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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number 1-7320
ANR PIPELINE COMPANY
(Exact name of registrant as specified in its charter)
Delaware 38-1281775
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
500 Renaissance Center
Detroit, Michigan 48243-1902
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (313) 496-0200
--------------------
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, and (2) has been
subject to such filing requirements for the past 90 days. Yes __X__ No_____
As of July 31, 1995, there were outstanding 1,000 shares of common
stock of the Registrant, $100 par value per share, its only class of common
stock. None of the voting stock of the Registrant is held by nonaffiliates.
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PART I
FINANCIAL INFORMATION
Item 1. Financial Statements.
The financial statements of ANR Pipeline Company and its subsidiaries
(the "Company" or "ANR Pipeline") are presented herein and are unaudited,
except for balances as of December 31, 1994, and therefore are subject to
year-end adjustments; however, all adjustments which are, in the opinion of
management, necessary for a fair statement of the results of operations for
the periods covered have been made. The adjustments which have been made are
of a normal recurring nature. Such results are not necessarily indicative of
results to be expected for the year due to seasonal variations and market
conditions affecting natural gas deliveries.
ANR PIPELINE COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Millions of Dollars)
<TABLE>
<CAPTION>
June 30, December 31,
ASSETS 1995 1994
--------------- --------------
(Unaudited)
<S> <C> <C>
Property, Plant and Equipment, at cost . . . . . . . . . . . . . . . . $ 3,431.2 $ 3,421.3
Less - Accumulated depreciation . . . . . . . . . . . . . . . . . . 2,251.0 2,226.1
---------- ----------
1,180.2 1,195.2
---------- ----------
Current Assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . 22.7 22.0
Note receivable from related party . . . . . . . . . . . . . . . . . 349.3 235.2
Accounts receivable:
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52.7 65.4
Related parties . . . . . . . . . . . . . . . . . . . . . . . . . 19.4 23.5
Materials and supplies, at average cost . . . . . . . . . . . . . . 41.2 41.1
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.7 .8
---------- ----------
486.0 388.0
---------- ----------
Other Assets:
Assets related to excess gas supply . . . . . . . . . . . . . . . . 75.9 90.8
Investment in pipeline partnerships . . . . . . . . . . . . . . . . 44.0 41.2
Deferred charges and other . . . . . . . . . . . . . . . . . . . . . 96.2 143.4
---------- ----------
216.1 275.4
---------- ----------
$ 1,882.3 $ 1,858.6
---------- ----------
---------- ----------
</TABLE>
See Notes to Consolidated Financial Statements.
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ANR PIPELINE COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Millions of Dollars)
<TABLE>
2<CAPTION>
June 30, December 31,
STOCKHOLDER'S EQUITY AND LIABILITIES 1995 1994
-------------- --------------
(Unaudited)
<S> <C> <C>
Common Stock and Other Stockholder's Equity:
Common stock, $100 par value, authorized, issued and outstanding
1,000 shares . . . . . . . . . . . . . . . . . . . . . . . . . . $ .1 $ .1
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . 466.2 466.2
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . 373.1 322.2
---------- ----------
839.4 788.5
---------- ----------
Long-Term Debt and Capital Lease Obligations . . . . . . . . . . . . . 510.3 437.0
---------- ----------
Current Liabilities:
Maturities and sinking fund requirements of long-term
debt and capital lease obligations . . . . . . . . . . . . . . . 61.1 61.1
Accounts payable:
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111.2 168.8
Related parties . . . . . . . . . . . . . . . . . . . . . . . . . 6.2 7.4
Taxes on income . . . . . . . . . . . . . . . . . . . . . . . . . . (2.4) 2.5
Other taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.1 23.9
Provision for regulatory matters . . . . . . . . . . . . . . . . . . 53.8 38.1
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30.6 28.6
---------- ----------
278.6 330.4
---------- ----------
Deferred Credits and Other:
Accumulated deferred income taxes . . . . . . . . . . . . . . . . . 225.8 229.2
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.2 73.5
---------- ----------
254.0 302.7
---------- ----------
$ 1,882.3 $ 1,858.6
---------- ----------
---------- ----------
</TABLE>
See Notes to Consolidated Financial Statements.
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ANR PIPELINE COMPANY AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED EARNINGS
(Millions of Dollars)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
--------------------- ---------------------
1995 1994 1995 1994
--------- --------- --------- ---------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Revenues:
Storage and transportation:
Others . . . . . . . . . . . . . . . . . . . . . . . . . $ 161.5 $ 165.1 $ 353.3 $ 354.9
Related parties . . . . . . . . . . . . . . . . . . . . . 2.3 4.8 4.0 10.6
Gas sales:
Others . . . . . . . . . . . . . . . . . . . . . . . . 6.0 2.9 15.5 17.0
Related parties . . . . . . . . . . . . . . . . . . . . 10.7 20.5 20.9 49.5
Other revenues:
Others . . . . . . . . . . . . . . . . . . . . . . . . 3.4 2.1 5.5 5.3
Related parties . . . . . . . . . . . . . . . . . . . . 10.9 7.2 16.4 9.7
--------- --------- --------- ---------
194.8 202.6 415.6 447.0
--------- --------- --------- ---------
Costs and Expenses:
Operation and maintenance:
Others . . . . . . . . . . . . . . . . . . . . . . . 70.9 60.2 129.9 137.6
Related parties . . . . . . . . . . . . . . . . . . . 25.2 23.3 52.7 50.2
Cost of gas . . . . . . . . . . . . . . . . . . . . . . 21.5 31.5 53.8 71.8
Depreciation . . . . . . . . . . . . . . . . . . . . . . 11.5 12.3 24.5 24.6
Interest expense . . . . . . . . . . . . . . . . . . . . 14.6 13.7 28.7 25.9
Taxes on income . . . . . . . . . . . . . . . . . . . . 19.0 18.3 45.0 45.0
--------- --------- --------- ---------
162.7 159.3 334.6 355.1
--------- --------- --------- ---------
Net Earnings . . . . . . . . . . . . . . . . . . . . . . . 32.1 43.3 81.0 91.9
Dividends on preferred stock . . . . . . . . . . . . . . - .7 - 1.5
--------- --------- --------- ---------
Earnings Available for Common Stockholder . . . . . . . . . $ 32.1 $ 42.6 $ 81.0 $ 90.4
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>
See Notes to Consolidated Financial Statements.
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ANR PIPELINE COMPANY AND SUBSIDIARIES
STATEMENT OF CONSOLIDATED CASH FLOWS
(Millions of Dollars)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
------------------------
1995 1994
-------- --------
(Unaudited)
<S> <C> <C>
Cash Flows from Operating Activities:
Net earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 81.0 $ 91.9
Adjustments to reconcile net earnings to net cash provided by
operating activities:
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . 25.6 25.8
Net (increase) decrease in working capital:
Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . (37.9) 21.8
Related parties . . . . . . . . . . . . . . . . . . . . . . . 2.9 (30.1)
Net decrease in other assets/liabilities . . . . . . . . . . . . 9.8 23.9
-------- --------
Total adjustments . . . . . . . . . . . . . . . . . . . . . . .4 41.4
-------- --------
Net cash provided by operating activities . . . . . . . . . . . . 81.4 133.3
-------- --------
Cash Flows from Investing Activities:
(Increase) decrease in note receivable from related party . . . . . . (114.1) 145.8
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . (10.7) (41.9)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 .4
-------- --------
Net cash (used in) provided by investing activities . . . . . . . (124.3) 104.3
-------- --------
Cash Flows from Financing Activities:
Proceeds from issuance of long-term debt . . . . . . . . . . . . . . . 75.0 125.0
Retirement of long-term debt and capital lease obligations . . . . . . (1.3) (1.5)
Early retirement of preferred stock . . . . . . . . . . . . . . . . . - (34.0)
Common stock dividends paid . . . . . . . . . . . . . . . . . . . . . (30.1) (331.0)
Preferred stock dividends paid . . . . . . . . . . . . . . . . . . . . - (1.8)
-------- --------
Net cash provided by (used in) financing activities . . . . . . . 43.6 (243.3)
-------- --------
Net Increase (Decrease) in Cash and Cash Equivalents . . . . . . . . . . .7 (5.7)
Cash and Cash Equivalents at Beginning of Period . . . . . . . . . . . . 22.0 33.9
-------- --------
Cash and Cash Equivalents at End of Period . . . . . . . . . . . . . . . $ 22.7 $ 28.2
-------- --------
-------- --------
</TABLE>
See Notes to Consolidated Financial Statements.
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ANR PIPELINE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies
For additional information relative to operations and financial
position, reference is made to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1994. Certain reclassifications of prior
period statements have been made to conform with current reporting
practices. The effect of the reclassifications was not material to the
Company's consolidated financial position or results of operations.
Supplemental information relative to the Statement of Consolidated Cash
Flows includes the following: The Company made cash payments for interest,
net of interest capitalized, of $24.6 million and $19.3 million for the six-
month periods ended June 30, 1995 and 1994, respectively. Cash payments for
income taxes amounted to $53.4 million and $19.4 million for the six-month
periods ended June 30, 1995 and 1994, respectively.
2. Income Taxes
<TABLE>
Provisions for income taxes were as follows (millions of dollars):
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
--------------------- ---------------------
1995 1994 1995 1994
--------- --------- --------- ---------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Federal Income Taxes:
Currently payable . . . . . . . . . . . . . . . . $ 23.4 $ 9.0 $ 51.9 $ 41.3
Deferred . . . . . . . . . . . . . . . . . . . . . (5.9) 10.3 (7.9) 2.3
--------- --------- --------- ---------
17.5 19.3 44.0 43.6
State and City Income Taxes . . . . . . . . . . . . . . 1.5 (1.0) 1.0 1.4
--------- --------- --------- ---------
$ 19.0 $ 18.3 $ 45.0 $ 45.0
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>
3. Common Stock
All of the issued and outstanding common stock of the Company is owned
by American Natural Resources Company, a wholly-owned subsidiary of Coastal
Natural Gas Company. Coastal Natural Gas Company is a wholly-owned
subsidiary of The Coastal Corporation. Therefore, earnings and cash
dividends per common share have no significance and are not presented.
4. Litigation, Environmental and Regulatory Matters
Litigation
Numerous lawsuits and other proceedings which have arisen in the
ordinary course of business are pending or threatened against the Company or
its subsidiaries. Although no assurances can be given and no determination
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can be made at this time as to the outcome of any particular lawsuit or
proceeding, the Company believes there are meritorious defenses to
substantially all such claims and that any liability which may finally be
determined should not have a material adverse effect on the Company's
consolidated financial position or results of operations.
Environmental Matters
The Company's operations are subject to extensive and evolving federal,
state and local environmental laws and regulations which may affect such
operations and costs as a result of their effect on the construction,
operation and maintenance of its pipeline facilities. The Company
anticipates annual capital expenditures of $2 million over the next several
years aimed at maintaining compliance with such laws and regulations.
Additionally, appropriate governmental authorities may enforce the laws and
regulations with a variety of civil and criminal enforcement measures,
including monetary penalties and remediation requirements.
The Comprehensive Environmental Response, Compensation and Liability
Act, also known as Superfund, as reauthorized, imposes liability, without
regard to fault or the legality of the original act, for disposal of a
"hazardous substance." The Company has been named as a potentially
responsible party in five Superfund waste disposal sites. At the four sites
for which the Environmental Protection Agency has developed sufficient
information to estimate total cleanup costs of approximately $31.6 million,
the Company estimates its pro-rata exposure is approximately $.8 million. At
the fifth site, the Company has been named a de minimis potentially
responsible party. Since no estimate has been made of the total cleanup
costs, the Company is unable to calculate its share of those costs.
There are additional areas of environmental remediation
responsibilities which may fall on the Company. The states have regulatory
programs that mandate waste cleanup. The Clean Air Act Amendments of 1990
include new permitting regulations which will result in increased operating
expenditures.
Future information and developments will require the Company to
continually reassess the expected impact of these environmental matters.
However, the Company has evaluated its total environmental exposure based on
currently available data, including its potential joint and several
liability, and believes that compliance with all applicable laws and
regulations will not have a material adverse impact on the Company's
liquidity, consolidated financial position or results of operations.
Regulatory Matters
On March 10, 1992, the Company submitted to the Federal Energy
Regulatory Commission ("FERC") a comprehensive Interim Settlement designed
to resolve all outstanding issues resulting from its 1989 rate case and its
1990 proposed service restructuring proceeding. The Interim Settlement
became effective November 1, 1992 and expired with the Company's
implementation of Order 636 on November 1, 1993. Under the Interim
Settlement, gas inventory demand charges were collected from the Company's
resale customers for the period November 1, 1992 through October 31, 1993.
This method of gas cost recovery required refunds for any over-collections
and placed the Company at risk for under-collections. As required by the
Interim Settlement, the Company filed with the FERC on April 29, 1994, a
reconciliation report showing over-collections and, therefore, proposed
refunds totaling $45.1 million. Certain customers have disputed the level of
those refunds. By an order issued February 27, 1995, the FERC approved the
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Company's refund allocation methodology, and directed the Company to make
immediate refunds of $45.1 million, together with applicable interest,
subject to further investigation of the claims which the customers have
made. On May 2, 1995, the FERC issued a further order setting these issues
for an evidentiary hearing. Applicable refunds, including interest, were
paid on March 29, 1995. Certain customers have also sought judicial review
before the United States Court of Appeals for the D.C. Circuit of the FERC's
approval of the refund allocation methodology.
On April 8, 1992, the FERC issued Order 636, which required significant
changes in the services provided by interstate natural gas pipelines. The
Company and numerous other parties have sought judicial review of aspects of
Order 636. The case is currently in the briefing phase before the United
States Court of Appeals for the D.C. Circuit. ANR Pipeline placed its
restructured services under Order 636 into effect on November 1, 1993. As a
result, the Company no longer provides a merchant service and now offers a
wide range of "unbundled" transportation, storage and balancing services.
However, the Company still purchases a residual quantity of gas under
certain remaining gas purchase contracts. The Company's Order 636
restructured tariff provides a transitional mechanism for the purpose of
recovering from, or refunding to, its customers any pricing differential
between costs incurred to purchase this gas and the amount the Company
recovers through the auctioning of such gas on the open market in producing
areas. Several persons, including ANR Pipeline, have sought judicial review
of aspects of the FERC's orders approving the Company's restructuring
filings. Those appeals have been held in abeyance by the United States Court
of Appeals for the D.C. Circuit, pending further order. On March 24, 1994,
the FERC issued its "Fourth Order on Compliance Filing and Third Order on
Rehearing," which addressed numerous rehearing issues and confirmed that
after minor required tariff modifications, the Company is now fully in
compliance with Order 636 and the requirements of the orders on ANR
Pipeline's restructuring filings. The FERC issued a further order regarding
certain compliance issues on July 1, 1994. In accordance with this order,
the Company filed revised tariff sheets on July 18, 1994, which were
accepted by order issued April 12, 1995.
On November 1, 1993, the Company filed a general rate increase with the
FERC under Docket No. RP94-43. The increase represents the effects of higher
plant investment, Order 636 restructuring costs, rate of return and tax rate
changes, and increased costs related to the required adoption of recent
accounting rule changes, i.e., Statement of Financial Accounting Standards
No. 106, "Employers' Accounting for Postretirement Benefits Other Than
Pensions" and Statement of Financial Accounting Standards No. 112,
"Employers' Accounting for Postemployment Benefits." On March 23, 1994, the
FERC issued an order granting and denying various requests for summary
disposition and establishing hearing procedures for issues remaining to be
investigated in this proceeding. The order required the reduction or
elimination of certain costs which resulted in revised rates that reflect an
$85.7 million increase in the cost of service from that approved in the
Interim Settlement and a $182.8 million increase over the Company's approved
rates for its restructured services under Order 636. On April 29, 1994, the
Company filed a motion with the FERC that placed the new rates into effect
May 1, 1994, subject to refund. On September 21, 1994, the FERC accepted the
Company's filing in compliance with the March 23, 1994 order, subject to
further modifications including an additional reduction in cost of service
of approximately $5 million. The Company submitted its compliance filing to
the FERC on October 6, 1994, which the FERC accepted by order issued
February 8, 1995, subject to a further compliance filing requirement. This
compliance filing was submitted by ANR Pipeline on March 10, 1995, and was
accepted by order issued May 3, 1995, subject to one additional compliance
filing requirement, which the Company filed on May 18, 1995 and which was
accepted by order issued on June 30, 1995. On December 8, 1994, the FERC
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<PAGE 9>
issued its order denying rehearing of the March 23, 1994 order. On January
26, 1995, ANR Pipeline sought judicial review of these orders before the
United States Court of Appeals for the D.C. Circuit. The FERC has also
issued orders in ANR Pipeline's rate proceeding that apply a new policy
governing the order of attribution of revenues received by ANR Pipeline
related to transition costs under Order 636. The Company has also sought
rehearing of certain aspects of those orders, and has also sought judicial
review before the United States Court of Appeals for the D.C. Circuit.
ANR Pipeline has executed a Settlement Agreement (the "Settlement
Agreement") with Dakota Gasification Company ("Dakota") and the Department
of Energy which resolves litigation concerning purchases of synthetic gas by
the Company from the Great Plains Coal Gasification Plant (the "Plant").
That litigation, originally filed in 1990 in the United States District
Court in North Dakota, involved claims regarding the Company's obligations
under certain gas purchase and transportation contracts with the Plant. The
Settlement Agreement resolves all disputes between the parties, amends the
gas purchase agreement between the Company and Dakota and terminates the
transportation contract. The Settlement Agreement is subject to final FERC
approval, including an approval for the Company to recover the settlement
costs from its customers. On August 3, 1994, the Company filed a petition
with the FERC requesting: (a) that the Settlement Agreement be approved;
(b) an order approving ANR Pipeline's proposed tariff mechanism for the
recovery of the costs incurred to implement the Settlement Agreement; and
(c) an order dismissing a proceeding currently pending before the FERC,
wherein certain of ANR Pipeline's customers have challenged Dakota's pricing
under the original gas supply contract. On October 18, 1994, the FERC issued
an order consolidating the Company's petition with similar petitions of
three other pipeline companies and setting the Settlement Agreement and
other Dakota-related proceedings for limited hearing before an
Administrative Law Judge who must render an initial decision by December 31,
1995. On December 20, 1994, ANR Pipeline filed its testimony, and has
responded to numerous discovery requests. Intervenors from the ratepayer
group submitted their answering testimony on March 28, 1995. The hearing was
conducted from June 20, 1995 to July 14, 1995, and briefs will now be
submitted to the Adminstrative Law Judge.
Order 636 provides mechanisms for recovery of transition costs
associated with compliance with that Order. The Company has estimated that
its transition costs will amount to approximately $150 million, which will
consist primarily of gas supply realignment costs, the cost of stranded
pipeline investment and the Dakota costs described above. As of June 30,
1995, the Company has incurred transition costs in the amount of $49.8
million. The Company has filed for recovery of approximately $44.5 million
of these transition costs, which have been accepted and made effective by
the FERC, subject to refund and further proceedings. In addition, the
Company has filed for recovery of approximately $90 million of costs
associated with the Settlement Agreement, as discussed above. Additional
transition cost filings will be made by the Company in the future.
Certain of the above regulatory matters and other regulatory issues
remain unresolved among the Company, its customers, its suppliers and the
FERC. The Company has made provisions which represent management's
assessment of the ultimate resolution of the above issues. As a result, the
Company anticipates that these regulatory matters will not have a material
adverse effect on its consolidated financial position or results of
operations. While the Company estimates the provisions to be adequate to
cover potential adverse rulings on these and other issues, it cannot
estimate when each of these issues will be resolved.
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<PAGE 10>
Item 2.A. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
The Notes to Consolidated Financial Statements contain information that
is pertinent to the following analysis.
Liquidity and Capital Resources
General. In June 1995, the Company completed a public offering of $75
million in principal amount of 7% Debentures due June 1, 2025, putable by
the holders for redemption at par on June 1, 2005. The net proceeds from
the sale of the Debentures were added to the general funds of the Company,
which the Company intends to use for the repayment of outstanding Swiss
franc bonds maturing in October 1995 and for general corporate purposes.
The 125 million Swiss franc bonds have a dollar equivalence of $58.1 million
and an effective interest rate of 10.7%.
Management believes that the Company's stable financial position and
earnings ability will enable it to continue to generate and obtain capital
for financing needs in the foreseeable future.
Environmental. Information concerning environmental matters is set
forth in Note 4 of Notes to Consolidated Financial Statements included
herein.
Results of Operations
ANR Pipeline placed its restructured services under Order 636 into
effect on November 1, 1993 (see Note 4 of Notes to Consolidated Financial
Statements). As a result, the Company no longer offers a merchant service
and has bought out or assigned a significant portion of its gas purchase
contracts. The Company is continuing to negotiate the termination of the
remaining gas purchase contract obligations. The Company's Order 636
restructured tariff provides mechanisms for the purpose of recovering from
or refunding to its transportation customers any pricing differential
between costs incurred to purchase gas under these contracts and the amounts
recovered through auctioning of such gas on the open market. As a result of
Order 636 recovery mechanisms, the Company believes it will recover any
costs associated with the resolution of these negotiations with no
significant financial impact.
The change in the Company's earnings for the three- and six-month
periods ended June 30, 1995 in comparison to the corresponding periods in
1994 is a result of the following:
Revenues. Storage and transportation revenues decreased for the three-
and six-month periods ended June 30, 1995 as compared to the same periods in
1994 by $6.1 million and $8.2 million, respectively. These decreases
reflect increased competition across the United States natural gas industry,
magnified by last winter's warm weather. Transportation revenues include
provisions for rate related contingencies associated with Docket No. RP94-43
of $9.6 million and $13.8 million for the three- and six-month periods
ended June 30, 1995, respectively, while the same periods in 1994 both
included a provision of $6.5 million. On a six-month ended basis, a
reduction in revenues associated with certain transportation services
provided by others also contributed to the decrease. The earnings impact of
this decrease was offset by a corresponding reduction in operation and
maintenance. The six-month ended revenue decrease was partially offset by
an increase associated with cost recovery mechanisms related to above market
gas purchases, as discussed above.
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<PAGE 11>
Gas sales revenues decreased for the three- and six-month periods ended
June 30, 1995 as compared to the same periods in 1994 by $6.7 million and
$30.1 million, respectively, primarily as a result of decreases in the
quantity of gas auctioned on the open market, discussed above, and to a
lesser extent due to lower spot market prices.
Other revenues increased for the three- and six-month periods ended
June 30, 1995 as compared to the same periods in 1994 by $5 million and $6.9
million, respectively. These increases were largely due to additional
revenues from investments in pipeline partnerships and increased interest
income from a related party.
Operation and Maintenance. Operation and maintenance expenses
increased for the three-month period ended June 30, 1995 by $12.6 million
and decreased for the six-month period ended June 30, 1995 by $5.2 million.
The increase in the three-month ended period was largely due to a benefit
included in the second quarter of 1994 related to revisions of certain
estimated costs. On a six-month basis, this increase was offset by a
reduction in transportation services provided by others and adjustments for
prior periods related to ad valorem taxes.
Cost of Gas. Cost of gas decreased for the three- and six-month
periods ended June 30, 1995 as compared to the same periods in 1994 by $10
million and $18 million, respectively. These variances primarily result
from decreases in the quantity of gas purchased under the Company's
remaining gas purchase contracts, partially offset by increases in the
amortization of previously deferred costs associated with above market gas
purchases, which are offset in transportation revenues, as discussed above.
Item 2.B. Other Developments.
The Company filed an application with the FERC to construct, at a cost
of $15.3 million, approximately 12 miles of new pipeline in the State of
Michigan (the "Link Project") which will interconnect to approximately 8
miles of new pipeline to be constructed by Niagara Gas Transmission, Ltd.
("Niagara"), a wholly-owned subsidiary of Consumers' Gas Company
("Consumers") at the Canadian-United States border. On March 27, 1995,
Niagara filed an application with the National Energy Board of Canada for
regulatory authorization for the Canadian segment of the Link Project. The
Company's application for regulatory approval, originally filed with the
FERC on November 9, 1994, was amended on July 7, 1995. The amendment
includes executed precedent agreements with two firm shippers (Consumers and
Michigan Consolidated Gas Company) and a change in the in-service date to
November 1, 1996.
- 10 -
<PAGE>
<PAGE 12>
PART II
OTHER INFORMATION
Item 1. Legal Proceedings.
The information required hereunder is incorporated by reference
into Part II of this Report from Note 4 of Notes to Consolidated Financial
Statements set forth in Part I of this Report.
Item 2. Changes in Securities.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
(4) Second Supplemental Indenture dated as of June 1,
1995.
(27) Financial Data Schedule.
(b) Reports on Form 8-K.
A report on Form 8-K was filed on May 26, 1995. The item
reported was:
Item 7. Financial Statements and Exhibits.
(c) Exhibits
(1) Underwriting agreement dated May 24, 1995,
between the Company and NationsBanc Capital
Markets, Inc. and Lehman Brothers, as the
Underwriters.
(2) Ratio of Earnings to Fixed Charges.
(99) Press release dated May 25, 1995.
- 11 -
<PAGE>
<PAGE 13>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this Report to be signed on its behalf
by the undersigned thereunto duly authorized.
ANR PIPELINE COMPANY
(Registrant)
Date: August 11, 1995 By: WILLIAM L. JOHNSON
-----------------------
William L. Johnson
Vice President
and Controller
(As Authorized Officer and
Chief Accounting Officer)
- 12 -
<PAGE>
<PAGE 14>
INDEX TO EXHIBITS
<TABLE>
Exhibit
Number Description
- -------------------------------------------------------------------------------------------------------------
<S> <C>
4 Second Supplemental Indenture dated as of June 1, 1995
27 Financial Data Schedule
</TABLE>
- 12 -
<PAGE 1>
Exhibit 4
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
ANR Pipeline Company
and
Comerica Bank, Trustee
----------------
SECOND SUPPLEMENTAL INDENTURE
Dated as of June 1, 1995
to
INDENTURE
Dated as of February 15, 1994
-----------------
$75,000,000
7% Debentures due June 1, 2025
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
-1-
<PAGE>
<PAGE 2>
SECOND SUPPLEMENTAL INDENTURE, dated as of June 1, 1995, between ANR
Pipeline Company, a Delaware corporation (the "Company"), and Comercia Bank,
a Michigan banking corporation incorporated and existing under the laws of
the State of Michigan, as Trustee (the "Trustee"), to the Indenture dated as
of February 15, 1994 (the "Indenture"), between the Company and the Trustee.
Pursuant to Section 9.01(6) of the Indenture, each party agrees as
follows for the benefit of the other party and for the equal and ratable
benefit of the Holders of the Company's Debentures (as defined below) to
supplement the Indenture to establish the form and terms of a Series of
Securities of the Company under the Indenture to be entitled the "7%
Debentures due June 1, 2025":
ARTICLE ONE
FORM AND TERMS OF SECURITIES
SECTION 1.01. Terms of Securities To Be Issued.
(a) A Series of Securities which shall be designated the "7%
Debentures due June 1, 2025" (the "Debentures") shall be executed,
authenticated and delivered in accordance with the provisions of, and shall
in all respects be subject to, the definitions, terms, conditions and
covenants of the Indenture, including without limitation the terms set forth
in this Second Supplemental Indenture.
(b) Pursuant to Section 2.02 of the Indenture, the Debentures shall
initially be issued in the form of one or more Global Securities.
(c) The aggregate principal amount of Debentures which may be
authenticated and delivered under this Second Supplemental Indenture shall
not exceed $75,000,000 (except for Debentures authenticated and delivered
upon transfer of, or in exchange for, or in lieu of, other Debentures
pursuant to Section 2.07, 2.08, 2.11 or 9.05 of the Indenture). The entire
amount of Debentures may forthwith be executed by the Company and delivered
to the Trustee and shall be authenticated by the Trustee and delivered to or
upon the order of the Company pursuant to Section 2.03 of the Indenture.
(d) The Debentures shall mature on June 1, 2025.
(e) The Debentures shall bear interest, and such interest shall be
payable, as provided in Article Two hereof.
SECTION 1.02. Form of the Debentures.
The Debentures and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A annexed hereto. The terms and
provisions contained in the Debentures shall constitute and are hereby
expressly made a part of this Second Supplemental Indenture.
ARTICLE TWO
PAYMENT OF INTEREST ON THE DEBENTURES
SECTION 2.01. Interest Payment Dates.
(a) The Debentures shall bear interest from June 1, 1995 or from the
most recent Interest Payment Date (as hereinafter defined) to which interest
has been paid or duly provided for, at the rate of 7% per annum, and such
interest shall be payable each June 1 and December 1 (each an "Interest
-2-
<PAGE>
<PAGE 3>
Payment Date") to the person in whose name the Debenture is registered at
the close of business on the regular record date (the "Regular Record Date")
for any such Interest Payment Date, which shall be the fifteenth calendar
day of the month preceding the month in which such Interest Payment Date
occurs (whether or not a Business Day).
(b) The first Interest Payment Date on the Debentures shall be
December 1, 1995.
ARTICLE THREE
REDEMPTION
SECTION 3.01. Redemption at the Option of the Company.
The Debentures are not redeemable at the option of the Company prior to
their maturity.
SECTION 3.02. Redemption at the Option of the Holders.
(a) On June 1, 2005, or if such date is not a Business Day, then the
next succeeding Business Day (the "Redemption Date"), each Holder of
Debentures will have the right (the "Redemption Right") to require the
Company to redeem all or any part (equal to $1,000 in principal amount or an
integral multiple thereof) of such Holder's Debentures, in accordance with
this Section 3.02, at a redemption price equal to 100% of the aggregate
principal amount thereof (the "Redemption Price"), plus accrued and unpaid
interest, if any, to the Redemption Date.
(b) On or prior to March 15, 2005, the Company shall send, by first
class mail, postage prepaid, a notice of the Redemption Right to each Holder
of Debentures at its address appearing in the Security Register, with a copy
to the Trustee, which notice shall contain all instructions and materials
necessary to enable such Holder to submit its Debentures for redemption
pursuant to the Redemption Right. Such notice shall state:
(1) that such Holder has the Redemption Right pursuant to this
Section 3.02;
(2) the Redemption Date;
(3) the Redemption Price (including the amount of any accrued and
unpaid interest);
(4) that any Debenture not submitted for redemption will continue
to accrue interest;
(5) that on the Redemption Date the Redemption Price shall become
due and payable upon each Debenture submitted for redemption pursuant
to the Redemption Right and that, unless the Company defaults in paying
the Redemption Price therefor, any Debenture submitted for redemption
pursuant to the Redemption Right shall cease to accrue interest after
the Redemption Date;
(6) that any Holder electing to have a Debenture redeemed
pursuant to the Redemption Right will be required to surrender the
Debenture, or transfer the Debenture by book-entry, with the form
entitled "Option of Holder to Elect Redemption on June 1, 2005" on the
reverse side of the Debenture completed, to the Trustee during the
period from April 1, 2005 and prior to 5:00 p.m. (New York City time)
-3-
<PAGE>
<PAGE 4>
on April 30, 2005 (or if such date is not a Business Day, then the next
succeeding Business Day) at the address specified in such notice;
(7) that any election on the part of a Holder to exercise the
Redemption Right in accordance with this Section 3.02 shall be
irrevocable on the part of the Holder and may not be withdrawn; and
(8) that Holders whose Debentures are being redeemed only in part
will be issued a new Debenture or Debentures equal in principal amount
to the unredeemed portion of the Debentures surrendered (which
unredeemed portion must be equal to $1,000 in principal amount or an
integral multiple thereof).
(c) On or prior to the Redemption Date, the Company shall deposit with
the Trustee or with the Paying Agent (or, if the Company is acting as its
own Paying Agent, segregate and hold in trust as provided in Section 2.05 of
the Indenture) an amount of money sufficient to pay the Redemption Price of,
and (except if the Redemption Date shall be an Interest Payment Date) any
accrued and unpaid interest on, all Debentures or portions thereof which are
to be redeemed on that date.
(d) The Debentures to be redeemed shall, on the Redemption Date,
become due and payable at the Redemption Price thereof and from and after
such date (unless the Company shall default in the payment of the Redemption
Price) such Debentures shall cease to bear interest. Upon submission of any
Debenture for redemption in accordance with this Section 3.02, such
Debenture shall be paid by the Company at the Redemption Price, plus accrued
and unpaid interest, if any, to the Redemption Date; provided, however, that
installments of interest whose Stated Maturity is on or prior to the
Redemption Date shall be payable to the Holders of such Debentures
registered as such on the relevant Regular or Special Record Date according
to the terms and provisions of such Debentures and Section 2.13 of the
Indenture.
(e) If any Debenture is to be redeemed in part, the Company shall
execute and the Trustee shall authenticate and deliver to the Holder of such
Debenture, without service charge, a new Debenture or Debentures equal in
principal amount to the unredeemed portion of the Debenture surrendered
(which unredeemed portion must be equal to $1,000 in principal amount or an
integral multiple thereof).
(f) The Company shall comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to
the extent such laws and regulations are applicable in connection with the
redemption of Debentures pursuant to the Redemption Right. To the extent the
provisions of any such rule conflict with the provisions of the Indenture
relating to the Redemption Right, the Company shall comply with the
provisions of such rule and be deemed not to have breached its obligations
relating to the Redemption Right by virtue thereof.
ARTICLE FOUR
MISCELLANEOUS
SECTION 4.01. Definitions.
All the terms used in this Second Supplemental Indenture which are
defined in the Indenture shall have the meanings specified in the Indenture,
unless otherwise provided herein or unless the context of this Second
Supplemental Indenture otherwise requires.
-4-
<PAGE>
<PAGE 5>
SECTION 4.02. Governing Law.
THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THIS SECOND SUPPLEMENTAL
INDENTURE AND THE DEBENTURES WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAW.
SECTION 4.03. Successors.
All agreements of the Company in this Second Supplemental Indenture and
the Debentures shall bind its successor. All agreements of the Trustee in
this Second Supplemental Indenture shall bind its successor.
SECTION 4.04. Duplicate Originals.
The parties may sign any number of copies of this Second Supplemental
Indenture. Each signed copy shall be an original, but all of them together
represent the same agreement.
-5-
<PAGE>
<PAGE 6>
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Second
Supplemental Indenture to be duly executed, and their respective corporate
seals to be hereunto affixed and attested, all as of the date first written
above.
ANR PIPELINE COMPANY
[SEAL]
By: /s/ Donald H. Gullquist
--------------------------
Donald H. Gullquist
Senior Vice President
Attest:
By: /s/ Austin M. O'Toole, Esq.
------------------------------
Austin M. O'Toole, Esq.
Senior Vice President
COMERICA BANK
By: /s/ James Kowalski
--------------------------
James Kowalski
Trust Administrator
-6-
<PAGE>
<PAGE 7>
EXHIBIT A
[FORM OF FACE OF DEBENTURE]
[APPLICABLE TO GLOBAL DEBENTURE:]
[UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR THE
INDIVIDUAL DEBENTURES REPRESENTED HEREBY, THIS GLOBAL DEBENTURE MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE (I) BY THE DEPOSITORY TO A NOMINEE OF THE
DEPOSITORY OR (II) BY A NOMINEE OF THE DEPOSITORY OR THE DEPOSITORY TO A
SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY
AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY,
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.]
ANR PIPELINE COMPANY
7% DEBENTURES
DUE JUNE 1, 2025
Rate of Interest Maturity Date Original Issue Date
- --------------- ------------- ------------------
7% June 1, 2025 June 1, 1995
No.
ANR Pipeline Company, a corporation duly organized and existing under
the laws of the State of Delaware (herein called the "Company"), for value
received, hereby promises to pay to or registered
assigns, the principal sum of on the Maturity Date shown above,
and to pay interest thereon, at the annual rate of interest shown above,
from June 1, 1995 or from the most recent Interest Payment Date (as
hereinafter defined) to which interest has been paid or duly provided for,
payable semi-annually on June 1 and December 1 of each year and at maturity
(an "Interest Payment Date"), commencing on the first such date after the
Original Issue Date shown above. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in the Indenture, be paid to the
person in whose name this Debenture is registered at the close of business
on the Regular Record Date for any such Interest Payment Date, which shall
be the fifteenth calendar day of the month preceding the month in which such
Interest Payment Date occurs (whether or not a Business Day). Any such
interest not so punctually paid or duly provided for, and any interest
payable on such defaulted interest (to the extent lawful), will forthwith
cease to be payable to the Holder on such Regular Record Date and shall be
paid to the person in whose name this Debenture is registered at the close
of business on a special record date for the payment of such defaulted
interest to be fixed by the Company, notice of which shall be given to
Holders of Debentures not less than 15 days prior to such special record
date. Payment of the principal of and interest on this Debenture will be
made at the agency of the Company maintained for that purpose in Detroit,
Michigan and at any other office or agency maintained by the Company for
such purpose, in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts;
A-1
<PAGE>
<PAGE 8>
provided, however, that, at the option of the Company, payment of interest
other than interest due on the Maturity Date, may be made by check mailed to
the address of the person entitled thereto as such address shall appear in
the Security Register.
Reference is hereby made to the further provisions of this Debenture
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this
Debenture shall not be entitled to any benefit under the Indenture or any
supplemental indenture thereto or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, ANR PIPELINE COMPANY has caused this instrument to
be executed in its corporate name by the facsimile signature of its duly
authorized officers and has caused a facsimile of its corporate seal to be
affixed hereunto or imprinted hereon.
ANR PIPELINE COMPANY
By:
-----------------------
Name:
Title:
ATTEST:
By:
----------------------------------
Name:
Title:
DATED:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the 7% Debentures due June 1, 2025, referred to in the
within-mentioned Indenture and is the Series designated in the within-
mentioned Second Supplemental Indenture.
COMERICA BANK,
as Trustee
By:
-----------------------
Authorized Signatory
A-2
<PAGE>
<PAGE 9>
[FORM OF REVERSE SIDE]
ANR PIPELINE COMPANY
7% DEBENTURES
DUE JUNE 1, 2025
This Debenture is one of a duly authorized issue of Debentures of the
Company (which term includes any successor corporation under the Indenture
herein referred to) designated as its 7% Debentures due June 1, 2025 (the
"Debentures"), issued or to be issued pursuant to the Indenture, dated as of
February 15, 1994 (the "Indenture"), between the Company and Comerica Bank,
as Trustee (the "Trustee", which term includes any successor trustee under
the Indenture), and under the Second Supplemental Indenture, dated as of
June 1, 1995 (the "Second Supplemental Indenture"), between the Company and
the Trustee. The terms of this Debenture include those stated in the
Indenture, in the Second Supplemental Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as in effect on
the date of the Indenture. Reference is hereby made to the Indenture and all
further supplemental indentures thereto for a statement of the respective
rights, limitation of rights, duties and immunities thereunder of the
Company, the Trustee and the Holders and of the terms upon which the
Debentures are, and are to be, authenticated and delivered.
The Debentures are a Series of Securities issued or to be issued by the
Company under the Indenture, and this Series is limited in aggregate
principal amount to $75,000,000. The Indenture provides that the Securities
of the Company referred to therein ("Securities"), including the Debentures,
may be issued in one or more Series, which different Series may be issued in
such aggregate principal amounts and on such terms (including, but not
limited to, terms relating to interest rate or rates, provisions for
determining such interest rate or rates and adjustments thereto, maturity,
redemption (optional and mandatory), sinking fund, covenants, and Events of
Default) as may be provided in or pursuant to the Authorizing Resolution
and/or supplemental indenture (if any) relating to the several Series.
This Debenture may not be redeemed at the option of the Company prior to
its Maturity Date.
On June 1, 2005, or if such date is not a Business Day, then the next
succeeding Business Day (the "Redemption Date"), each Holder of Debentures
will have the right (the "Redemption Right") to require the Company to
redeem all or any part (equal to $1,000 in principal amount or an integral
multiple thereof), of such Holder's Debentures for cash at a redemption
price equal to 100% of the aggregate principal amount thereof plus accrued
and unpaid interest, if any, to the Redemption Date.
On or prior to March 15, 2005, the Company will mail a notice to each
Holder stating that (a) in order for a Holder to exercise the Redemption
Right, the Holder must surrender the Debentures in respect of which the
Redemption Right is being exercised, together with the form entitled "Option
of Holder to Elect Redemption on June 1, 2005" set forth below, duly
completed, or transfer such Debentures by book-entry, to the Trustee during
the period from April 1, 2005 and prior to 5:00 p.m. (New York City time) on
April 30, 2005 (or if such date is not a Business Day, then the next
succeeding Business Day), (b) any election on the part of a Holder to
exercise the Redemption Right effected in accordance with the foregoing
shall be irrevocable on the part of the Holder and may not be withdrawn, (c)
Holders whose Debentures are being redeemed only in part will be issued new
Debentures equal in principal amount to the unredeemed portion of the
Debentures surrendered, which unredeemed portion must be equal to $1,000 in
principal amount or an integral multiple thereof, and (d) unless the Company
A-3
<PAGE>
<PAGE 10>
defaults in the payment of principal and accrued interest on the Debentures
to be redeemed on the Redemption Date, interest on such Debentures will
cease to accrue on the Redemption Date. The Company will comply with the
requirements of Rule 14e-1 under the Securities Exchange Act of 1934, as
amended, and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable to the redemption of the
Debentures pursuant to the Redemption Right.
If an Event of Default shall occur and be continuing, the principal of
all the Debentures may be declared due and payable in the manner and with
the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Debentures under the Indenture
at any time by the Company and the Trustee with the consent of the Holders
of a majority in aggregate principal amount of the Securities affected
thereby, voting as a single class (which may include the Debentures), at the
time outstanding. The Indenture also contains provisions permitting the
Holders of specified percentages in aggregate principal amount of the
Securities at the time outstanding to waive compliance by the Company with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder
of this Debenture shall be conclusive and binding upon such Holder and upon
all future Holders of this Debenture and of any Debenture issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this
Debenture.
The Indenture provides that no Holder may pursue any remedy under the
Indenture unless the Trustee shall have failed to act after notice of an
Event of Default and written request by Holders of at least 25% in principal
amount of the Securities of the applicable Series and the offer to the
Trustee of indemnity satisfactory to it; however, such provision does not
affect the right to sue for enforcement of any overdue payment on any
Debenture.
No reference herein to the Indenture and no provision of this Debenture
or of the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of and interest on
this Debenture at the times, places and rates, and in the coin or currency,
herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Debenture is registrable in the Security
Register upon surrender of this Debenture for registration of transfer at
the agency of the Company in Detroit, Michigan duly endorsed by, or
accompanied by a written instrument of transfer in substantially the form
accompanying this Debenture duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new
Debentures, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.
The Debentures are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in
the Indenture and subject to certain limitations set forth therein and on
the face of this Debenture, the Debentures are exchangeable for a like
aggregate principal amount of Debentures of a different authorized
denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover
A-4
<PAGE>
<PAGE 11>
any transfer tax or similar governmental charge payable in connection
therewith (other than any such transfer tax or similar governmental charge
payable upon exchanges pursuant to Section 2.11, 3A.08 or 9.05 of the
Indenture in which case such transfer taxes or similar governmental charges
shall be paid by the Company).
Prior to due presentment of this Debenture for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may
treat the person in whose name this Debenture is registered as the owner
hereof for all purposes, whether or not this Debenture be overdue, and
neither the Company, the Trustee nor any such agent shall be affected by
notice to the contrary.
All terms used in this Debenture which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
Customary abbreviations may be used in the name of a Debentureholder or
any assignee, such as: TEN COM (= tenants in common), TEN ENT(= tenants by
the entireties), JT TEN (= joint tenants with right of survivorship and not
as tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to
Minors Act).
The Company will furnish to any Holder of record of a Debenture, upon
written request, without charge, a copy of the Indenture and the Second
Supplemental Indenture. Requests may be made to: ANR Pipeline Company, c/o
The Coastal Corporation, Coastal Tower, Nine Greenway Plaza, Houston, Texas
77046-0995, Attention: Corporate Secretary.
A-5
<PAGE>
<PAGE 12>
ASSIGNMENT FORM
If you the Holder want to assign this Debenture, fill in the form below
and have your signature guaranteed:
I or we assign and transfer this Debenture to:
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
(Print or type name, address and zip code and
social security or tax ID number of assignees)
and irrevocably appoint ____________________________________________________
agent to transfer this Debenture on the books of the Company. The agent may
substitute another to act for him.
Dated:____________________________ Signed:__________________________
(Sign exactly as name
appears on the other
side of this Debenture)
Signature Guarantee:________________________________________________________
NOTICE: Signature(s) must be guaranteed by a member firm of the New
York Stock Exchange or a commercial bank or trust company.
OPTION OF HOLDER TO ELECT REDEMPTION ON JUNE 1, 2005
If you elect to have this Debenture redeemed by the Company on June 1,
2005, check the box:____
If you elect to have only part of this Debenture redeemed by the
Company on June 1, 2005, state the amount (multiples of $1,000 only).
$_______________
Dated:___________________________ Signed:_________________________
(Sign exactly as name appears on
the other side of this Debenture)
Signature Guarantee:______________________________________________________
A-6
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ANR PIPELINE
COMPANY FORM 10-Q QUARTERLY REPORT FOR THE PERIOD ENDED JUNE 30, 1995 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENT.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 23
<SECURITIES> 0
<RECEIVABLES> 422
<ALLOWANCES> 0
<INVENTORY> 41
<CURRENT-ASSETS> 486
<PP&E> 3,431
<DEPRECIATION> 2,251
<TOTAL-ASSETS> 1,882
<CURRENT-LIABILITIES> 279
<BONDS> 510
<COMMON> 0
0
0
<OTHER-SE> 839
<TOTAL-LIABILITY-AND-EQUITY> 1,882
<SALES> 36
<TOTAL-REVENUES> 416
<CGS> 54
<TOTAL-COSTS> 261
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 29
<INCOME-PRETAX> 126
<INCOME-TAX> 45
<INCOME-CONTINUING> 81
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 81
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
