UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
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 1-8353
NUI CORPORATION
(Exact name of registrant as specified in its charter)
New Jersey 22-1869941
(State of incorporation) (IRS employer identification no.)
550 Route 202-206, PO Box 760, Bedminster, New Jersey 07921-0760
(Address of principal executive offices, including zip code)
(908) 781-0500
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes X No
APPLICABLE ONLY TO CORPORATE ISSUERS:
The number of shares outstanding of each of the registrant's classes
of common stock, as of July 31, 1997: Common Stock, No Par Value:
11,382,679 shares outstanding.<PAGE>
<TABLE>
NUI Corporation and Subsidiaries
Consolidated Statement of Income (Unaudited)
(Dollars in thousands, except per share amounts)
<CAPTION>
Three Months Nine Months Twelve Months
Ended Ended Ended
June 30 June 30 June 30
1997 1996 1997 1996 1997 1996
<S> <C> <C> <C> <C> <C> <C>
Operating Margins
Operating revenues $125,175 $95,517 $481,120 $391,247 $559,372 $451,954
Less - Purchased gas and
fuel 83,575 55,695 309,910 220,355 357,678 252,060
Gross receipts and
franchise taxes 5,895 6,258 29,830 32,861 33,896 36,651
----- ------ ------ ------ ------- -------
35,705 33,564 141,380 138,031 167,798 163,243
------ ------ ------- ------- ------- -------
Other Operating Expenses
Operations and
maintenance 22,071 23,368 69,515 70,446 93,419 91,054
Depreciation and
amortization 6,466 5,382 17,742 16,324 22,707 21,144
Other taxes 1,966 2,156 6,934 6,470 8,594 8,261
Income taxes 128 (682) 11,680 10,872 8,615 8,706
------ ------ ------ ------ ------- -------
30,631 30,224 105,871 104,112 133,335 129,165
------ ------ ------- ------- ------- -------
Operating Income 5,074 3,340 35,509 33,919 34,463 34,078
Other Income and Expense,
Net 973 59 1,626 167 2,019 211
Interest Expense 4,682 4,402 13,684 14,188 18,034 19,210
----- ----- ------ ------ ------ -------
Net Income (Loss) $1,365 $(1,003) $23,451 $19,898 $18,448 $15,079
====== ======= ====== ====== ====== ======
Net Income Per Share of
Common Stock $0.12 $(0.10) $2.10 $2.11 $1.66 $1.61
===== ====== ===== ===== ===== =====
Dividends Per Share of
Common Stock $0.235 $0.225 $0.705 $0.675 $0.93 $0.90
====== ====== ====== ====== ==== ====
Weighted Average Number
of Shares of Common
Stock Outstanding 11,292,773 9,947,967 11,193,400 9,411,091 11,122,876 9,346,168
========== ========= ========== ========= ========== =========
</TABLE>
See the notes to the consolidated financial statements<PAGE>
<TABLE>
NUI Corporation and Subsidiaries
Consolidated Balance Sheet
(Dollars in thousands)
<CAPTION>
June 30, September 30,
1997 1996
(Unaudited) (*)
<S> <C> <C>
ASSETS
Utility Plant
Utility plant, at original cost $665,631 $631,194
Accumulated depreciation and
amortization (214,083) (200,456)
Unamortized plant acquisition
adjustments 32,683 33,572
------- -------
484,231 464,310
------- -------
Funds for Construction Held by
Trustee 32,506 44,652
------- -------
Investments in Marketable
Securities, at market 2,204 4,417
------ ------
Investment in TIC Enterprises, LLC 22,562 -
------ ------
Current Assets
Cash and cash equivalents 2,068 3,736
Accounts receivable (less
allowance for doubtful
accounts of $2,816 and
$2,288, respectively) 65,446 43,589
Fuel inventories, at average
cost 19,674 29,191
Unrecovered purchased gas costs 6,676 6,987
Prepayments and other 21,136 18,542
------- -------
115,000 102,045
------- -------
Other Assets
Regulatory assets 54,464 52,439
Deferred charges and other 9,895 9,799
------ ------
64,359 62,238
------- -------
$720,862 $677,662
======== ========
CAPITALIZATION AND LIABILITIES
Capitalization
Common shareholders' equity $200,122 $179,107
Preferred stock - -
Long-term debt 230,100 230,100
------- -------
430,222 409,207
------- -------
Capital Lease Obligations 9,454 10,503
------ ------
Current Liabilities
Current portion of long-term
debt and capital lease
obligations 1,439 2,546
Notes payable to banks 60,730 54,895
Accounts payable, customer
deposits and accrued liabilities 77,370 66,372
Federal income and other taxes 9,363 2,947
------- -------
148,902 126,760
------- -------
Deferred Credits and Other
Liabilities
Deferred Federal income taxes 60,605 59,328
Unamortized investment tax
credits 6,287 6,635
Environmental remediation reserve 33,981 33,981
Regulatory and other liabilities 31,411 31,248
------- -------
132,284 131,192
------- -------
$720,862 $677,662
======= =======
</TABLE>
*Derived from audited financial statements
See the notes to consolidated financial statements<PAGE>
<TABLE>
NUI Corporation and Subsidiaries
Consolidated Statement of Cash Flows (Unaudited)
(Dollars in thousands)
<CAPTION>
Nine Months Twelve Months
Ended Ended
June 30, June 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Operating Activities
Net income $23,451 $19,898 $18,448 $15,079
Adjustments to reconcile net
income to net cash provided
by operating activities
Depreciation and
amortization 18,340 16,398 24,257 21,521
Deferred Federal income
taxes 1,372 5,296 3,645 4,817
Amortization of deferred
investment tax credits (348) (351) (464) (467)
Other 1,145 4,704 1,058 5,612
Effect of changes in:
Accounts receivable, net (21,858) (20,963) (14,266) (16,554)
Fuel inventories 9,517 11,477 (3,522) 1,177
Accounts payable,
deposits and accruals 10,997 5,133 14,174 7,940
Over (under) recovered
purchased gas costs 312 (5,416) (6,154) (10,759)
Other (608) (3,361) (5,141) 1,926
------ ------ ------ ------
Net cash provided by
operating activities 42,320 32,815 32,035 30,292
------ ------ ------ ------
Financing Activities
Proceeds from sales of
common stock, net of
treasury stock purchased 4,030 31,568 3,833 31,324
Dividends to shareholders (7,886) (6,252) (10,334) (8,326)
Proceeds from issuance of
long-term debt - 39,000 - 39,000
Funds for construction held
by trustee, net 13,635 (31,232) 15,818 (31,079)
Repayments of long-term debt (950) (30,101) (987) (38,874)
Principal payments under
capital lease obligations (1,370) (1,439) (1,760) (1,919)
Net short-term borrowings
(repayments) 5,835 (10,155) 32,950 11,680
------ ------ ------ ------
Net cash provided by
(used in) financing
activities 13,294 (8,611) 39,520 1,806
------ ------ ------ ------
Investing Activities
Cash expenditures for
utility plant (35,923) (23,080) (49,896) (32,217)
Investment in TIC
Enterprises, LLC (22,000) - (22,000) -
Other 641 (482) (1,834) (134)
------ ------ ------ ------
Net cash used in investing
activities (57,282) (23,562) (73,730) (32,351)
------ ------ ------ ------
Net increase (decrease) in
cash and cash equivalents $(1,668) $ 642 $(2,175) $(253)
====== ===== ===== ====
Cash and Cash Equivalents
At beginning of period $ 3,736 $3,601 $ 4,243 $4,496
At end of period $ 2,068 $4,243 $ 2,068 $4,243
Supplemental Disclosures of
Cash Flows
Income taxes paid (refunds
received), net $3,909 $1,969 $ 4,552 $1,575
Interest paid $15,165 $15,691 $15,691 $19,584
</TABLE>
See the notes to the consolidated financial statements<PAGE>
NUI Corporation and Subsidiaries
Notes to the Consolidated Financial Statements
1. Basis of Presentation
The consolidated financial statements include all operating divisions
and subsidiaries of NUI Corporation (collectively referred to as "NUI"
or the "Company"). The Company distributes and sells natural gas and
related services in six states through its Northern and Southern
utility divisions. The Northern Division operates in New Jersey as
Elizabethtown Gas Company. The Southern Division operates in five
states as City Gas Company of Florida, North Carolina Gas Service,
Elkton Gas Service (Maryland), Valley Cities Gas Service
(Pennsylvania) and Waverly Gas Service (New York). In addition to gas
distribution operations, the Company provides retail gas sales and
related services through its NUI Energy, Inc.("Energy") subsidiary;
wholesale energy brokerage and related services through its NUI Energy
Brokers, Inc. ("Brokers") subsidiary; bill processing and related customer
services for utilities and municipalities through its Utility Business
Services, Inc. subsidiary; and sales and marketing outsourcing through its
equity interest in TIC Enterprises, LLC (see Note 3).
The consolidated financial statements contained herein have been
prepared without audit in accordance with the rules and regulations of
the Securities and Exchange Commission and reflect all adjustments
which, in the opinion of management, are necessary for a fair
statement of the results for interim periods. All adjustments made
were of a normal recurring nature. The preparation of financial
statements in accordance with generally accepted accounting principles
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those
estimates. The consolidated financial statements should be read in
conjunction with the consolidated financial statements and the notes
thereto that are included in the Company's Annual Report on Form 10-K
for the fiscal year ended September 30, 1996. Certain
reclassifications have been made to the prior year financial
statements to conform with the current year presentation.
The Company is subject to regulation as an operating utility by the
public utility commissions of the states in which it operates.
Because of the seasonal nature of gas utility operations, the results
for interim periods are not necessarily indicative of the results for
an entire year.
2. Common Shareholders' Equity
The components of common shareholders' equity were as follows (dollars
in thousands):
June 30, September 30,
1997 1996
Common stock, no par value $177,346 $171,968
Shares held in treasury (1,586) (1,564)
Retained earnings 25,751 10,117
Unrealized gain (loss) on
marketable securities (104) 389
Unearned employee compensation (1,284) (1,803)
------- -------
Total common shareholders' equity $200,122 $179,107
======= =======
3. Purchase of Interest in TIC Enterprises, LLC
On May 18, 1997, the Company closed on its acquisition of a 49%
interest in TIC Enterprises, LLC ("TIC"), a newly formed limited
liability company, for a purchase price of $22 million. The acquisition
was effective as of January 1, 1997 and is being accounted for under the
equity method. Under the terms of an LLC Interest Purchase Agreement
(the "Agreement"), the limited liability company will continue the
business previously conducted by TIC Enterprises, Inc. The agreement also
includes a provision for an additional incentive payment up to a maximum of
$5.2 million if TIC's fiscal 1997 earnings, before interest and taxes,
exceed $5 million. In addition, NUI has the option, during the period
beginning April 1, 2001 (subject to a one-year extension by the seller),
to purchase the remaining 51% interest in TIC.
TIC engages in the business of recruiting, training and managing sales
professionals and serving as sales and marketing representatives for
various businesses, including the Company's subsidiary, NUI Energy,
Inc. The excess of the purchase price over the Company's share of the
underlying equity in net assets of TIC is estimated on a preliminary basis
to be approximately $20 million and is being amortized on a straight
line basis over a 15 year period.
4. Derivative Financial Instruments
The Company engages in risk management activities to minimize the financial
and business risks associated with fluctuating market prices for the
purchase and sale of natural gas. The Company's unregulated subsidiaries
utilize futures contracts, forward contracts, options contracts and
swaps for the purpose of providing competitive energy supplies and
hedging its retail sales.
Brokers utilizes such financial instruments for trading purposes and
accordingly records realized and unrealized gains and losses by marking
to market its various financial and forward commitments. Margin
requirements for natural gas futures and options contracts are recorded
in accounts receivable. Realized and unrealized gains and loses are
recorded in the consolidated statement of income under purchased gas and
fuel. At June 30, 1997, Brokers' futures contracts consisted of 922
contracts long and 757 contracts short at prices ranging from $2.10 to
$2.50 per Mcf, none of which extend beyond January 1998, representing
16,790 MMcf of natural gas. Brokers' options contracts consisted of 40
contracts long and 228 contracts short with varying strike prices, none
of which extend beyond July 1998, representing 2,680 MMcf of natural gas.
Margin deposits with brokers was approximately $1 million at June 30,
1997. In addition, Brokers has forward sales and purchase commitments
associated with contracts totaling 26,000 MMcf of natural gas,
with terms extending through July 1998. Net realized and unrealized
gains for the nine-month period ended June 30, 1997 was $1.1 million.
During the nine-month period ended June 30, 1996, Brokers use of
derivative financial instruments was not significant.
Energy utilizes financial instruments to ensure adequate margins on the
sale of natural gas to its retail customers. Margin requirements for
natural gas futures contracts are recorded as accounts receivable.
Unrealized gains and losses on all futures and options contracts are
deferred in the consolidated balance sheet as either a current asset
or liability. Realized gains and losses on futures, forwards
and options contracts are included in the consolidated statement of
income under purchased gas and fuel when the underlying gas commodity
hedged is purchased and sold to its customers. The value of Energy's
futures contracts was not material at June 30, 1997.
The Company is exposed to credit risk in the event of nonperformance by
counterparties to its various contracts. The Company maintains credit
policies with regard to its counterparties that management believes
significantly minimize overall credit risk.
5. New Accounting Standard
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings per
Share" (SFAS 128). This statement supersedes APB Opinion No. 15,
"Earnings per Share" and basically simplifies the computation of
earnings per share. SFAS 128 will be effective for financial
statements for both interim and annual periods ending after
December 15, 1997. The Company does not expect the effect of adopting
SFAS No. 128 to have a material effect on its calculation of earnings
per share.
6. Contingencies
Environmental Matters. The Company is subject to federal and state
laws with respect to water, air quality, solid waste disposal and
employee health and safety matters, and to environmental regulations
issued by the United States Environmental Protection Agency (the
"EPA"), the New Jersey Department of Environmental Protection (the
"NJDEP") and other federal and state agencies.
The Company owns, or previously owned, certain properties on which
manufactured gas plants ("MGP") were operated by the Company or by
other parties in the past. Coal tar residues are present on the six
MGP sites located in the Northern Division. The Company has reported
the presence of the six MGP sites to the EPA, the NJDEP and the New
Jersey Board of Public Utilities ("NJBPU"). In 1991, the NJDEP issued
an Administrative Consent Order for an MGP site located at South
Street in Elizabeth, New Jersey, wherein the Company agreed to conduct
a remedial investigation and to design and implement a remediation
plan. In 1992 and 1993, the Company entered into a Memorandum of
Agreement with the NJDEP for each of the other five Northern Division
MGP sites. Pursuant to the terms and conditions of the Administrative
Consent Order and the Memoranda of Agreement, the Company is
conducting remedial activities at all six sites with oversight from
the NJDEP.
The Company owned ten former MGP facilities, only three of
which it currently owns. The former MGP sites are located in the
states of North Carolina, South Carolina, Pennsylvania, New York and
Maryland (the "Southern Division MGP sites"). The Company has joined
with other North Carolina utilities to form the North Carolina Manufactured
Gas Plant Group (the "MGP Group"). The MGP Group has entered into a
Memorandum of Understanding with the North Carolina Department of
Environment, Health and Natural Resources ("NCDEHNR") to develop a
uniform program and framework for the investigation and remediation of
MGP sites in North Carolina. The Memorandum of Understanding contemplates
that the actual investigation and remediation of specific sites will be
addressed pursuant to Administrative Consent Orders between the NCDEHNR and
the responsible parties. The NCDEHNR has recently sought the investigation
and remediation of sites owned by members of the MGP Group and has entered
into Administrative Consent Orders with respect to four such sites.
None of these four sites are currently or were previously owned by the
Company.
The Company, with the aid of environmental consultants, regularly
assesses the potential future costs associated with conducting
investigative activities at each of the Company's sites and
implementing appropriate remedial actions, as well as the likelihood
of whether such actions will be necessary. The Company records a
reserve if it is probable that a liability will be incurred and the
amount of the liability is reasonably estimable. Based on the
Company's most recent assessment, the Company has recorded a total
reserve for environmental investigation and remediation costs of
approximately $34 million, which the Company expects to expend during
the next twenty years. The reserve is net of approximately $4 million
which will be borne by a prior owner and operator of two of the
Northern Division sites in accordance with a cost sharing agreement.
Of this approximate $34 million reserve, approximately $30 million
relates to Northern Division MGP sites and approximately $4 million
relates to Southern Division MGP sites. However, the Company believes
that it is possible that costs associated with conducting
investigative activities and implementing remedial activities, if
necessary, with respect to all of its MGP sites may exceed the
approximately $34 million reserve by an amount that could range up to
$24 million and be incurred during a future period of time that may
range up to fifty years. Of this $24 million in additional possible
future expenditures, approximately $12 million relates to the Northern
Division MGP sites and approximately $12 million relates to the
Southern Division MGP sites. As compared with the approximately $34
million reserve discussed above, the Company believes that it is less
likely that this additional $24 million will be incurred and therefore
has not recorded it on its books.
The Company's prudently incurred remediation costs for the Northern
Division MGP sites have been authorized by the NJBPU to be recoverable
in rates. The Company also believes that a portion of such costs may
be recoverable from the Company's insurance carriers. The most recent
base rate order for the Northern Division permits the Company to
utilize full deferred accounting for expenditures related to MGP
sites. The order also provides for the recovery of $130,000 annually
of MGP related expenditures incurred prior to the rate order.
Accordingly, the Company has recorded a regulatory asset of
approximately $34 million as of June 30, 1997, reflecting the future
recovery of environmental remediation liabilities related to the
Northern Division MGP sites. The Company is able to recover
actual MGP expenses over a rolling seven year period through its MGP
Remediation Adjustment Clause ("RAC"). The NJBPU approved the
Company's initial RAC rate filing on April 2, 1997 at which time the
Company began recovery of approximately $3.1 million of costs, which
represents environmental costs incurred from inception through
June 30, 1996. On August 5, 1997, the Company made a filing with the
NJBPU to recover an additional $0.5 million in environmental costs
incurred from July 1, 1996 through June 30, 1997. An Order from the NJBPU
is expected in the Fall. With respect to costs associated with the
Southern Division MGP sites, the Company intends to pursue recovery from
ratepayers, former owners and operators, and insurance carriers,
although the Company is not able to express a belief as to whether any
or all of these recovery efforts will be successful. The Company is
working with the regulatory agencies to prudently manage its MGP costs
so as to mitigate the impact of such costs on both ratepayers and
shareholders.
Other. The Company is involved in various claims and litigation
incidental to its business. In the opinion of management, none of
these claims and litigation will have a material adverse effect on the
Company's results of operations or its financial condition.<PAGE>
<TABLE>
NUI Corporation and Subsidiaries
Summary Consolidated Operating Data
<CAPTION>
Three Months Ended Nine Months Ended Twelve Months Ended
June 30, June 30, June 30,
1997 1996 1997 1996 1997 1996
<S> <C> <C> <C> <C> <C> <C>
Operating Revenues
(Dollars in thousands)
Firm Sales:
Residential $41,064 $38,152 $177,769 $172,472 $199,172 $191,841
Commercial 20,623 21,346 92,849 94,298 105,995 107,933
Industrial 4,476 6,089 18,456 20,509 23,268 24,378
Interruptible Sales 11,224 14,323 41,946 38,267 54,329 56,194
Unregulated Sales 36,801 6,455 116,937 37,830 134,473 35,741
Transportation Services 7,097 5,828 21,996 17,651 27,432 22,122
Customer Service, Appliance
Leasing and Other 3,890 3,324 11,167 10,253 14,703 13,745
------ ------ ------ ------ ------ ------
$125,175 $95,517 $481,120 $391,247 $559,372 $451,954
======= ====== ======= ======= ======= =======
Gas Sold or Transported
(MMcf)
Firm Sales:
Residential 3,922 3,930 20,968 22,615 23,163 24,542
Commercial 2,445 2,865 12,617 14,669 14,523 16,472
Industrial 1,086 1,252 3,798 4,370 4,835 5,463
Interruptible Sales 3,508 3,975 10,942 10,873 14,701 17,313
Unregulated Sales 17,102 4,986 41,407 12,730 47,852 13,089
Transportation Services 6,645 5,982 21,461 18,329 28,183 24,158
------ ------ ------ ------ ------ ------
34,708 22,990 111,193 83,586 133,257 101,037
====== ====== ======= ====== ======= =======
Average Utility Customers
Served
Firm:
Residential 335,884 333,011 335,892 332,883 334,697 331,806
Commercial 24,386 24,582 24,430 24,657 24,314 24,599
Industrial 299 329 310 338 317 387
Interruptible 120 118 122 126 117 133
Transportation 1,546 707 1,381 601 1,253 516
------ ------ ------ ------ ------ ------
362,235 358,747 362,135 358,605 360,698 357,440
======= ======= ======= ======= ======= =======
Degree Days in New Jersey
Actual 656 582 4,899 5,297 4,945 5,336
Normal 538 538 4,936 4,936 4,978 4,978
Percentage variance from
normal 22% 8% 1% 7% 1% 7%
colder colder warmer colder warmer colder
Employees (period end) 1,121 1,075
Ratio of Earnings to Fixed
Charges (Twelve months only) 2.20 2.02
</TABLE>
NUI Corporation and Subsidiaries
Management's Discussion and Analysis of Financial Condition
and Results of Operations
The following discussion and analysis refers to all operating
divisions and subsidiaries of NUI Corporation (collectively referred
to as the "Company"). The Company distributes and sells natural gas
and related services in six states through its Northern and Southern
utility divisions. The Northern Division operates in New Jersey as
Elizabethtown Gas Company. The Southern Division operates in five
states as City Gas Company of Florida, North Carolina Gas Service,
Elkton Gas Service (Maryland), Valley Cities Gas Service
(Pennsylvania) and Waverly Gas Service (New York). In addition to gas
distribution operations, the Company provides retail gas sales and
related services through its NUI Energy, Inc. subsidiary; wholesale
energy brokerage and related services through its NUI Energy Brokers,
Inc. subsidiary; bill processing and related customer services for
utilities and municipalities through its Utility Business Services,
Inc. subsidiary; and sales and marketing outsourcing through its
equity interest in TIC Enterprises, LLC ("TIC") (see Note 3 of the Notes
to the Consolidated Financial Statements). Because of the seasonal
nature of gas utility operations, the results for interim periods are
not necessarily indicative of the results for an entire year.
Results of Operations
Three-Month Periods Ended June 30, 1997 and 1996
Net Income. Net income for the three-month period ended June 30, 1997
was $1.4 million, or $0.12 per share, as compared with a net loss of
$1.0 million, or $0.10 per share, for the three-month period ended
June 30, 1996. The increase in the current period was primarily the
result of higher operating margins, lower operations and maintenance
expenses and higher other income. This increase was partially offset
by higher depreciation and amortization expenses.
Net income per share in the current period was affected by the
increased number of outstanding shares of common stock over the prior
period, principally reflecting the Company's issuance of 1.8 million
additional shares in May 1996.
Operating Revenues and Operating Margins. The Company's operating
revenues include amounts billed for the cost of purchased gas pursuant
to purchased gas adjustment clauses. Such clauses enable the Company
to pass through to its customers, via periodic adjustments to
customers' bills, increased or decreased costs incurred by the Company
for purchased gas without affecting operating margins. Since the
Company's utility operations do not earn a profit on the gas commodity
element of its revenues, the Company's level of operating revenues is
not necessarily indicative of financial performance. The Company's
operating revenues increased by $29.7 million, or 31%, for the three-
month period ended June 30, 1997 as compared with the three-month
period ended June 30, 1996, principally due to an increase of
approximately $30 million in revenues generated by the Company's
unregulated operations. Operating revenues also increased due to a
base rate increase in the Company's Florida service territory (see
"Regulatory Matters), higher customer service and appliance leasing
revenues, and customer growth. These increases were partially offset
by lower revenues from interruptible and certain industrial customers
due to lower gas prices incurred during the current period.
The Company's operating margins increased by $2.1 million, or 6%, for
the three-month period ended June 30, 1997 as compared with the three-
month period ended June 30, 1996. The increase principally reflects
higher customer service and appliance leasing revenues, higher margins
on sales by the Company's unregulated operations, the effect of a base
rate increase in Florida and customer growth.
Other Operating Expenses. The Company's operations and maintenance
expenses decreased by approximately $1.3 million, or 6%, for the
three-month period ended June 30, 1997 as compared with the three-
month period ended June 30, 1996. The decrease was primarily the
result of lower pension and insurance expenses, and to the reversal of
certain reserves which management determined to be no longer required.
These decreases were partially offset by additional expenses related
to the growth in the Company's unregulated operations.
Depreciation and amortization expense increased by approximately $1.1
million for the three-month period ended June 30, 1997 as compared
with the three-month period ended June 30, 1996. The increase was
principally due to approximately $0.7 million of goodwill amortization
recorded for the period January 1, 1997 to June 30, 1997 related to
the acquisition of TIC (see Note 3 of the Notes to the Consolidated
Financial Statements), and higher depreciation expense as a result of
additional plant in service.
The increase in income taxes for the current period was principally
due to the effect of higher pre-tax income .
Other Income (Expense), Net. Other income and expense, net increased
approximately $0.9 million for the three-month period ended June 30,
1997 as compared with the three-month period ended June 30, 1996,
primarily due to after-tax earnings of approximately $0.8 million for
the Company's 49% equity interest in TIC for the period January 1,
1997 through June 30, 1997 (see Note 3 of the Notes to the
Consolidated Financial Statements).
Interest Expense. Interest expense increased by approximately $0.3
million for the three-month period ended June 30, 1997 as compared
with the three-month period ended June 30, 1996. The increase
principally reflects higher average short-term borrowings partially
offset by lower average short-term rates and lower average long-term
borrowings as a result of the repayment of amounts outstanding under
the Company's $30 million credit agreement in May 1996.
Nine-Month Periods Ended June 30, 1997 and 1996
Net Income. Net income for the nine-month period ended June 30, 1997
was $23.5 million, or $2.10 per share, as compared with net income of
$19.9 million, or $2.11 per share, for the nine-month period ended
June 30, 1996. The increase in the current period was primarily due to
higher operating margins, higher other income and lower operations,
maintenance and interest expenses. These increases were partially
offset by higher depreciation, amortization and other taxes expenses.
Net income per share in the current period was affected by the
increased number of outstanding shares of common stock over the prior
period, principally reflecting the Company's issuance of 1.8 million
additional shares in May 1996.
Operating Revenues and Operating Margins. The Company's operating
revenues increased by $89.9 million, or 23%, for the nine-month period
ended June 30, 1997 as compared with the nine-month period ended June
30, 1996. The increase was principally due to an increase of
approximately $79 million in revenues generated by the Company's
unregulated operations, the effect of purchased gas adjustment
clauses, a base rate increase in the Company's Florida service
territory, increased customer service and appliance leasing revenues,
and customer growth. These increases were partially offset by the
effect of warmer weather in the 1997 period in all of the Company's
service territories.
The Company's operating margins increased by $3.3 million, or 2%, for
the nine-month period ended June 30, 1997 as compared with the nine-
month period ended June 30, 1996. The increase principally reflects
higher margins on sales by the Company's unregulated operations,
including $1.1 million of net realized and unrealized gains recognized
on financial and forward commitments by NUI Energy Brokers, Inc. (see
Note 1 of the Notes to the Consolidated Financial Statements).
Operating margins were also increased due to the effect of the rate
case in Florida, higher customer service and appliance leasing
revenues, and customer growth. These increases were partially offset
by the effect of warmer weather in the 1997 period in all of the
Company's service territories, part of which was not fully recovered
from customers under weather normalization clauses, and lower amounts
billed to certain of the Company's Florida customers for its energy
conservation program. The Company is allowed to pass through to its
customers costs incurred for various energy conservation programs. The
Company does not earn a profit on these billings as operations expense
is charged or credited for any difference between amounts billed to
customers and amounts actually incurred. The Company has weather
normalization clauses in its New Jersey and North Carolina tariffs
which are designed to help stabilize the Company's results by
increasing amounts charged to customers when weather has been warmer
than normal and by decreasing amounts charged when weather has been
colder than normal. As a result of weather normalization clauses,
operating margins were approximately $0.7 million higher for the 1997
period than they would have been without such clauses. For the nine-
month period ended June 30, 1996, operating margins were $2.2 million
less than they would have been without such clauses.
Other Operating Expenses. Operations and maintenance expenses
decreased by approximately $0.9 million for the nine-month period
ended June 30, 1997 as compared with the nine-month period ended June
30, 1996. The decrease was primarily the result of the capitalization
of costs associated with the development and implementation of new
information technology, lower pension and insurance expenses, lower
expenses charged for the Company's energy conservation programs in
Florida and the reversal of certain reserves which management
determined to be no longer required. These decreases were partially
offset by expenses incurred to consolidate two of the Company's New
Jersey service facilities and additional expenses related to the
growth in the Company's unregulated operations.
Depreciation and amortization increased approximately $1.4 million
over the prior year period primarily due to approximately $0.7 million
of goodwill amortization recorded for the period January 1, 1997 to
June 30, 1997 related to the acquisition of an equity interest in TIC
(see Note 3 of the Notes to the Consolidated Financial Statements),
and higher depreciation expense as a result of additional plant in
service.
The increase in other taxes of approximately $0.5 million in the
current period was mainly due to higher payroll-related taxes as a
result of more employees.
Other Income and (Expense), Net. Other income and expense, net
increased approximately $1.5 million for the nine-month period ended
June 30, 1997 as compared with the nine-month period ended June 30,
1996. The increase was primarily due to after-tax earnings of
approximately $0.8 million for the Company's 49% equity interest in
TIC for the period January 1, 1997 through June 30, 1997 (see Note 3
of the Notes to the Consolidated Financial Statements), and to the
sale of certain marketable securities resulting in a realized gain of
$0.7 million.
Interest Expense. Interest expense decreased by approximately $0.5
million for the nine-month period ended June 30, 1997 as compared with
the nine-month period ended June 30, 1996. The decrease was primarily
due to lower average long-term borrowings as a result of the repayment
of amounts outstanding under the Company's $30 million credit
agreement in May 1996, partially offset by an increase in short-term
interest expense due to higher average borrowings.
Twelve-Month Periods Ended June 30, 1997 and 1996
Net Income. Net income for the twelve-month period ended June 30, 1997
was $18.4 million, or $1.66 per share, as compared with $15.1 million,
or $1.61 per share, for the twelve-month period ended June 30, 1996.
The increase in the current period was primarily due to higher
operating margins, higher other income and lower interest expense.
These increases were partially offset by higher operations and
maintenance, depreciation and other taxes expenses.
Net income per share in the current period was affected by the
increased number of outstanding shares of common stock over the prior
period, principally reflecting the Company's issuance of 1.8 million
additional shares in May 1996.
Operating Revenues and Operating Margins. The Company's operating
revenues for the twelve-month period ended June 30, 1997 increased
approximately $107.4 million, or 24%, as compared with the twelve-
month period ended June 30, 1996. The increase was primarily due to an
increase in sales by the Company's unregulated operations of
approximately $98 million, the effects of purchased gas adjustment
clauses, increased customer service and appliance leasing revenues, a
base rate increase in Florida and customer growth. These increases
were partially offset by warmer weather in the current period in all
of the Company's service territories.
The Company's operating margins increased by $4.6 million, or 3%, for
the twelve-month period ended June 30, 1997 as compared with the
twelve-month period ended June 30, 1996. The increase was principally
the result of higher margins on sales by the Company's unregulated
operations, higher customer service and appliance leasing revenues,
the base rate increase in Florida and increases in the number of
customers served. As a result of weather normalization clauses,
operating margins were approximately $0.7 million more in the 1997
period than they would have been without such clauses. For the twelve-
month period ended June 30, 1996, operating margins were $2.2 million
less than they would have been without such clauses.
Other Operating Expenses. Operations and maintenance expenses
increased approximately $2.4 million, or 3%, for the twelve-month
period ended June 30, 1997 as compared with the twelve-month period
ended June 30, 1996. The increase was primarily due to additional
expenses related to the growth of the Company's unregulated operations,
and expenses incurred to consolidate two of the Company's New Jersey
service facilities. These increases were partially offset by the
capitalization of software development costs, lower pension and
insurance costs, and the reversal of certain reserves which management
determined to be no longer required.
Depreciation and amortization expense increased approximately $1.6
million over the prior year period primarily due to approximately $0.7
million of goodwill amortization recorded for the period January 1,
1997 to June 30, 1997 related to the acquisition of an equity interest
in TIC (see Note 3 of the Notes to the Consolidated Financial
Statements), and higher depreciation expense as a result of additional
plant in service.
Other Income and Expense, Net. Other income and expense, net
increased approximately $1.8 million primarily due to after-tax
earnings of approximately $0.8 million for the Company's 49% equity
interest in TIC for the period January 1, 1997 through June 30, 1997
(see Note 3 of the Notes to the Consolidated Financial Statements),
and to the sale of certain marketable securities resulting in a
realized gain of $0.7 million.
Interest Expense. Interest expense decreased by $1.2 million, or 6%,
for the 1997 period as compared with the 1996 period primarily due to
lower levels of outstanding borrowings.
Regulatory Matters
On August 12, 1997, the Northern Division filed a proposed revision to
its weather normalization clause with the NJBPU to reflect an increase
in the level of normal degree days used to determine margin revenue
differences associated with variations between the actual degree
days experienced in the months of October through April and the degree
days that underlie the Company's base rates. The revised normal
degree days are intended to adjust for a bias in historical weather
data created by the National Oceanic and Atmospheric Administration's
installation of a new device to measure the temperature known as the
automatic surface observing system. An Order is expected later in the
Fall of 1997. The Company will file a petition shortly to recover
additional margin revenues associated with this revision.
On July 31, 1997, the Northern Division filed a proposal with the
NJBPU to increase its annual purchased gas adjustment revenues by
approximately $8 million and change the way it passes along gas supply
costs to its different classes of customers. The filing proposes to
collect the commodity component of purchased gas and the fixed costs
the Company incurs on behalf of its customers to supply gas service
separately. The filing also includes a request to incorporate a
performance based mechanism whereby Northern Division customers and
the Company would benefit from the Company's ability to secure gas at
rates more favorable than a market index benchmark. The proposed
mechanism would provide an 80/20 sharing, with Northern Division
customers receiving the greater percentage of risk and opportunity on
the difference between a monthly market benchmark and the actual cost
of purchased gas. Action by the NJBPU on the Company's proposal is
expected in the Fall of 1997.
On May 13, 1997, the New Jersey Board of Public Utilities (the
"NJBPU") approved an order (replacing an interim order dated December
4, 1996) authorizing the Northern Division to increase its annual
purchased gas adjustment revenues by approximately $22 million. The
increase was effective in December 1996 and reflects higher gas prices
incurred in the current year.
On October 29, 1996, the Florida Public Service Commission (the
"FPSC") voted to authorize the Company to increase its base rates in
Florida by $3.75 million annually. The rate increase reflects a rate
base amounting to $91.9 million, reflecting the addition of
investments in system improvements and expansion projects. Under the
approval, the allowed return on equity is 11.3% with an overall after-
tax rate of return of 7.9%. The Company had been granted interim rate
relief of $2.2 million effective in September 1996. The permanent rate
increase, which was effective in December 1996, includes the interim
adjustment.
Financing Activities and Resources
The Company had net cash provided by operating activities of $42.3
million for the nine-month period ended June 30, 1997 as compared with
$32.8 million for the nine-month period ended June 30, 1996. For the
twelve-month period ended June 30, 1997, the Company had net cash
provided by operating activities of $32.0 million as compared with
$30.3 million for the twelve-month period ended June 30, 1996. The
increases in the 1997 periods as compared with the 1996 periods were
primarily due to additional cash collected resulting in a lower under-
collection of gas costs through the Company's purchased gas adjustment
clauses and higher accounts payable due to increased purchases by the
Company's unregulated operations.
Because the Company's business is highly seasonal, short-term debt is
used to meet seasonal working capital requirements. The Company also
borrows under its bank lines of credit to finance portions of its
capital expenditures, pending refinancing through the issuance of
equity or long-term indebtedness at a later date depending upon
prevailing market conditions.
Short-Term Debt. The weighted average daily amounts outstanding of
notes payable to banks and the weighted average interest rates on
those amounts were $64.4 million at 5.3% for the nine-month period
ended June 30, 1997 and $40.7 million at 5.8% for the nine-month
period ended June 30, 1996. The weighted average daily amounts of
notes payable to banks increased principally due to the under-
collection of gas through the Company's purchased gas adjustment
clauses as a result of significantly higher gas prices incurred,
borrowings to finance the Company's acquisition of a 49% interest in
TIC and additional borrowings to finance construction expenditures. At
June 30, 1997, the Company had outstanding notes payable to banks
amounting to $60.7 million and available unused lines of credit
amounting to $90 million.
Long-Term Debt and Funds for Construction Held by Trustee. In November
1994, the Company filed a shelf registration statement with the
Securities and Exchange Commission for an aggregate of up to $100
million of debt and equity securities. As of June 30, 1997, the
Company has issued $70 million of Medium-Term Notes subject to the
shelf registration statement. While the Company has no present
intention to issue additional securities subject to the shelf
registration, such securities may be issued from time to time,
depending upon the Company's needs and prevailing market conditions.
On July 9, 1997, the Company issued $54.6 million of tax exempt Gas
Facilities Revenue Refunding Bonds at an interest rate of 5.7%. The
bonds mature on June 1, 2032 and will be used to refinance previously
issued Gas Facilities Revenue Bonds in the aggregate principal amounts
and rates of $46.2 million at 6.75% and $8.4 million at 6.625%.
The proceeds from the refunding bonds were invested in temporary cash
investments and will be held in trust until the old bonds are called on
October 1, 1997.
The Company deposits in trust the unexpended portion of the net
proceeds from its Gas Facilities Revenue Bonds until drawn upon for
eligible expenditures. As of June 30, 1997, the total unexpended
portions of all of the Company's Gas Facilities Revenue Bonds were
approximately $29 million and are classified on the Company's
consolidated balance sheet, including interest earned thereon, as
funds for construction held by trustee.
Common Stock. The Company periodically issues shares of common stock
in connection with NUI Direct, the Company's dividend reinvestment and
stock purchase plan, and various employee benefit plans. The proceeds
from such issuances amounted to approximately $4 million and $0.2
million during the nine-month periods ended June 30, 1997 and 1996,
respectively, and were used primarily to reduce outstanding short-term
debt. Under the terms of these plans, the Company may periodically
change the method of purchasing shares from open market purchases to
purchases directly from the Company, or vice versa.
The Company anticipates issuing no more than 2 million additional
shares of common stock in the Fall of 1997 for the purpose of
refinancing short-term debt incurred to finance its acquisition of a
49% interest in TIC and for general corporate purposes.
Dividends. On October 29, 1996, the Company increased its quarterly
dividend to $0.235 per share of common stock. The previous quarterly
rate was $0.225 per share of common stock.
The Company's long-term debt agreements include, among other things,
restrictions as to the payment of cash dividends. Under the most
restrictive of these provisions, the Company is permitted to pay
approximately $41 million of cash dividends at June 30, 1997.
Capital Expenditures and Commitments
Capital expenditures, which consist primarily of expenditures to
expand and upgrade the Company's gas distribution systems, were $35.9
million for the nine-month period ended June 30, 1997 as compared with
$23.1 million for the nine-month period ended June 30, 1996. Capital
expenditures are expected to be approximately $54 million for all of
fiscal 1997, as compared with a total of $37.1 million in fiscal 1996.
The increase over the 1996 periods was primarily the result of
planned capital investment related to providing gas or transportation
service to new customers, which is mainly occurring in the Company's
Southern Division, and to the Company's investment in new information
technology designed to enhance productivity in the long term.
The Company owns or previously owned six former manufactured gas plant
("MGP") sites in the Northern Division and ten MGP sites in the
Southern Division. The Company, with the aid of environmental
consultants, regularly assesses the potential future costs associated
with conducting remedial actions, as well as the likelihood of whether
such actions will be necessary. The Company records a reserve if it is
probable that a liability will be incurred and the amount of the
liability is reasonably estimable. Based on the Company's most recent
assessment, the Company has recorded a total reserve for environmental
investigation and remediation costs of approximately $34 million,
which the Company expects it will expend in the next twenty years to
remediate the Company's MGP sites. Of this reserve, approximately $30
million relates to Northern Division MGP sites and approximately $4
million relates to Southern Division MGP sites. However, the Company
believes that it is possible that costs associated with conducting
investigative activities and implementing remedial actions, if
necessary, with respect to all of its MGP sites may exceed the
approximately $34 million reserve by an amount that could range up to
$24 million and be incurred during a future period of time that may
range up to fifty years. Of this $24 million in possible future
expenditures, approximately $12 million relates to the Northern
Division MGP sites and approximately $12 million relates to the
Southern Division MGP sites. As compared with the approximately $34
million reserve discussed above, the Company believes that it is less
likely that this additional $24 million will be incurred and therefore
has not recorded it on its books. The Company believes that all costs
associated with the Northern Division MGP sites will be recoverable in
rates or from insurance carriers. The Company is able to recover
actual MGP expenses over a rolling seven-year period through its MGP
Remediation Adjustment Clause ("RAC"). The NJBPU approved the
Company's initial RAC rate filing on April 2, 1997 at which time the
Company began recovery of approximately $3.1 million of costs, which
represents environmental costs incurred from inception through June
30, 1996. On August 5, 1997, the Company made a filing with the NJBPU
to recover an additional $0.5 million in environmental costs incurred
from July 1, 1996 through June 30, 1997. An Order from the NJBPU is
expected in the Fall. With respect to costs which may be
associated with the Southern Division MGP sites, the Company intends
to pursue recovery from ratepayers, former owners and operators of the
sites and from insurance carriers. However, the Company is not able at
this time to express a belief as to whether any or all of these
recovery efforts related to the Southern Division MGP sites will
ultimately be successful. For a further discussion of environmental
matters, see Note 6 of the Notes to the Consolidated Financial
Statements.
Certain of the Company's long-term contracts for the supply, storage
and delivery of natural gas include fixed charges that amount to
approximately $75 million annually. The Company currently recovers,
and expects to continue to recover, such fixed charges through its
purchased gas adjustment clauses. The Company also is committed to
purchase, at market-related prices, minimum quantities of gas that, in
the aggregate, are approximately 10 billion cubic feet per year or to
pay certain costs in the event the minimum quantities are not taken.
The Company expects that minimum demand on its systems for the
duration of these contracts will continue to exceed these minimum
purchase obligations.
The implementation of the Federal Energy Regulatory Commission's
("FERC") Order No. 636 required the restructuring of the Company's
contracts with certain pipeline companies that together supply less
than one-third of the Company's total firm gas supply. Under Order No.
636 the pipeline companies are passing through to their customers
transition costs associated with mandated restructuring, such as costs
resulting from buying out unmarketable gas purchase contracts. All of
such costs have been authorized for recovery through the Company's
purchased gas adjustment clauses, including such costs incurred by the
Company's Pennsylvania operations. On April 24, 1997 the Company
received approval from the Pennsylvania Public Utilities Commission to
recover FERC Order 636 costs effective May 1, 1997. The Company
currently estimates that its remaining Order No. 636 transition
obligation will be approximately $6 million, which it expects to also
recover through the Company's purchased gas adjustment clauses as
these costs are incurred. This transition obligation is subject to
possible future FERC actions based upon filings by the Company's
pipeline suppliers.
The Company prepaid approximately $1 million of long-term debt,
without penalty, associated with its Employee Stock Ownership Plan in
January 1997. The Company will be prepaying $54.6 million of its Gas
Facilities Revenue Bonds in October 1997 with proceeds received from a
new bond issuance (see "Financing Activities and Resources- Long-Term
Debt and Funds for Construction Held by Trustee"). No other long-term
debt is scheduled to be repaid over the next five years.
Purchase of Interest in TIC Enterprises, LLC
On May 18, 1997, the Company closed on its acquisition of a 49%
interest in TIC Enterprises, LLC, a newly formed limited liability
company, for a purchase price of $22 million. The acquisition was
effective as of January 1, 1997 and is being accounted for under the
equity method. Under the terms of an LLC Interest Purchase Agreement
(the "Agreement"), the limited liability company will continue the
business previously conducted by TIC Enterprises, Inc. The agreement
also includes a provision for an additional incentive payment up to a
maximum of $5.2 million if TIC's fiscal 1997 earnings, before interest
and taxes, exceed $5 million. In addition, NUI has the option, during the
period beginning April 1, 2001 (subject to a one-year extension by the
seller), to purchase the remaining 51% interest in TIC.
TIC engages in the business of recruiting, training and managing sales
professionals and serving as sales and marketing representatives for
various businesses, including the Company's subsidiary, NUI Energy,
Inc. The excess of the purchase price over the Company's share of the
underlying equity in net assets of TIC is estimated on a preliminary
basis to be approximately $20 million and is being amortized on a straight
line basis over a 15 year period.
Other Matters
NUI Environmental Group, Inc., a wholly-owned subsidiary of the Company
("NUI Environmental"), was formed in 1996 to develop strategies for reducing
the accumulation of sediment in the New Jersey/New York harbor and
improving accessibility to the harbor to commercial shipping traffic.
NUI Environmental has entered into a Memorandum of Understanding with the
United States Department of Energy/Brookhaven National Laboratories to
develop sediment processing and decontamination technologies.
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
Exhibit
No. Description of Exhibit Reference
12 Computation of Consolidated
Ratio of Earnings to Fixed
Charges Filed herewith
27 Financial Data Schedule Filed herewith
(b) Reports on Form 8-K
None
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.
NUI CORPORATION
JOHN KEAN, JR.
August 14, 1997 President and Chief
Executive Officer
STEPHEN M. LIASKOS
August 14, 1997 Vice President and
Controller
(Principal Accounting
Officer)<PAGE>
EXHIBIT 12
NUI CORPORATION AND SUBSIDIARIES
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
FOR THE TWELVE MONTHS ENDED JUNE 30, 1997 AND 1996
(000's)
1997 1996
Income from continuing
operations before income taxes $28,150 $23,969
Add:
Interest element of rentals
charged to income (a) 3,206 3,148
Interest expense 20,036 20,137
------ ------
Earnings as defined $51,392 $47,254
====== ======
Interest expense $20,036 $20,137
Capitalized interest 135 100
Interest element of rentals
charged to income(a) 3,206 3,148
------ ------
Fixed charges as defined $23,377 $23,385
====== ======
CONSOLIDATED RATIO OF EARNINGS
TO FIXED CHARGES 2.20 2.02
---- ----
(a) Includes the interest element of rentals where
determinable plus 1/3 of rental expense where no readily
defined interest element can be determined.<PAGE>
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<ARTICLE> UT
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> JUN-30-1997
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 484,231
<OTHER-PROPERTY-AND-INVEST> 57,272
<TOTAL-CURRENT-ASSETS> 115,000
<TOTAL-DEFERRED-CHARGES> 64,359
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 720,862
<COMMON> 0
<CAPITAL-SURPLUS-PAID-IN> 177,346
<RETAINED-EARNINGS> 25,751
<TOTAL-COMMON-STOCKHOLDERS-EQ> 200,122
0
0
<LONG-TERM-DEBT-NET> 230,100
<SHORT-TERM-NOTES> 60,730
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 0
0
<CAPITAL-LEASE-OBLIGATIONS> 9,454
<LEASES-CURRENT> 1,439
<OTHER-ITEMS-CAPITAL-AND-LIAB> 219,017
<TOT-CAPITALIZATION-AND-LIAB> 720,862
<GROSS-OPERATING-REVENUE> 125,175
<INCOME-TAX-EXPENSE> 225
<OTHER-OPERATING-EXPENSES> 119,876
<TOTAL-OPERATING-EXPENSES> 120,101
<OPERATING-INCOME-LOSS> 5,074
<OTHER-INCOME-NET> 973
<INCOME-BEFORE-INTEREST-EXPEN> 6,047
<TOTAL-INTEREST-EXPENSE> 4,682
<NET-INCOME> 1,365
0
<EARNINGS-AVAILABLE-FOR-COMM> 1,365
<COMMON-STOCK-DIVIDENDS> 2,636
<TOTAL-INTEREST-ON-BONDS> 1,958
<CASH-FLOW-OPERATIONS> 43,274
<EPS-PRIMARY> 0.12
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