PAGE 1 OF 25
File No.70-7367
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________________________________
POST-EFFECTIVE AMENDMENT NO. 3
TO APPLICATION - DECLARATION
UNDER THE
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
________________________________________________
National Fuel Gas Company Utility Constructors, Inc.
30 Rockefeller Plaza East Erie Extension
New York, New York 10112 Linesville, Pennsylvania 16424
________________________________________________
NATIONAL FUEL GAS COMPANY
(Name of top registered holding company)
________________________________________________
P. C. Ackerman J. P. Pawlowski
Senior Vice President Treasurer
National Fuel Gas Company Utility Constructors, Inc.
10 Lafayette Square 10 Lafayette Square
Buffalo, New York 14203 Buffalo, New York 14203
(Names and addresses of agents for service)
It is respectfully requested that the Commission send copies
of all notices, orders and communications to:
R. J. Tanski
Vice President
National Fuel Gas Distribution Corporation
10 Lafayette Square
Buffalo, New York 14203
PAGE 2 OF 25
Post Effective Amendment No. 2 is hereby amended and
restated in its entirety as follows:
Item 1. Description of Proposed Transaction
I. INTRODUCTION
National Fuel Gas Company ("National") is a public utility
holding company registered under the Public Utility Holding Company
Act of 1935, as amended ("Act"). National and its subsidiaries (the
"National Fuel Gas System", or "System") are involved in all phases
of the natural gas business.
National's wholly-owned subsidiaries include National Fuel
Gas Distribution Corporation ("Distribution"), National Fuel Gas
Supply Corporation ("Supply"), Penn-York Energy Corporation
("Penn-York"), Seneca Resources Corporation, Empire Exploration, Inc.
("Empire"), National Fuel Resources, Inc. ("NFR"), Utility
Constructors, Inc. ("UCI"), Highland Land and Minerals, Inc.,
Data-Track Account Services, Inc. and Leidy Hub, Inc. (formerly,
Enerop Corporation).
Distribution carries out the retail natural gas distribution
activities of the System in the states of New York and Pennsylvania.
Distribution is a local distribution company ("LDC") and its
LDC activities are subject to the jurisdiction of the New York Public
Service Commission and the Pennsylvania Public Utility Commission.
At its 1993 fiscal year end (September 30, 1993), Distribution
operated 14,494 miles of utility pipeline in its service territory.
PAGE 3 OF 25
Supply is an interstate natural gas pipeline and its
interstate natural gas pipeline activities are subject to the
jurisdiction of the Federal Energy Regulatory Commission ("FERC").
Supply owns and operates an integrated natural gas pipeline system
extending from southwestern Pennsylvania to the New York-Canadian
border at the Niagara River. Supply operates approximately 3,256
miles of transmission and gathering pipelines in addition to its 31
underground natural gas storage fields. Through January 1, 1994,
Supply operated approximately 1,700 productive natural gas and oil
wells in the Appalachian basin. Effective that date, Supply
transferred those wells to Empire in accordance with the provisions
of Section 12(f) and Rule 90 under the Act.
Penn-York operates three underground natural gas storage
fields and provides storage services for off-system customers.
Empire is involved in the exploration, development and
production of natural gas and oil reserves in the Appalachian and
midwestern regions of the United States. At its 1993 fiscal year
end, Empire owned an interest in approximately 473 productive wells.
These wells are located primarily in New York and Pennsylvania,
however Empire also owns an interest in wells located in Michigan and
West Virginia.
II. REQUEST FOR AUTHORITY
National and UCI have filed this Post-Effective Amendment to
the Application-Declaration on file in this proceeding to seek
authorization from the Securities and Exchange Commission
PAGE 4 OF 25
("Commission") to continue the operations of UCI pursuant to Section
2(b) of the Gas Related Activities Act of 1990 ("GRAA"). 1/
III. UCI'S ACTIVITIES
By order dated May 1, 1987 (HCAR No. 24381) the Commission
authorized National to acquire 100% of the capital stock of UCI.
UCI's offices and base of operations are located in Linesville,
Pennsylvania, six miles from the Pennsylvania-Ohio border. The
operations of UCI involve the construction of new and replacement
pipelines, well drilling and maintenance services, and site
construction and auxiliary services related to the natural gas
pipeline business. As authorized under the May 1, 1987 Order, UCI's
services are provided to other System subsidiaries and to
non-associate companies.
Under the terms of the May 1, 1987 Order, the Commission
required that, during each three-year period following National's
acquisition of UCI, the total revenues received by UCI from
non-associate companies should be less than the total revenues
received by UCI during the same period from associate, or System
companies. This requirement was based on the Commission's
_______________________
1/ Pub.L. 101-572, 104 Stat. 2810, November 15, 1990.
PAGE 5 OF 25
interpretation of Section 10(c)(1) 2/ and Section 11(b)(1) 3/ of
the Act at the time such authorization was granted.
Since National's acquisition of UCI, through the end of its
1991 fiscal year (September 30, 1991), billings by UCI for
construction and related services undertaken on behalf of System
companies totalled approximately $33,603,000. Billings to
non-associate companies during the same period totalled approximately
$28,849,000, or approximately 46% of total revenues. During the
1992, and 1993 fiscal years, however, billings to associate companies
totalled approximately $6,427,000, and billings to non-associate
companies totalled approximately $35,585,000, or approximately 85% of
total revenues. The majority of UCI's billings are attributable to
large diameter pipeline construction (i.e. over 8 inches in
diameter). Such large diameter pipeline construction suits UCI's
experience and complement of pipeline construction equipment.
UCI continues to perform pipeline and construction jobs for
System companies, however, over the last few years, the number of
major pipeline construction projects proposed by System companies has
decreased. Oil and gas well drilling activities had provided UCI
with a fair amount of System work and associated billings, however,
oil and natural gas prices in the Appalachian Basin have remained
_______________________
2/ Public Utility Holding Company Act of 1935, Section 10(c)(1), 15
U.S.C. Section 79J(c)(1).
3/ Id. Section 11(b)(1), 15 U.S.C. Section 79k(b)(1).
PAGE 6 OF 27
below the level at which Empire, the System's Appalachian oil and gas
exploration subsidiary, is inclined to drill a large number of
additional oil and gas wells. Thus, the amount of System work
available to UCI has decreased.
While the System does have preliminary plans for some major
construction projects in the service territory, such projects
typically involve extensive filings with the Federal Energy
Regulatory Commission and are subject to environmental and regulatory
delays. In order for UCI to maintain efficiencies with respect to
its labor force and to maintain the utilization of its construction
equipment, UCI has been successful in securing pipeline contracts
from other non-associate companies - primarily upstream natural gas
pipelines that provide natural gas supplies to the System. Such
non-associate companies have maintained a certain level of
construction projects in New York, Pennsylvania, Ohio, West Virginia,
Kentucky, Virginia, Maryland, Indiana, Michigan, and Illinois,
neighboring states easily serviced by UCI.
Tabulated below, on a fiscal year basis, are the billings
generated by UCI with respect to services rendered to associate
companies and non-associate companies.
PAGE 7 OF 27
Associate Non-Associate
Fiscal Year Companies Companies
Ended 9/30 Billings Billings Total
___________ _________ _____________ _____
($000's omitted)
1987* $ 2,482 $ 216 $ 2,698
1988 9,190 1,567 10,757
1989 7,802 3,263 11,065
1990 10,333 6,286 16,619
1991 3,796 17,517 21,313
_____________________________________________________________
Inception through
9/30/91 $33,603 $28,849 $62,452
1992 $4,364 $24,692 $29,056
1993 $2,063 $10,893 $12,956
_____________________________________________________________
Inception through
9/30/93 $40,030 $64,434 $101,464
*Acquisition in May 1987 - reflects approximately four months of
revenues.
During the last three fiscal years, the billings to
associate companies have decreased below the level of billings to
non-associate companies. This has resulted primarily because of the
reduced well drilling and major pipeline construction activities of
System companies.
PAGE 8 OF 25
IV. THE GAS RELATED ACTIVITIES ACT
As discussed in the Application-Declaration and the Order
authorizing National to acquire 100% of the capital stock of UCI,
unless approved by the Commission under Section 10 of the Act, it is
unlawful under Section 9(a) of the Act
for any registered holding company or any
subsidiary company thereof . . . to acquire,
directly or indirectly, any securities or utility
assets or any other interest in any business; 4/
National applied to the Commission under Section 10(a) of
the Act 5/ to acquire 100% of the capital stock of UCI. Section
10(b) of the Act provides, in pertinent part, that the Commission
shall approve the acquisition unless it finds that the acquisition
will be detrimental to the public interest or the interest of
investors or consumers.
Notwithstanding the provisions of Section 10(b), Section
10(c)(1) directs the Commission not to approve
an acquisition of securities or utility assets, or
of any other interest, which is . . . detrimental
to the carrying out of the provisions of Section
11. /6
______________________
4/ Id. Section 9(a)(1), 15 U.S.C. Section 79i(a)(1).
5/ Id. Section 10(a), 15 U.S.C. Section 79j(a).
6/ Id. Section 10(c)(1), 15 U.S.C. Section 79j(c)(1).
PAGE 9 OF 25
Section 11(b)(1) in turn, directs the Commission:
To require . . . that each registered holding
company, and each subsidiary company thereof,
shall take such action as the Commission shall
find necessary to limit the operations of the
holding-company system of which such company is a
part to a single integrated public-utility system,
and to such other businesses as are reasonably
incidental, or economically necessary or
appropriate to the operations of such integrated
public-utility system. 7/
The Section further provides:
The Commission may permit as reasonably
incidental, or economically necessary or
appropriate to the operations of one or more
integrated public utility systems the retention of
an interest in any [non-utility] business which
the Commission shall find necessary or appropriate
in the public interest or for the protection of
investors or consumers and not detrimental to the
proper functioning of such system . . . .
The Commission and commentators have generally referred to these
provisions as the "other business" clauses of Section 11(b)(1).
Section 11(b)(1) has been held by the Commission to require
a registered holding company to limit itself to the management and
operation of its electric or gas utility business and to such
non-utility businesses as will primarily further its utility
business. The Commission authorized National to acquire UCI under
its interpretation of Section 11(b)(1) which permitted the retention
______________________
7/ Id. Section 11(b)(1), 15 U.S.C. Section 79k(b)(1).
PAGE 10 OF 25
of non-utility interests or "other businesses" upon an affirmative
showing of an "operating or functional relationship" between the
non-utility business and the operations of the integrated utility
business of the holding company system. The "functional
relationship" was deemed to have been established upon National's
showing of the amount of pipeline work that UCI undertook for
associate companies, and National's representation that the levels of
such System work would account for more than one-half of UCI's
billings. 8/
As shown above, UCI had met the test of receiving 50% of its
revenues from associate companies during the first three-year
measurement cycle established by the Commission. It became apparent
that UCI would not meet the 50% test for the second three-year period
and National and UCI filed Post-Effective Amendment No. 1 in this
proceeding to request an appropriate change in the method of
measurement utilized for the functional relationship test.
National and UCI have now filed this Post-Effective
Amendment No. 3 to seek authorization from the Commission to continue
the activities of UCI pursuant to Section 2(b) of the GRAA.
______________________
8/ See discussion of this test described in CSW CREDIT, INC., HCAR
No. 23767 (July 19, 1985), 33 SEC Docket 1161.
PAGE 11 OF 25
In addition to the historical "functional relationship"
interpretation developed by the Commission under Section 11(b)(1) of
the Act, Section 2(b) of the GRAA provides that:
The acquisition by a registered company of any
interest in any company organized to participate
in activities . . . related to the supply of
natural gas, including exploration, development,
production, marketing, manufacture, or other
similar activities related to the supply of
natural or manufactured gas, shall be deemed, for
purposes of section 11(b)(1) of the Act, to be
reasonably incidental or economically necessary or
appropriate to the operation of such gas utility
companies, if--
(1) the Commission determines, after notice
and opportunity for hearing in which the
company proposing the acquisition shall have
the burden of proving, that such acquisition is
in the interest of consumers of each gas
utility company of such registered company or
consumers of any other subsidiary of such
registered company; and
(2) the Commission determines that such
acquisition will not be detrimental to the
interest of consumers of any such gas utility
company or other subsidiary or to the proper
functioning of the registered holding company
system.
National and UCI believe that UCI's pipeline construction
and related services are the types of "other similar activities
related to the supply of natural gas" referred to in Section 2(b) of
the GRAA. As stated in the Congressional Record during the
presentation of the GRAA, Senator D'Amato pointed out that the GRAA
"is limited to the acquisition of gas supply
related businesses. Investments in business,
which are not related to gas, such as real estate,
PAGE 12 OF 25
drug stores, or other similar activities, would
remain subject to the functional relationship test
requiring that the applicant prove that the
proposed activity is reasonably incidental or
economically necessary or appropriate to the
utility business". 9/
UCI's pipeline construction business involves the
construction of large diameter pipelines for System companies and
upstream pipeline suppliers which are used to supply natural gas to
the National Fuel Gas System and its retail and wholesale consumers.
Also described in the Congressional Record, was the concern
that the gas systems registered under the Act should "be effective
participants in the newly emerged competitive environment" that had
begun to develop in the interstate pipeline industry after the
issuance of FERC Order 436 (requiring the transportation of gas not
owned by the interstate pipelines). Such competitive environment
continues to evolve as the interstate pipelines are restructuring
their services to comply with the 636 series of FERC Orders.
UCI's pipeline construction activities, which have been
primarily undertaken in National's utility service territory or for
upstream pipeline suppliers, helps to assure that sufficient pipeline
capacity will be available to provide supplies of natural gas for the
______________________
/9 Congressional Record - S17586, October 27, 1990.
PAGE 13 OF 25
companies and consumers of the National Fuel Gas System. The
following table shows the approximate breakdown of UCI's contracts
and revenues within the service territory and for upstream suppliers.
Fiscal Year Ended Within National's Non-Associate Other
September 30 Service Territory Upstream Suppliers Parties
($000's omitted)
1987 No. of contracts 16 2 -
associated revenue $ 2,482 216 -
1988 No. of contracts 42 4 2
associated revenue $ 9,190 $ 1,486 $ 71
1989 No. of contracts 43 3 3
associated revenue $ 8,919 $ 1,421 $ 725
1990 No. of contracts 34 3 2
associated revenue $10,933 $ 5,060 $ 626
1991 No. of contracts 29 8 3
associated revenue $ 8,232 $11,848 $1,233
1992 No. of contracts 22 9 3
associated revenue $10,127 $18,797 $ 132
1993 No. of contracts 27 5 2
associated revenue $ 7,493 $ 5,222 $ 241
________________________________________________
SEVEN YEAR TOTAL
- - No. of contracts 213 34 15
- - Associated revenue $57,375 $43,860 $3,028
Under Section 2(b)(1) of the GRAA, National has the burden
of proving that the ownership and operation of UCI is in the interest
of consumers of National's gas utility subsidiary (Distribution) or
consumers of any of National's other subsidiaries.
Before the passage of the GRAA, compliance with the
functional relationship test (as measured by 50% of UCI's revenues)
PAGE 14 OF 25
was deemed to have been in the interest of National's consumers. As
described above, however, during the last three-year measurement
cycle, the proportion of billings issued by UCI to associate
companies has decreased.
Notwithstanding such shift in the proportion of billings,
National believes that the entire National Fuel Gas System has
benefited by having UCI included in the group of contractors
competing for most all of its System construction projects. Even
where UCI was not chosen as the Contractor, the System companies
believe that the winning bids submitted by other contractors have
been lower than they otherwise may have been, had UCI not been a
participant in the contract letting process. The increased
competition and overall lower prices for System projects are evident
because other contractors have offered to do work at prices lower
than UCI had offered. Nonetheless, UCI's construction pricing
practices are viewed as reasonable, because of the number of
contracts won by UCI for projects proposed by non-associate companies.
In addition, the projects undertaken by UCI for
non-associate companies helps UCI to maintain its labor force and
consistency in work crews. This helps to assure that an efficient
and competitive contractor will be available for gas supply projects
that are proposed by System companies. The System believes that
these factors have resulted in the reduction of overall construction
expenditures of the System during the past five years, and have
PAGE 15 OF 25
benefited both the LDC customers and other customers of the System
and the System's shareholders. To the extent that capital
construction expenditures can be reduced, this will have a dampening
effect on the rate increase requests of the System companies, helping
to minimize rate increase requests which would be borne by the LDC
customers. To the extent that UCI is successful in obtaining
contracts for projects for non-associate upstream pipelines, the cost
savings achieved on such projects are also ultimately passed along to
National's LDC customers through lower upstream rates.
Attached as Exhibit E-1 is a map showing the location of
National's system pipelines and utility service territory. The map
also includes the location of the facilities of the major upstream
pipeline suppliers in New York, Pennsylvania, Ohio, West Virginia,
Kentucky, Virginia, Maryland, Indiana, Michigan and Illinois that
bring natural gas to or through the System's utility service
territory. For the majority of its natural gas supplies that are not
produced locally by Empire and/or other local producers, the System
relies on natural gas transported under firm transportation and
storage contracts through the pipeline facilities of Transcontinental
Gas Pipeline Company (approximately 26 Million Cubic Feet Per Day
("MMCFD"), Columbia Gas Transmission (approximately 26 MMCFD),
Columbia Gulf Transmission Corporation (approximately 6 MMCFD),
Tennessee Gas Pipeline (approximately 272 MMCFD), Texas Eastern
Transmission Corp. (approximately 73 MMCFD) and CNG Transmission
Corp. (approximately 150 MMCFD) (all such quantities listed are those
PAGE 16 OF 25
in place as of January, 1994). Recently, Supply entered into a
precedent agreement with Empire State Pipeline ("Empire State") under
which Supply will have the ability to access up to 50 MMCFD of
capacity, on Empire State's pipeline to receive deliveries in the
systems utility service territory. The source for much of the gas in
the Empire State Pipeline is from the Michigan Basin. Distribution
also entered into an emergency interconnection agreement with Empire
State's Pipeline whereby Distribution may access gas supplies for the
use of its customers in emergency situations. As shown on Exhibit
E-1, these pipelines bring gas to National's System and those
pipelines travel through New York, Pennsylvania, Ohio, West Virginia,
Kentucky, Virginia, Maryland, Indiana, Michigan, and Illinois.
Replacements of, and upgrades to those pipeline systems provide a
direct benefit to National's customers by maintaining or increasing
the deliverability of gas supplies to National's utility service
territory. During periods when Distribution has temporary excess
supplies, Distribution also has the ability to utilize those
pipelines to sell such supplies to other LDC's who might find it
beneficial to purchase such temporary excess. A large number of
UCI's contracts with non-associate upstream suppliers have been with
Tennessee Gas Pipeline and CNG Transmission Corp., which two
pipelines combined, provide over half of the upstream pipeline
capacity utilized by the System. The major pipeline projects
undertaken by UCI for the upstream pipelines have been primarily in
the states of New York, Pennsylvania, Virginia, and West Virginia.
However, pipeline companies have requested UCI to compete for
PAGE 17 OF 25
projects in Kentucky, Maryland, Indiana, Michigan, and Illinois,
i.e., those states shown on Exhibit E-1. Such projects, either
pipeline renewals or new installations, allow the System flexibility
to receive supplies of gas through a large number of inter-connection
points as shown in Exhibit E-1.
From time to time, these major pipeline suppliers announce
pipeline expansion proposals to increase natural gas service to, and
through, the System's service territory. Such expansions sometimes
involve the facilities of the System and new service opportunities
for System companies. For example, during 1989 and 1990, UCI was a
major contractor for a major pipeline project that increased
throughput through System facilities. Details of the project are set
out in FERC Docket CP 88-194, et al., but, in summary, through
National's involvement in the projects, the System gained a direct
link to TransCanada Pipelines, Ltd. at an import point at the Niagara
River, and incremental capacity of 326.5 MMCF per day, or 119 BCF per
year, feeding into the System's transmission facilities.
Recent projects have also been announced by the pipeline
companies to increase pipeline capacity and services to, and through,
National's service territory. Details of the Liberty Transportation
Project are filed at FERC Docket CP 92-715, et. al. While the
project is designed to ultimately bring approximately 500 MMCF per
day of additional supplies to the New York City area, all of the
initial supplies, and almost half of the ultimate planned supplies
will be transported through a major interconnection point at Lebanon,
PAGE 18 OF 25
Ohio, and then eastward through portions of the System's service
territory to Leidy, Pennsylvania. National is connected to the major
facilities at Leidy through the 24-inch diameter pipeline that was a
major portion of the project referred to in the preceding paragraph
(CP 88-194).
Even more recent filings by the major pipeline suppliers
have proposed to expand facilities and services that would increase
the ability to transport natural gas supplies to the System, and/or
provide the opportunity for System companies to provide more services
to their customers. Texas Eastern Transmission Corp. has made two
recent FERC Filings (CP 93-565 and CP 94-5) to expand its system to
provide more transportation services to its customers in the
Northeast. Many of those customers are also storage customers of
National's system companies (Supply and Penn-York). Ultimate details
of such projects are expected to change and are subject to further
FERC filings, however these projects are here used simply as an
example of the ongoing development of the natural gas pipeline
systems to and through National's service territory. National
expects that such transportation projects will require associated
storage facilities which National is considering developing.
National believes that the opportunity to have UCI become involved in
the construction activities helps its System companies to augment
their opportunity for access to more supplies of natural gas, and
also provides the opportunity for System companies for increased
service opportunities for System customers.
PAGE 19 OF 25
National believes that such increased access to supplies for
the System, and UCI's activities to act as a contractor for these
pipeline and storage projects are those activities anticipated by the
GRAA.
Additionally, UCI's construction activities provide
diversification in sources of earnings for the shareholders of
National while maintaining the company's focus in the natural gas
business and natural gas related businesses.
In addition to National's burden under Section 2(b)(1) of
the GRAA, the Commission must determine that the ownership and
operation of UCI as proposed "will not be detrimental to the interest
of consumers of any such gas utility or other subsidiary or to the
proper functioning of the registered holding company system".
National's current equity investment in UCI is $5,959,753.
UCI also has $7,200,000 of short term borrowings outstanding through
the System Money Pool (See HCAR No. 35-25964, December 29, 1993).
Such investment is de minimus when compared to National's overall
capitalization of over $1.8 billion.
National believes that UCI's construction activities provide
diversification in sources of earnings for the shareholders of
National while maintaining the company's focus in the natural gas
business and natural gas related businesses and without affecting the
proper functioning of the System. The System believes that it is
appropriate to maintain the operations of UCI so that such
construction expertise related to natural gas pipelines will remain
PAGE 20 OF 25
available to System companies, and actually be located within the
service territory of the System. For work that UCI undertakes for
System companies, the System will observe the standards of Section 13
under the Act and the Rules promulgated thereunder. As described
above, the activities of UCI are directly related to the supply of
natural gas for National's system.
The expertise of UCI is generally in pipeline construction
activities in the service area of the System and in the area
adjoining the service territory in which pipelines of upstream
suppliers are located. Since it is the System's desire to have an
experienced contractor readily available for System projects, and
notwithstanding that upstream pipeline suppliers have facilities that
extend to Texas, Louisiana, and the Gulf Coast, in order to help
assure that the operation's of UCI ". . . will not be detrimental . .
. to the proper functioning of the registered holding company
system,". . . UCI believes that it is appropriate to commit to limit
its construction activities to the states of New York, Pennsylvania,
Ohio, West Virginia, Kentucky, Virginia, Maryland, Indiana, Michigan,
and Illinois. In this way, UCI can maintain and improve its
construction techniques in areas of similar terrain and where those
techniques will ultimately be available for, and directed toward the
primary benefit of National's System and its customers. By
committing to not extend its operations to geographic areas not
within the expertise of UCI and/or to areas of the country where
construction practices and techniques would not necessarily be
PAGE 21 OF 25
applicable to System construction projects, UCI intends to always be
available for System construction projects for the ultimate benefit
of customers of National's system.
Item 2. Fees, Commissions and Expenses
Filing Fee $2,000
Fees and Expenses of
Counsel for National
(Estimated) 2,000
Misc. Expenses
(Estimated) 1,000
______
$5,000
Item 3. Applicable Statutory Provisions
Sections 9, and 10 of the Act and Section 2(b) of the Gas
Related Activities Act are considered applicable to the proposed
transactions.
The applicability of each of the sections and rules to each
of the proposed transactions are set out as follows:
Proposed Transaction Applicable Provisions
____________________ _____________________
UCI's operation of its Secs. 9, 10 and 11
business in pipeline and Sec. 2(b) of the
construction. GRAA
To the extent that the proposed transactions are considered
by the Commission to require authorization, approval or exemption
under any section of the Act or provision of the rules or regulations
other than those specifically set forth herein, request for such
authorization, approval or exemption is hereby made.
Item 4. Regulatory Approval
No consent or approval of any state commission or any
federal commission (other than the Securities and Exchange
PAGE 22 OF 25
Commission) is required with respect to the transactions proposed
herein.
Item 5. Procedure
The Commission is requested to issue an order permitting
this Application-Declaration, as amended, to become effective as soon
as practicable, in order that UCI may be in a position to continue to
commit to undertake construction projects in accordance with the
provisions of such Order.
National and UCI request that the Commission's order herein
be entered pursuant to the provisions of Rule 23. If a hearing is
ordered, National waives a recommended decision by a hearing officer
or other responsible officer of the Commission and consents that the
Division of Investment Management, Office of Public Utility
Regulation may assist in the preparation of the Commission's decision
and/or order and requests that the Commission's order become
effective upon issuance.
Each year, by May 15, and again within 15 days after the
filing of National's Annual Form U5S, UCI will file its individual
company balance sheet and income statement for the respective six and
twelve month periods. In addition to such financial statements, UCI
will submit a description in narrative format describing the
construction activities of UCI undertaken during such reporting
period.
PAGE 23 OF 25
Item 6. Exhibits and Financial Statements
The following exhibits and financial statements are filed as
part of this Application-Declaration:
(a) Exhibits:
E-1 Map showing location of System facilities
and major upstream pipelines.
(b) Financial Statements
S-1 Consolidating Balance Sheet of National Fuel
Gas Company (including Balance Sheet of UCI)
as of March 31, 1994.
S-2 Consolidating Income Statement of National
Fuel Gas Company (including Income Statement
of UCI) for the Twelve months ended
March 31, 1994.
There have been no material changes, not in the ordinary
course of business, since the date of these financial statements.
Item 7. Information as to Environmental Effects
The proposed transactions outlined herein concern a
description of the scope of activities authorized to be undertaken by
UCI and involve no major action which will significantly affect the
quality of the human environment.
No federal agency has prepared or is preparing an
environmental impact statement with respect to the transactions
proposed in this Application-Declaration.
SIGNATURES
Pursuant to the requirements of the Public Utility Holding
Company Act of 1935, the undersigned companies have duly caused this
PAGE 24 OF 25
Amendment to be signed on their behalf by the undersigned thereunto
duly authorized.
Dated: July 12, 1994
NATIONAL FUEL GAS COMPANY
By /s/ Philip C. Ackerman
Philip C. Ackerman
Senior Vice President
UTILITY CONSTRUCTORS, INC.
By /s/ Joseph P. Pawlowski
Joseph P. Pawlowski
Treasurer
PAGE 25 OF 25
APPENDIX
Exhibit E-1 referred to in Item 1 is a map showing the
location of the System's pipeline facilities and utility service
territory. It also shows the location of the pipelines that provide
supplies of natural gas to National's System.
This Exhibit E-1 is being submitted under cover of Form S-E.
<TABLE>
<CAPTION>
NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES EXHIBIT S-1
CONSOLIDATING BALANCE SHEET - ASSETS AS OF MARCH 31, 1994 FILE 70-7367
INCLUDES ADJUSTMENT FOR SENECA RESOURCES CORPORATION & EMPIRE EXPLORATION PAGE 1 OF 4
NATIONAL FUEL GAS
COMPANY DISTRIBUTION PENN-YORK SENECA EMPIRE
(PARENT) CORPORATION SUPPLY ENERGY RESOURCES LEIDY HUB, EXPLORATION,
(Inc. Unbilled)(Inc. Unbilled) CORPORATION CORPORATION CORPORATION INC. INC.
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
PROPERTY, PLANT & EQUIPMENT:
GAS UTILITIES $0 $1,004,099,114 $515,555,481 $109,459,252 $0 $0 $0
NON-UTILITIES $224,207 $80,137 $13,580 $0 $341,163,476 $3,208 $87,685,094
$224,207 $1,004,179,251 $515,569,061 $109,459,252 $341,163,476 $3,208 $87,685,094
LESS ACCUMULATED D, D & A $104,213 $238,618,275 $155,359,392 $37,262,472 $127,024,799 $3,208 $34,776,183
NET PROPERTY, PLANT & EQUIP $119,994 $765,560,976 $360,209,669 $72,196,780 $214,138,677 $0 $52,908,911
CURRENT ASSETS:
CASH $105,236 $9,413,800 $621,126 $85,170 $1,078,528 $21,605 $124,359
TEMPORARY CASH INVESTMENTS $7,047,283 $1,088 $0 $0 $0 $0 $0
NOTES RECEIVABLE-INTERCO $192,800,000 $0 $0 $0 $0 $0 $0
RESERVE FOR DOUBTFUL ACCOUNTS $0 ($9,180,410) $0 $0 ($35,152) $0 ($56,368)
ACCOUNTS RECEIVABLE-INTERCO $13,005,540 $14,070,498 $26,812,651 $253,010 $500,953 $0 $728,511
ACCOUNTS RECEIVABLE-CUSTOMERS $0 $174,429,339 $310,561 $714,477 $0 $0 $0
OTHER ACCOUNTS RECEIVABLE $7,778,302 $9,309,622 $5,075,590 $1,465 $8,210,166 $0 $2,139,804
UNBILLED UTILITY REVENUE $0 $54,179,745 $0 $0 $0 $0 $0
DIVIDENDS RECEIVABLE-INTERCO $11,848,976 $0 $0 $0 $0 $0 $0
MATERIALS & SUPPLIES-AVE. COS $0 $7,410,926 $11,829,804 $2,123,466 $50,869 $0 $319,572
GAS STORED UNDERGROUND $0 $1,489,826 $2,811,410 $0 $0 $0 $0
UNRECOVERED PURCH GAS COSTS $0 ($2,537,692) $5,531,284 $0 $0 $0 $0
PREPAYMENTS $312,399 $19,223,622 $4,154,715 $837,895 $724,161 $6,063 $0
NOTES RECEIVABLE $0 $9,819 $17,372 $0 $0 $0 $0
DEFERRED INCOME TAXES $0 $0 $0 $0 $0 $0 $0
TOTAL CURRENT ASSETS $232,897,736 $277,820,183 $57,164,513 $4,015,483 $10,529,525 $27,668 $3,255,878
OTHER ASSETS:
STOCK OF SUBSIDIARIES $720,449,533 $0 $0 $0 $0 $0 $0
NOTES OF SUBSIDIARIES $529,382,000 $0 $0 $0 $0 $0 $0
INVESTMENT IN ASSOCIATED CO $0 $0 $61,434 $0 $0 $0 $0
RECOVERABLE FUTURE TAXES $0 $98,453,136 $4,559,049 $1,143,961 $0 $0 $0
DEF CONTRACT REFORMATION $0 $14,493,709 ($99,982) $0 $0 $0 $0
UNAMORTIZED DEBT EXPENSE $4,042,181 $18,118,125 $3,265,594 $1,689,143 $0 $0 $0
OTHER REGULATORY ASSETS $0 $0 $0 $0 $0 $0 $0
DEFERRED CHARGES $669,923 $20,858,971 $16,044,850 $5,303,543 $307,891 $1,873 $530,999
OTHER ASSETS $303,129 $5,410,750 $3,857,069 $826,009 $1,031,976 $812,593 $81,424
NOTES RECEIVABLE $0 $0 $0 $0 $36,300 $0 $0
TOTAL OTHER ASSETS $1,254,846,766 $157,334,691 $27,688,014 $8,962,656 $1,376,167 $814,466 $612,423
TOTAL ASSETS $1,487,864,496 $1,200,715,850 $445,062,196 $85,174,919 $226,044,369 $842,134 $56,777,212
<PAGE>
<CAPTION>
NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES EXHIBIT S-1
CONSOLIDATING BALANCE SHEET - ASSETS AS OF MARCH 31, 1994 FILE 70-7367
INCLUDES ADJUSTMENT FOR SENECA RESOURCES CORPORATION & EMPIRE EXPLORATION PAGE 2 OF 4
HIGHLAND UTILITY DATA-TRACK NATIONAL
LAND & CONSTRUCTORS, ACCOUNT FUEL TOTAL BEFORE ELIMINATIONS NFGC & SUBS
MINERALS,INC. INC. SERVICES, INC. RESOURCES ELIMINATIONS (DR.) CR. CONSOLIDATED
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
PROPERTY, PLANT & EQUIPMENT:
GAS UTILITIES $0 $0 $0 $0 $1,629,113,847 $0 $1,629,113,847
NON-UTILITIES $2,692,356 $9,639,500 $31,021 $14,586 $441,547,165 $0 $441,547,165
$2,692,356 $9,639,500 $31,021 $14,586 $2,070,661,012 $0 $2,070,661,012
LESS ACCUMULATED D, D & A $826,411 $4,834,361 $964 $4,593 $598,814,871 ($26,950,156) $571,864,715
NET PROPERTY, PLANT & EQUIP $1,865,945 $4,805,139 $30,057 $9,993 $1,471,846,141 ($26,950,156)$1,498,796,297
CURRENT ASSETS:
CASH $363,065 $141,253 $49,489 $660,933 $12,664,564 $0 $12,664,564
TEMPORARY CASH INVESTMENTS $0 $0 $0 $0 $7,048,371 $0 $7,048,371
NOTES RECEIVABLE-INTERCO $1,700,000 $0 $500,000 $900,000 $195,900,000 $195,900,000 $0
RESERVE FOR DOUBTFUL ACCOUNTS $0 $0 $0 ($99,000) ($9,370,930) $0 ($9,370,930)
ACCOUNTS RECEIVABLE-INTERCO $79,189 $165,312 $34,249 $8,378 $55,658,291 $55,658,291 $0
ACCOUNTS RECEIVABLE-CUSTOMERS $412,113 $0 $0 $7,435,540 $183,302,030 $0 $183,302,030
OTHER ACCOUNTS RECEIVABLE $2,000 $2,493,533 $0 $0 $35,010,482 ($1,900,000) $36,910,482
UNBILLED UTILITY REVENUE $0 $0 $0 $0 $54,179,745 $0 $54,179,745
DIVIDENDS RECEIVABLE-INTERCO $0 $0 $0 $0 $11,848,976 $11,848,976 $0
MATERIALS & SUPPLIES-AVE. COS $284,727 $0 $0 $0 $22,019,364 $36,807 $21,982,557
GAS STORED UNDERGROUND $0 $0 $0 $0 $4,301,236 $0 $4,301,236
UNRECOVERED PURCH GAS COSTS $0 $0 $0 $0 $2,993,592 $0 $2,993,592
PREPAYMENTS $96,475 $106,671 $506 $16,106 $25,478,613 $2,050,294 $23,428,319
NOTES RECEIVABLE $0 $0 $0 $0 $27,191 $0 $27,191
DEFERRED INCOME TAXES $0 $0 $0 $0 $0 $0
TOTAL CURRENT ASSETS $2,937,569 $2,906,769 $584,244 $8,921,957 $601,061,525 $263,594,368 $337,467,157
OTHER ASSETS:
STOCK OF SUBSIDIARIES $0 $0 $0 $0 $720,449,533 $720,449,533 $0
NOTES OF SUBSIDIARIES $0 $0 $0 $0 $529,382,000 $529,382,000 $0
INVESTMENT IN ASSOCIATED CO $0 $0 $0 $0 $61,434 $61,434 $0
RECOVERABLE FUTURE TAXES $0 $0 $0 $0 $104,156,146 $0 $104,156,146
DEF CONTRACT REFORMATION $0 $0 $0 $0 $14,393,727 $0 $14,393,727
UNAMORTIZED DEBT EXPENSE $0 $0 $0 $0 $27,115,043 $0 $27,115,043
OTHER REGULATORY ASSETS $0 $0 $0 $0 $0 ($37,428,921) $37,428,921
DEFERRED CHARGES $0 $0 ($28) $54,099 $43,772,121 $37,767,411 $6,004,710
OTHER ASSETS $8,077 $636,659 $289 $323,807 $13,291,782 ($8,200,842) $21,492,624
NOTES RECEIVABLE $0 $2,310,686 $0 $0 $2,346,986 $0 $2,346,986
TOTAL OTHER ASSETS $8,077 $2,947,345 $261 $377,906 $1,454,968,772 $1,242,030,615 $212,938,157
TOTAL ASSETS $4,811,591 $10,659,253 $614,562 $9,309,856 $3,527,876,438 $1,478,674,827 $2,049,201,611
<PAGE>
<CAPTION>
NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES EXHIBIT S-1
CONSOLIDATING BALANCE SHEET - LIABILITIES AS OF MARCH 31, 1994 FILE 70-7367
INCLUDES ADJUSTMENT FOR SENECA RESOURCES CORPORATION & EMPIRE EXPLORATION PAGE 3 OF 4
NATIONAL FUEL GAS
COMPANY DISTRIBUTION PENN-YORK SENECA EMPIRE
(PARENT) CORPORATION SUPPLY ENERGY RESOURCES LEIDY HUB, EXPLORATION,
(Inc. Unbilled)(Inc.Unbilled) CORPORATION CORPORATION CORPORATION INC. INC.
<S> <C> <C> <C> <C> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
COMMON STOCK, $1 PAR VALUE $37,096,941
CAPITAL STOCK OF SUBSIDIARIES $59,170,600 $25,345,050 $29,332,377 $500,000 $4,000 $15,000
PAID-IN-CAPITAL $373,937,055 $121,668,184 $6,561,772 $0 $92,245,000 $1,038,500 $11,774,942
EARNINGS REINVESTED IN
THE BUSINESS $382,951,257 $231,309,677 $127,669,989 $2,521,032 ($22,550,790) ($456,971) $4,997,129
TOTAL COMMON STOCK EQUITY $793,985,253 $412,148,461 $159,576,811 $31,853,409 $70,194,210 $585,529 $16,787,071
LONG-TERM DEBT NET OF CURRENT
SINKING FUND REQUIREMENTS $478,417,000 $0 $0 $0 $0 $0 $0
NOTES PAYABLE-INTERCO. $0 $319,917,000 $119,465,000 $10,000,000 $80,000,000 $0 $0
TOTAL CAPITALIZATION $1,272,402,253 $732,065,461 $279,041,811 $41,853,409 $150,194,210 $585,529 $16,787,071
LIABILITIES:
CURRENT & ACCRUED LIABILITIES:
NOTES PAYABLE-BANKS & OTHERS $179,600,000 $0 $0 $0 $0 $0 $0
NOTES PAYABLE-INTERCOMPANY $3,100,000 $19,500,000 $81,700,000 $26,500,000 $34,900,000 $300,000 $24,300,000
SINKING FUND REQUIREMENTS $0 $0 $0 $0 $0 $0 $0
L/T DEBT DUE CURRENTLY $0 $0 $0 $0 $0 $0 $0
ACCOUNTS PAYABLE-OTHER $87,721 $58,183,583 $8,674,369 $82,152 $3,643,573 ($8,041) $278,211
SUPPLIER REFUNDS PAY.-CUSTOME $0 $16,026,275 $0 $0 $0 $0 $0
DIVIDENDS PAYABLE $14,229,387 $0 $0 $0 $0 $0 $0
ACCOUNTS PAYABLE-INTERCO $7,691,862 $28,188,000 $11,127,421 $3,250,146 ($136,897) $888 $76,006
DIVIDENDS PAYABLE-INTERCO $0 $7,468,000 $3,193,476 $1,187,500 $0 $0 $0
CUSTOMER DEPOSITS $0 $5,655,734 $0 $0 $0 $0 $0
RESERVE FOR GAS REPLACEMENT $0 $73,691,040 $0 $0 $0 $0 $0
ESTIMATED REVENUE REFUNDS $0 ($1) $9,308 $0 $0 $0
FEDERAL INCOME TAXES $75,788 $24,249,338 $238,741 $1,462,942 ($1,917,666) $12,434 $729,222
OTHER TAXES ($450,594) $11,873,923 $169,267 ($122,282) $112,894 ($3) $259,686
OTHER ACCRUALS $10,659,443 $2,482,850 $2,396,914 $115,560 $2,219,638 $0 $367,822
ACCRUED PENSION CONTRIBUTION $103,267 $8,547,472 $3,087,151 $179,374 $241,007 $0 $12,119
TOTAL CURRENT LIABILITIES $215,096,874 $255,866,215 $110,587,338 $32,664,700 $39,062,549 $305,278 $26,023,066
DEFERRED CREDITS:
REFUNDABLE TAXES $0 $23,686,203 $5,900,410 $2,398,009 $0 $0 $0
UNAMORTIZED INVEST TAX CREDIT $0 $13,942,797 $401,448 $56,392 $0 $0 $0
ACCUM DEFERRED INCOME TAXES ($198,012) $158,036,733 $43,647,600 $7,387,451 $33,737,729 ($48,673) $13,745,415
OTHER DEFERRED CREDITS $563,381 $17,118,441 $5,483,589 $814,958 $3,049,881 $0 $221,660
TOTAL DEFERRED CREDITS $365,369 $212,784,174 $55,433,047 $10,656,810 $36,787,610 ($48,673) $13,967,075
TOTAL CAPITALIZATION & LIABS $1,487,864,496 $1,200,715,850 $445,062,196 $85,174,919 $226,044,369 $842,134 $56,777,212
<PAGE>
<CAPTION>
NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES EXHIBIT S-1
CONSOLIDATING BALANCE SHEET - LIABILITIES AS OF MARCH 31, 1994 FILE 70-7367
INCLUDES ADJUSTMENT FOR SENECA RESOURCES CORPORATION & EMPIRE EXPLORATION PAGE 4 OF 4
HIGHLAND UTILITY DATA-TRACK NATIONAL
LAND & CONSTRUCTORS, , ACCOUNT FUEL TOTAL BEFORE ELIMINATIONS NFGC & SUBS
MINERALS,INC. INC. SERVICES, INC. RESOURCES ELIMINATIONS (DR.) CR. CONSOLIDATED
<S> <C> <50> <C> <C> <C> <C> <C>
CAPITALIZATION AND LIABILITIES
CAPITALIZATION:
COMMON STOCK, $1 PAR VALUE $37,096,941 $0 $37,096,941
CAPITAL STOCK OF SUBSIDIARIES $4,500 $1,000 $1,000 $10,000 $114,383,527 ($114,383,527) $0
PAID-IN-CAPITAL $445,500 $5,958,753 $499,000 $3,490,000 $617,618,706 ($243,681,651) $373,937,055
EARNINGS REINVESTED IN
THE BUSINESS $3,507,650 ($1,876,697) $80,393 $1,720,343 $729,873,012 ($346,921,755) $382,951,257
TOTAL COMMON STOCK EQUITY $3,957,650 $4,083,056 $580,393 $5,220,343 $1,498,972,186 ($704,986,933) $793,985,253
LONG-TERM DEBT NET OF CURRENT
SINKING FUND REQUIREMENTS $0 $0 $0 $0 $478,417,000 $0 $478,417,000
NOTES PAYABLE-INTERCO. $0 $0 $0 $0 $529,382,000 ($529,382,000) $0
TOTAL CAPITALIZATION $3,957,650 $4,083,056 $580,393 $5,220,343 $2,506,771,186(1,234,368,933)$1,272,402,253
LIABILITIES:
CURRENT & ACCRUED LIABILITIES:
NOTES PAYABLE-BANKS & OTHERS $0 $0 $0 $0 $179,600,000 $0 $179,600,000
NOTES PAYABLE-INTERCOMPANY $0 $5,600,000 $0 $0 $195,900,000 ($195,900,000) $0
SINKING FUND REQUIREMENTS $0 $0 $0 $0 $0 $0 $0
L/T DEBT DUE CURRENTLY $0 $0 $0 $0 $0 $0 $0
ACCOUNTS PAYABLE-OTHER $1,962 $840,554 $17,844 $2,127,970 $73,929,898 ($3,810,249) $70,119,649
SUPPLIER REFUNDS PAY.-CUSTOME $0 $0 $0 $0 $16,026,275 $0 $16,026,275
DIVIDENDS PAYABLE $0 $0 $0 $0 $14,229,387 $0 $14,229,387
ACCOUNTS PAYABLE-INTERCO $443,567 $19,607 $17,345 $642,972 $51,320,917 ($51,320,917) $0
DIVIDENDS PAYABLE-INTERCO $0 $0 $0 $0 $11,848,976 ($11,848,976) $0
CUSTOMER DEPOSITS $0 $0 $0 $0 $5,655,734 $0 $5,655,734
RESERVE FOR GAS REPLACEMENT $0 $0 $0 $0 $73,691,040 $0 $73,691,040
ESTIMATED REVENUE REFUNDS $0 $0 $0 $0 $9,307 $0 $9,307
FEDERAL INCOME TAXES $183,957 ($838,852) $2,788 $410,784 $24,609,476 ($2,572,218) $22,037,258
OTHER TAXES $118,352 ($59,773) ($2,458) $65,407 $11,964,419 $0 $11,964,419
OTHER ACCRUALS $8,695 $533,569 $0 $347,508 $19,131,999 $0 $19,131,999
ACCRUED PENSION CONTRIBUTION $0 $67,268 $0 $10,609 $12,248,267 $0 $12,248,267
TOTAL CURRENT LIABILITIES $756,533 $6,162,373 $35,519 $3,605,250 $690,165,695 ($265,452,360) $424,713,335
DEFERRED CREDITS:
REFUNDABLE TAXES $0 $0 $0 $0 $31,984,622 $0 $31,984,622
UNAMORTIZED INVEST TAX CREDIT $0 $0 $0 $0 $14,400,637 $0 $14,400,637
ACCUM DEFERRED INCOME TAXES $92,828 $394,376 ($263) $439,706 $257,234,890 $16,361,481 $273,596,371
OTHER DEFERRED CREDITS $4,580 $19,448 ($1,087) $44,557 $27,319,408 $4,784,985 $32,104,393
TOTAL DEFERRED CREDITS $97,408 $413,824 ($1,350) $484,263 $330,939,557 $21,146,466 $352,086,023
TOTAL CAPITALIZATION & LIABS $4,811,591 $10,659,253 $614,562 $9,309,856 $3,527,876,438(1,478,674,827)$2,049,201,611
</TABLE>
<TABLE>
<CAPTION>
FILE NO. 70-7367
EXHIBIT S-2
PAGE 1 OF 2
NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF INCOME FOR THE TWELVE MONTHS ENDED MARCH 31, 1994
INCLUDES ADJUSTMENT FOR SENECA RESOURCES CORPORATION & EMPIRE EXPLORATION
NATIONAL FUEL GAS
COMPANY DISTRIBUTION PENN-YORK SENECA EMPIRE
(PARENT) CORPORATION SUPPLY ENERGY RESOURCES LEIDY HUB, EXPLORATION,
(Inc. Unbilled)(Inc. Unbilled)) CORPORATION CORPORATIO CORPORATION INC. INC.
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING REVENUES:
GAS SALES ($18,739,218) $897,115,176 $111,618,632 $0 $0 $0 $724,981
OTHER OPERATING REVENUES $0 $38,824,316 $112,416,036 $38,345,944 $48,654,699 $0 $9,824,017
($18,739,218) $935,939,492 $224,034,668 $38,345,944 $48,654,699 $0 $10,548,998
OPERATING EXPENSES:
PURCHASED GAS $0 $479,295,225 $123,697,671 $0 $382,331 $0 $646,960
OPERATION EXPENSE $2,646,175 $214,307,871 $12,576,403 $22,898,640 $14,102,087 $500,262 $3,036,471
PROP, FRANCH & OTHER TAXES $899,542 $86,886,793 $9,504,819 $1,834,495 $1,489,004 $3,493 $237,652
DEPREC, DEPLETION & AMORT $6,000 $27,522,370 $14,493,285 $2,836,532 $18,444,662 $83 $3,565,083
MAINTENANCE $0 $19,985,813 $6,245,423 $804,358 $9,697 $0 $0
FEDERAL INCOME TAX ($6,056,783) $23,613,426 $2,642,093 $3,616,691 $398,139 $27,450 $1,120,385
STATE INCOME TAX $0 $2,386,076 $1,279,458 $1,828 $0 $0 $258,975
DEFERRED INCOME TAXES-NET ($49,140) $4,684,329 $15,281,775 ($835,150) $569,032 ($173,750) ($379,767)
INVESTMENT TAX CREDIT ADJ. $0 ($4,723) $0 $0 $0 $0 $0
($2,554,206) $858,677,180 $185,720,927 $31,157,394 $35,394,952 $357,538 $8,485,759
OPERATING INCOME (LOSS) ($16,185,012) $77,262,312 $38,313,741 $7,188,550 $13,259,747 ($357,538) $2,063,239
OTHER INCOME:
UNREMITTED EARNINGS OF SUBS $43,847,906 $0 $0 $0 $0 $0 $0
DIVIDENDS FROM SUBSIDIARIES $46,706,135 $0 $0 $0 $0 $0 $0
INTEREST - INTERCOMPANY $47,411,038 $26,954 $0 $0 $0 $0 $0
APPLIANCE & JOBBING $0 $6,264 $0 $0 $0 $0 $0
GAIN-PUR OF DEB SINKG FUNDS $0 $0 $0 $0 $0 $0 $0
MISCELLANEOUS $0 $25,534 $145,962 $0 $39,248 $92,291 $0
INVESTMENT TAX CREDIT $0 $663,302 $18,745 $3,867 $0 $0 $0
ALLOW FUNDS USED IN CONST $0 $54,578 $446,752 $6,300 $0 $0 $0
OTHER INTEREST $858,446 $248,895 $682,065 ($1,520) $48,820 $0 ($42)
$138,823,525 $1,025,527 $1,293,524 $8,647 $88,068 $92,291 ($42)
INCOME (LOSS) BEFORE INTEREST C $122,638,513 $78,287,839 $39,607,265 $7,197,197 $13,347,815 ($265,247) $2,063,197
INTEREST CHARGES:
INTEREST ON LONG-TERM DEBT $36,668,393 $0 $0 $0 $0 $0 $0
INTEREST - INTERCOMPANY $162,222 $27,814,796 $11,764,387 $1,547,416 $5,471,678 $10,361 $588,415
OTHER INTEREST $6,262,519 $3,499,428 $1,422,279 $186,606 $291,546 $0 $24,185
ALLOW BOR FUNDS USED CONST $0 ($52,779) ($57,648) ($1,987) $0 $0 $0
$43,093,134 $31,261,445 $13,129,018 $1,732,035 $5,763,224 $10,361 $612,600
INC/(LOSS) BEFORE CUMULTV EFFEC $79,545,379 $47,026,394 $26,478,247 $5,465,162 $7,584,591 ($275,608) $1,450,597
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING FOR INCOME TAXES $35,001 $0 $0 $0 $2,599,769 $0 $1,265,734
NET INC/(LOSS) AVAIL COM STOCK $79,580,380 $47,026,394 $26,478,247 $5,465,162 $10,184,360 ($275,608) $2,716,331
<PAGE>
<CAPTION>
FILE NO. 70-7367
EXHIBIT S-2
PAGE 2 OF 2
NATIONAL FUEL GAS COMPANY AND SUBSIDIARIES
CONSOLIDATING STATEMENT OF INCOME FOR THE TWELVE MONTHS ENDED MARCH 31, 1994
INCLUDES ADJUSTMENT FOR SENECA RESOURCES CORPORATION & EMPIRE EXPLORATION
HIGHLAND UTILITY DATA-TRACK NATIONAL
LAND & CONSTRUCTORS, ACCOUNT FUEL TOTAL BEFORE ELIMINATIONS NFGC & SUBS
MINERALS,INC. INC. SERVICES, INC. RESOURCES ELIMINATIONS (DR.) CR. CONSOLIDATED
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING REVENUES:
GAS SALES $0 $0 $0 $39,376,585 $1,030,096,156 ($101,044,188) $929,051,968
OTHER OPERATING REVENUES $7,056,867 $14,010,466 $362,284 $0 $269,494,629 ($80,320,596) $189,174,033
$7,056,867 $14,010,466 $362,284 $39,376,585 $1,299,590,785 ($181,364,784)$1,118,226,001
OPERATING EXPENSES:
PURCHASED GAS $0 $0 $0 $35,749,267 $639,771,454 $157,355,725 $482,415,729
OPERATION EXPENSE $5,768,759 $14,886,924 $354,382 $1,012,927 $292,090,901 $24,320,633 $267,770,268
PROP, FRANCH & OTHER TAXES $57,505 $40,609 $300 $263,944 $101,218,156 $0 $101,218,156
DEPREC, DEPLETION & AMORT $151,343 $1,419,163 $269 $1,896 $68,440,686 ($3,023,882) $71,464,568
MAINTENANCE $0 $0 $0 $0 $27,045,291 $0 $27,045,291
FEDERAL INCOME TAX $308,682 ($924,970) $9,704 $208,012 $24,962,829 $0 $24,962,829
STATE INCOME TAX $121,741 $316,456 $2,859 $78,396 $4,445,789 $0 $4,445,789
DEFERRED INCOME TAXES-NET $70,597 $14,154 ($2,253) $706,487 $19,886,314 $1,045,548 $18,840,766
INVESTMENT TAX CREDIT ADJ. $0 $0 $0 $0 ($4,723) $0 ($4,723)
$6,478,627 $15,752,336 $365,261 $38,020,929 $1,177,856,697 $179,698,024 $998,158,673
OPERATING INCOME (LOSS) $578,240 ($1,741,870) ($2,977) $1,355,656 $121,734,088 ($1,666,760) $120,067,328
OTHER INCOME:
UNREMITTED EARNINGS OF SUBS $0 $0 $0 $0 $43,847,906 ($43,847,906) ($0)
DIVIDENDS FROM SUBSIDIARIES $0 $0 $0 $0 $46,706,135 ($46,706,135) $0
INTEREST - INTERCOMPANY $58,951 $0 $16,229 $60,089 $47,573,261 ($47,573,261) $0
APPLIANCE & JOBBING $0 $0 $0 $0 $6,264 $0 $6,264
GAIN-PUR OF DEB SINKG FUNDS $0 $0 $0 $0 $0 $0 $0
MISCELLANEOUS $0 $155,847 $0 $0 $458,882 $0 $458,882
INVESTMENT TAX CREDIT $0 $0 $0 $0 $685,914 $0 $685,914
ALLOW FUNDS USED IN CONST $0 $0 $0 $0
OTHER INTEREST $18,766 $438,709 $0 $10,087 $507,630 $0 $507,630
$77,717 $594,556 $16,229 $70,176 $2,304,226 $0 $2,304,226
INCOME (LOSS) BEFORE INTEREST CHRG $655,957 ($1,147,314) $13,252 $1,425,832 $263,824,306 ($139,794,062) $124,030,244
INTEREST CHARGES:
INTEREST ON LONG-TERM DEBT $0 $0 $0 $0 $36,668,393 $0 $36,668,393
INTEREST - INTERCOMPANY $0 $213,893 $0 $93 $47,573,261 $47,573,261 $0
OTHER INTEREST $606 $5,204 $565 $18,516 $11,711,454 ($8,936) $11,720,390
ALLOW BOR FUNDS USED CONST $0 $0 $0 $0 ($112,414) $0 ($112,414)
$606 $219,097 $565 $18,609 $95,840,694 $47,564,325 $48,276,369
INC/(LOSS) BEFORE CUMULTV EFFECT $655,351 ($1,366,411) $12,687 $1,407,223 $167,983,612 ($92,229,737) ($75,753,875)
CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING FOR INCOME TAXES $51,377 ($124,792) ($124) ($460) $3,826,505 $0 $3,826,505
NET INC/(LOSS) AVAIL COM STOCK $706,728 ($1,491,203) $12,563 $1,406,763 $171,810,117 ($92,229,737) $79,580,380
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