designated by the Participant to receive benefits provided under this Agreement.
Such designation shall be in writing filed with the Compensation Committee of
the Board of Directors (the "Committee") and shall be revocable at any time
through written instrument similarly filed without consent of any beneficiary.
In the absence of any designation, the beneficiary shall be the Participant's
spouse, if surviving, otherwise, all amounts payable hereunder shall be
delivered by Equitable to the executors and administrators of the Participant's
estate for administration as a part thereof.
2.3) For financial reasons, the Participant may apply to the Committee for
withdrawal from the Agreement prior to the Payment Date. Such early withdrawal
shall lie within the absolute discretion of the Committee. Upon approval from
the Committee, and within fifteen (15) days thereafter, the Participant will be
deemed to have withdrawn from the Agreement and a distribution, in the amount
necessary, will be made in a one-time payment. Amounts still payable to the
Participant after the application of this Paragraph 2.3 shall be distributed
pursuant to the foregoing Paragraphs of this Section 2.
Section 3 - Miscellaneous Provisions
3.1) Nothing contained in this Agreement and no action taken pursuant to
the provisions of this Agreement shall create or be construed to create a trust
of any kind, or a fiduciary relationship between Equitable and the Participant,
his/her designated beneficiary or any other person. Any fees deferred under the
provisions of this Agreement shall continue for all purposes to be a part of the
general funds of Equitable. To the extent that any person acquires a right to
receive payment from Equitable under this Agreement, such right shall be no
greater than the right of any unsecured general creditor of Equitable.
3.2) The right of the Participant or any other person to the payment of
deferred fees under this Agreement shall not be assigned, transferred, pledged
or encumbered except by will or by the laws of descent and distribution.
3.3) If the Committee shall find that any person to whom any payment is
payable under this Agreement is unable to care for his/her affairs because of
illness or accident, or is a minor, any payment due (unless a prior claim
therefor shall have been made by a duly appointed guardian, committee or other
legal representative) may be paid to the spouse, child, a parent, or a brother
or sister, or to any person deemed by the Committee to have incurred expense for
such person otherwise entitled to payment, in such manner and proportions as the
Committee may determine. Any such payment shall be a complete discharge of the
liabilities of Equitable under this Agreement.
3.4) Nothing contained herein shall be construed as conferring upon the
Participant the right to continue in the service of Equitable as a member of the
Board of Directors.
3.5) This Agreement shall be binding upon and inure to the benefit of
Equitable, its successors and assigns and the Participant and his/her heirs,
executors, administrators and legal representatives.
3.6) Equitable may terminate this Plan at any time. Upon such termination,
the Committee shall dispose of any benefits of the Participant as provided in
Section 2.
Equitable may also amend the provisions of this Plan at any time;
provided, however, that no amendment shall affect the rights of the Participant,
or his/her beneficiaries, to the receipt of payment of benefits to the extent of
any compensation deferred before the time of the amendment.
This Agreement shall terminate when the payment due under this Agreement
is made.
3.7) This Agreement shall be construed in accordance with and governed by
the laws of the Commonwealth of Pennsylvania.
Section 4 - Committee
4.1) The Committee's interpretation and construction of the Agreement, and
the actions thereunder, including the amount or recipient of the payment to be
made therefrom, shall be binding and conclusive on all persons for all purposes.
The Committee members shall not be liable to any person for any action taken or
omitted in connection with the interpretation and administration of this
Agreement unless attributable to his/her own willful misconduct or lack of good
faith.
IN WITNESS WHEREOF, Equitable has caused this Agreement to be executed by
its duly authorized officers and the Participant has hereunto set his/her hand
as of the date first above written.
ATTEST: EQUITABLE RESOURCES, INC.
s/ Audrey C. Moeller s/ Frederick H. Abrew
- - -------------------------- ------------------------------
Vice President and President and
Corporate Secretary Chief Executive Officer
WITNESS: (Participant)
- - -------------------------- ------------------------------
s/ Edna L. Jackson s/ Paul Christiano
Exhibit 10.09
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
Short-Term Incentive Compensation Plan
(Effective March 1997)
1. For each plan calendar year, the Compensation Committee (Committee)
shall approve:
Participants eligible for awards.
Target awards for each participant.
A net income threshold which must be met before the plan is funded.
An estimate of the incentive fund required based on the aggregate
estimated target awards for the participants for that year.
2. Each participant's target award shall be allocated to various corporate, unit
and personal performance measures. Objectives and/or goals shall be
established for each performance measure consistent with Equitable Resources'
business plan.
3. Following the close of the plan year, each participant's targeted award will
be adjusted to reflect corporate, unit and individual performance against
their pre-established goals and objectives. Targeted awards can be enhanced
by up to 50% based on performance. The targeted award becomes a recommended
award after this performance evaluation process.
The Chief Executive Officer shall review the recommended awards to ensure
that each participant's performance is objectively and consistently
evaluated.
4. Following the completion of the Company's consolidated financial statements
for the calendar year, the incentive fund shall be determined based upon the
Company's net income financial performance. This net income number will be
multiplied by a pre-determined range of percentages to determine the amount
of funding for the pool. These funding percentages range from 1.7% to 4.5% of
net income. In no event will the incentive fund exceed 4.5% of net income.
Should the Company's financial performance level be less than the net income
threshold as determined by the Committee, there shall be no incentive fund
for that plan calendar year and no incentive awards shall be authorized,
unless the Committee at its sole discretion determines otherwise.
Should the Company's financial performance be equal to or higher than the
threshold for plan awards, net income will be multiplied by the appropriate
net income funding percentage to fund the Plan.
Should the sum of the recommended awards be less than or greater than the
total recommended awards, each participant will receive a percentage of the
incentive fund based on their overall percentage share of the recommended
award total. In no case will an employee receive more than 100% of their
salary in incentive compensation.
The Committee shall authorize the actual incentive award for each
participant including any adjustments it may make thereto.
5. The actual incentive award shall be paid to each participant at such time and
in such periodic amount as the Committee shall, from time to time, determine,
provided however, that in no event shall the payments extend beyond three (3)
months from the date the Committee authorizes the actual incentive awards.
6. The actual incentive award, once authorized, by the Committee, may be
subsequently revoked should the participant's employment with the Company
terminate; provided however, that upon normal retirement or death, all
authorized actual incentive awards become due and payable and provided
further, that revocation shall not be applicable where the participant's
termination of employment is caused directly or indirectly by a change in
control of the Company. (Change in control of the Company is defined as the
acquisition of 10% or more of the Company's outstanding voting shares and/or
a change in the majority of the Board of Directors as a result of a cash
tender offer or exchange offer, merger or other business combination, sale of
assets or contested election, or any combination of these transactions
without the prior consent of the Board of Directors.)
7. The Company's Short-Term Incentive Compensation Plan may be canceled at the
discretion of the Board of Directors, but such cancellation shall not affect
actual incentive awards previously authorized.
Exhibit 10.14 (a)
EQUITABLE RESOURCES, INC.
Board of Directors
Deferred Compensation Agreement
THIS AGREEMENT, made and executed this 24th day of May, 1996, by and
between Equitable Resources, Inc., herein designated as "Equitable", and Phyllis
A. Savill, herein designated as the "Participant."
WITNESSETH:
WHEREAS, the Participant is currently a member of the Board of
Directors of Equitable as a Director or an Advisory Director; and
WHEREAS, Equitable and the Participant desire to defer all of the fees
arising from the above-stated relationship.
NOW, THEREFORE, the parties hereby agree as follows:
Section 1 - Account
1.1) Effective May 24, 1996, the Participant herein elects to defer, under
the terms of this Agreement, all compensation earned for his/her service as a
Director or an Advisory Director of Equitable for the calendar year 1996.
1.2) Equitable shall establish a bookkeeping account, hereinafter referred
to as the "Account", and shall credit to the Account the amounts of the deferred
fees.
1.3) Interest shall be credited to the Account monthly. The rate of
interest shall be the same as the yield for 30-day Treasury Bills applicable to
the first day of such month.
Section 2 - Payment
2.1) All amounts credited to the Account on the Participant's behalf shall
be payable in one lump sum by Equitable to the Participant on _________________
(date selected by the Participant) but in no event later than sixty (60) days
after the Participant ceases to be a Director or an Advisory Director of
Equitable. Unless a date specific is selected by the Participant, the
distribution will be made within sixty (60) days after the Participant ceases to
be a Director or an Advisory Director of Equitable; provided, however, that
nothing contained in this Section 2.1 shall negate the provisions of Section 2.3
below.
2.2) In the event of the death of the Participant, such payment shall be
made to the Participant's beneficiary. For purposes of the Agreement,
"beneficiary" means any person(s) or trust(s) or combination of these, last
designated by the Participant to receive benefits provided under this Agreement.
Such designation shall be in writing filed with the Compensation Committee of
the Board of Directors (the "Committee") and shall be revocable at any time
through written instrument similarly filed without consent of any beneficiary.
In the absence of any designation, the beneficiary shall be the Participant's
spouse, if surviving, otherwise, all amounts payable hereunder shall be
delivered by Equitable to the executors and administrators of the Participant's
estate for administration as a part thereof.
2.3) For financial reasons, the Participant may apply to the Committee for
withdrawal from the Agreement prior to the Payment Date. Such early withdrawal
shall lie within the absolute discretion of the Committee. Upon approval from
the Committee, and within fifteen (15) days thereafter, the Participant will be
deemed to have withdrawn from the Agreement and a distribution, in the amount
necessary, will be made in a one-time payment. Amounts still payable to the
Participant after the application of this Paragraph 2.3 shall be distributed
pursuant to the foregoing Paragraphs of this Section 2.
Section 3 - Miscellaneous Provisions
3.1) Nothing contained in this Agreement and no action taken pursuant to
the provisions of this Agreement shall create or be construed to create a trust
of any kind, or a fiduciary relationship between Equitable and the Participant,
his/her designated beneficiary or any other person. Any fees deferred under the
provisions of this Agreement shall continue for all purposes to be a part of the
general funds of Equitable. To the extent that any person acquires a right to
receive payment from Equitable under this Agreement, such right shall be no
greater than the right of any unsecured general creditor of Equitable.
3.2) The right of the Participant or any other person to the payment of
deferred fees under this Agreement shall not be assigned, transferred, pledged
or encumbered except by will or by the laws of descent and distribution.
3.3) If the Committee shall find that any person to whom any payment is
payable under this Agreement is unable to care for his/her affairs because of
illness or accident, or is a minor, any payment due (unless a prior claim
therefor shall have been made by a duly appointed guardian, committee or other
legal representative) may be paid to the spouse, child, a parent, or a brother
or sister, or to any person deemed by the Committee to have incurred expense for
such person otherwise entitled to payment, in such manner and proportions as the
Committee may determine. Any such payment shall be a complete discharge of the
liabilities of Equitable under this Agreement.
3.4) Nothing contained herein shall be construed as conferring upon the
Participant the right to continue in the service of Equitable as a member of the
Board of Directors.
3.5) This Agreement shall be binding upon and inure to the benefit of
Equitable, its successors and assigns and the Participant and his/her heirs,
executors, administrators and legal representatives.
3.6) Equitable may terminate this Plan at any time. Upon such termination,
the Committee shall dispose of any benefits of the Participant as provided in
Section 2.
Equitable may also amend the provisions of this Plan at any time;
provided, however, that no amendment shall affect the rights of the Participant,
or his/her beneficiaries, to the receipt of payment of benefits to the extent of
any compensation deferred before the time of the amendment.
This Agreement shall terminate when the payment due under this Agreement
is made.
3.7) This Agreement shall be construed in accordance with and governed by
the laws of the Commonwealth of Pennsylvania.
Section 4 - Committee
4.1) The Committee's interpretation and construction of the Agreement, and
the actions thereunder, including the amount or recipient of the payment to be
made therefrom, shall be binding and conclusive on all persons for all purposes.
The Committee members shall not be liable to any person for any action taken or
omitted in connection with the interpretation and administration of this
Agreement unless attributable to his/her own willful misconduct or lack of good
faith.
IN WITNESS WHEREOF, Equitable has caused this Agreement to be executed by
its duly authorized officers and the Participant has hereunto set his/her hand
as of the date first above written.
PARTICIPANT: EQUITABLE RESOURCES, INC.
s/ Phyllis A. Savill s/ Frederick H. Abrew
- - ----------------------- ----------------------------------------
President and Chief Executive Officer
WITNESS: ATTEST:
s/ Barry Savill s/ Audrey C. Moeller
- - ----------------------- ----------------------------------------
Vice President and Corporate
Secretary
Exhibit 10.14 (b)
EQUITABLE RESOURCES, INC.
Board of Directors
Deferred Compensation Agreement
THIS AGREEMENT, made and executed this 27th day of November, 1996, by and
between Equitable Resources, Inc., herein designated as "Equitable", and Phyllis
A. Savill, herein designated as the "Participant."
WITNESSETH:
WHEREAS, the Participant is currently a member of the Board of
Directors of Equitable as a Director or an Advisory Director; and
WHEREAS, Equitable and the Participant desire to defer all of the fees
arising from the above-stated relationship.
NOW, THEREFORE, the parties hereby agree as follows:
Section 1 - Account
1.1) Effective January 1, 1997, the Participant herein elects to defer,
under the terms of this Agreement, all compensation earned for his/her service
as a Director or an Advisory Director of Equitable for the calendar year 1997.
1.2) Equitable shall establish a bookkeeping account, hereinafter referred
to as the "Account", and shall credit to the Account the amounts of the deferred
fees.
1.3) Interest shall be credited to the Account monthly. The rate of
interest shall be the same as the yield for 30-day Treasury Bills applicable to
the first day of such month.
Section 2 - Payment
2.1) All amounts credited to the Account on the Participant's behalf shall
be payable in one lump sum by Equitable to the Participant on _________________
(date selected by the Participant) but in no event later than sixty (60) days
after the Participant ceases to be a Director or an Advisory Director of
Equitable. Unless a date specific is selected by the Participant, the
distribution will be made within sixty (60) days after the Participant ceases to
be a Director or an Advisory Director of Equitable; provided, however, that
nothing contained in this Section 2.1 shall negate the provisions of Section 2.3
below.
2.2) In the event of the death of the Participant, such payment shall be
made to the Participant's beneficiary. For purposes of the Agreement,
"beneficiary" means any person(s) or trust(s) or combination of these, last
designated by the Participant to receive benefits provided under this Agreement.
Such designation shall be in writing filed with the Compensation Committee of
the Board of Directors (the "Committee") and shall be revocable at any time
through written instrument similarly filed without consent of any beneficiary.
In the absence of any designation, the beneficiary shall be the Participant's
spouse, if surviving, otherwise, all amounts payable hereunder shall be
delivered by Equitable to the executors and administrators of the Participant's
estate for administration as a part thereof.
2.3) For financial reasons, the Participant may apply to the Committee for
withdrawal from the Agreement prior to the Payment Date. Such early withdrawal
shall lie within the absolute discretion of the Committee. Upon approval from
the Committee, and within fifteen (15) days thereafter, the Participant will be
deemed to have withdrawn from the Agreement and a distribution, in the amount
necessary, will be made in a one-time payment. Amounts still payable to the
Participant after the application of this Paragraph 2.3 shall be distributed
pursuant to the foregoing Paragraphs of this Section 2.
Section 3 - Miscellaneous Provisions
3.1) Nothing contained in this Agreement and no action taken pursuant to
the provisions of this Agreement shall create or be construed to create a trust
of any kind, or a fiduciary relationship between Equitable and the Participant,
his/her designated beneficiary or any other person. Any fees deferred under the
provisions of this Agreement shall continue for all purposes to be a part of the
general funds of Equitable. To the extent that any person acquires a right to
receive payment from Equitable under this Agreement, such right shall be no
greater than the right of any unsecured general creditor of Equitable.
3.2) The right of the Participant or any other person to the payment of
deferred fees under this Agreement shall not be assigned, transferred, pledged
or encumbered except by will or by the laws of descent and distribution.
3.3) If the Committee shall find that any person to whom any payment is
payable under this Agreement is unable to care for his/her affairs because of
illness or accident, or is a minor, any payment due (unless a prior claim
therefor shall have been made by a duly appointed guardian, committee or other
legal representative) may be paid to the spouse, child, a parent, or a brother
or sister, or to any person deemed by the Committee to have incurred expense for
such person otherwise entitled to payment, in such manner and proportions as the
Committee may determine. Any such payment shall be a complete discharge of the
liabilities of Equitable under this Agreement.
3.4) Nothing contained herein shall be construed as conferring upon the
Participant the right to continue in the service of Equitable as a member of the
Board of Directors.
3.5) This Agreement shall be binding upon and inure to the benefit of
Equitable, its successors and assigns and the Participant and his/her heirs,
executors, administrators and legal representatives.
3.6) Equitable may terminate this Plan at any time. Upon such termination,
the Committee shall dispose of any benefits of the Participant as provided in
Section 2.
Equitable may also amend the provisions of this Plan at any time;
provided, however, that no amendment shall affect the rights of the Participant,
or his/her beneficiaries, to the receipt of payment of benefits to the extent of
any compensation deferred before the time of the amendment.
This Agreement shall terminate when the payment due under this Agreement
is made.
3.7) This Agreement shall be construed in accordance with and governed by
the laws of the Commonwealth of Pennsylvania.
Section 4 - Committee
4.1) The Committee's interpretation and construction of the Agreement, and
the actions thereunder, including the amount or recipient of the payment to be
made therefrom, shall be binding and conclusive on all persons for all purposes.
The Committee members shall not be liable to any person for any action taken or
omitted in connection with the interpretation and administration of this
Agreement unless attributable to his/her own willful misconduct or lack of good
faith.
IN WITNESS WHEREOF, Equitable has caused this Agreement to be executed by
its duly authorized officers and the Participant has hereunto set his/her hand
as of the date first above written.
ATTEST: EQUITABLE RESOURCES, INC.
s/ Audrey C. Moeller s/ Frederick H. Abrew
- - -------------------------- --------------------------------
Vice President and President and
Corporate Secretary Chief Executive Officer
WITNESS: (Participant)
- - -------------------------- --------------------------------
s/ Lola Arbuzow s/ Phyllis A. Savill
<TABLE>
<CAPTION>
Exhibit 11.01
EQUITABLE RESOURCES, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
1996 1995 1994
---------------------------------------
<S> <C> <C> <C>
EARNINGS:
Net income............................................... $ 59,379 $ 1,548 $60,729
Interest net of applicable income taxes on
9 1/2% convertible subordinated debentures ........... 35 52 146
---------- --------- ---------
Adjusted earnings................................... $ 59,414 $ 1,600 $60,875
========== ========= =======
SHARES:
Average common shares outstanding ....................... 35,188 34,793 34,509
Dilutive effect of conversion of 9 1/2%
convertible subordinated debentures................... 55 84 220
Dilutive effect of stock options outstanding............. - 11 11
---------- --------- ---------
Total .............................................. 35,243 34,888 34,740
========== ========= =========
PRIMARY EARNINGS PER SHARE.................................. $1.69 $.04 $1.76
===== ==== =====
FULLY DILUTED EARNINGS PER SHARE............................ $1.69 $.04 $1.75
===== ==== =====
</TABLE>
Exhibit 21
EQUITABLE RESOURCES, INC.
SUBSIDIARY COMPANIES
Andex Energy, Inc.
EQT Capital Corporation
Equitable Pipeline Company
Equitable Power Services Company
Equitable Resources (Argentina) Company
Equitable Resources (Canada) Limited
Equitable Resources Energy Company
Equitable Storage Company, L.L.C.
Equitrans, L.P.
EREC Nevada, Inc.
ERI Global Partners, Inc.
ERI Holdings
ERI Incorporated
ERI Investments, Inc.
ERI Services, Inc.
ERI Services (St. Lucia) Limited
ERI Trading Company
ET Avoca Company
ET Blue Grass Company
420 Energy Investments, Inc.
Hershey Oil Corporation
IEC Hunterdon, Inc.
IEC Management Services, Inc.
IEC Montclair, Inc.
IEC Plymouth, Inc.
Independent Energy Corporation
Independent Energy Finance Corporation
Independent Energy Operations, Inc.
Kentucky West Virginia Gas Company, L.L.C.
LIG Chemical Company
LIG, Inc.
LIG Liquids Company L.L.C.
Louisiana Intrastate Gas Company L.L.C.
Nora Transmission Company
Scallop Thermal Management, Inc.
Three Rivers Pipeline Corporation
Tuscaloosa Pipeline Company
Exhibit 23.01
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference of our report dated February 19,
1997, with respect to the consolidated financial statements and schedule of
Equitable Resources, Inc. included in this Annual Report (Form 10-K) for the
year ended December 31, 1996 in the Prospectus part of the following
Registration Statements:
Registration Statement No. 33-52151 on Form S-8 pertaining to the
1994 Equitable Resources, Inc. Long-Term Incentive Plan;
Registration Statement No. 33-52137 on Form S-8 pertaining to the
1994 Equitable Resources, Inc. Non-Employee Directors' Stock
Incentive Plan;
Post-Effective Amendment No. 2 to Registration Statement No.
2-69010 on Form S-8 pertaining to the Equitable Resources, Inc.
Key Employee Restricted Stock Option and Stock Appreciation
Rights Incentive Compensation Plan;
Post-Effective Amendment No. 1 to Registration Statement No.
33-00252 on Form S-8 pertaining to the Equitable Resources, Inc.
Employee Savings Plan;
Post-Effective Amendment No. 1 to Registration Statement No.
33-10508 on Form S-8 pertaining to the Equitable Resources, Inc.
Key Employee Restricted Stock Option and Stock Appreciation
Rights Incentive Compensation Plan;
Registration Statement No. 33-53703 on Form S-3 pertaining to the
registration of $100,000,000 Medium Term Notes, Series C of
Equitable Resources, Inc.;
Registration Statement No. 33-62025 on Form S-3 pertaining to the
registration of 71,110 shares of Equitable Resources, Inc. common
stock;
Registration Statement No. 33-62027 on Form S-3 pertaining to the
registration of 161,454 shares of Equitable Resources, Inc.
common stock;
Registration Statement No. 333-01879 on Form S-8 pertaining to
the Equitable Resources, Inc. Employee Stock Purchase Plan;
Registration Statement No. 333-03149 on Form S-3 pertaining to
the registration of 239,316 shares of Equitable Resources, inc.
common stock;
Registration Statement No. 333-06839 on Form S-3 pertaining to
the registration of $168,000,000 of debt securities of Equitable
Resources, Inc.;
Registration Statement No. 333-22529 on Form S-8 pertaining to
the Equitable Resources, Inc. Employee Savings and Protection Plan.
By /s/ Ernst & Young LLP
Ernst & Young LLP
Pittsburgh, Pennsylvania
March 24, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 14,737
<SECURITIES> 0
<RECEIVABLES> 319,332
<ALLOWANCES> 10,714
<INVENTORY> 38,009
<CURRENT-ASSETS> 485,761
<PP&E> 2,210,991
<DEPRECIATION> 731,306
<TOTAL-ASSETS> 1,979,712
<CURRENT-LIABILITIES> 520,414
<BONDS> 422,112
0
0
<COMMON> 223,637
<OTHER-SE> 518,646
<TOTAL-LIABILITY-AND-EQUITY> 2,096,299
<SALES> 1,861,799
<TOTAL-REVENUES> 1,861,799
<CGS> 0
<TOTAL-COSTS> 1,733,011
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 17,707
<INTEREST-EXPENSE> 41,825
<INCOME-PRETAX> 89,961
<INCOME-TAX> 30,582
<INCOME-CONTINUING> 59,379
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 59,379
<EPS-PRIMARY> 1.69
<EPS-DILUTED> 1.69
</TABLE>
