SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
March 31, 1995
For the quarterly period ended. . . . . . . .. . . . . . . . . .
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from. . . . . . . .to. . . . . . . . .
1-3103-2
Commission file number. . . . . . . . . . . .. . . . . . . . . .
New York State Electric & Gas Corporation
. . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . .
(Exact name of registrant as specified in its charter)
New York 15-0398550
. . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . .
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P.O. Box 3287, Ithaca, New York 14852-3287
. . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . .
(Address of principal executive offices) (Zip Code)
607 347-4131
Registrant's telephone number, including area code . . . . . . .
N/A
. . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . .
Former name, former address and former fiscal year, if changed
since last report.
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [x] No [ ]
The number of shares of common stock (par value $6.66 2/3
per share) outstanding as of April 30, 1995 was 71,502,827.<PAGE>
TABLE OF CONTENTS
PART I
Page
Item 1. Financial Statements . . . . . . . . . . . . . . 1
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
(a) Liquidity and Capital Resources . . . . . 6
(b) Results of Operations . . . . . . . . . . 11
PART II
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits. . . . . . . . . . . . . . . . . 13
(b) Report on Form 8-K. . . . . . . . . . . . 13
Signature . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Exhibit Index . . . . . . . . . . . . . . . . . . . . . . . . 15
<PAGE>
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
New York State Electric & Gas Corporation
Consolidated Statements of Income - (Unaudited)
(Thousands, except per share amounts)
Periods Ended March 31 Three Months
1995 1994
Operating Revenues
Electric . . . . . . . . . . . . . . . . $450,001 $424,520
Natural gas. . . . . . . . . . . . . . . 121,909 140,647
---------- ----------
Total Operating Revenues . . . . . . 571,910 565,167
---------- ----------
Operating Expenses
Fuel used in electric generation . . . . 63,505 67,644
Electricity purchased. . . . . . . . . . 79,662 45,451
Natural gas purchased. . . . . . . . . . 67,351 80,282
Other operating expenses . . . . . . . . 78,362 75,994
Maintenance. . . . . . . . . . . . . . . 23,954 24,442
Depreciation and amortization. . . . . . 46,026 43,420
Federal income taxes . . . . . . . . . . 46,567 48,674
Other taxes. . . . . . . . . . . . . . . 55,727 59,270
---------- ----------
Total Operating Expenses. . . . . . . 461,154 445,177
---------- ----------
Operating Income. . . . . . . . . . . . . 110,756 119,990
Other Income and Deductions . . . . . . . (1,372) (25)
---------- ----------
Income Before Interest Charges. . . . . . 109,384 119,965
---------- ----------
Interest Charges
Interest on long-term debt . . . . . . . 29,585 33,132
Other interest . . . . . . . . . . . . . 4,604 2,804
Allowance for borrowed funds used
during construction . . . . . . . . (389) (664)
---------- ----------
Interest Charges, Net. . . . . . . . . 33,800 35,272
---------- ----------
Net Income. . . . . . . . . . . . . . . . 75,584 84,693
Preferred Stock Dividends . . . . . . . . 4,759 4,859
---------- ----------
Earnings Available for Common Stock . . . $70,825 $79,834
========== ==========
Earnings Per Share. . . . . . . . . . . . $.99 $1.13
Dividends Per Share . . . . . . . . . . . $.35 $.55
Average Shares Outstanding. . . . . . . . 71,503 70,801
The note on page 6 is an integral part of the financial statements.<PAGE>
Item 1. Financial Statements (Cont'd)
New York State Electric & Gas Corporation
Consolidated Balance Sheets - (Unaudited)
(Thousands)
March 31, Dec. 31,
1995 1994
Assets
Utility Plant, at Original Cost
Electric . . . . . . . . . . . . . . . . . . . . . . .$4,994,910 $4,916,960
Natural gas. . . . . . . . . . . . . . . . . . . . . . 419,988 414,929
Common . . . . . . . . . . . . . . . . . . . . . . . . 138,436 143,366
---------- ----------
. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,553,334 5,475,255
Less accumulated depreciation . . . . . . . . . . . . . 1,681,455 1,642,653
---------- ----------
Net Utility Plant in Service . . . . . . . . . . . . 3,871,879 3,832,602
Construction work in progress . . . . . . . . . . . . . 103,504 154,723
---------- ----------
Total Utility Plant. . . . . . . . . . . . . . . . . 3,975,383 3,987,325
Other Property and Investments, Net . . . . . . . . . . 103,194 103,920
Current Assets
Cash and cash equivalents. . . . . . . . . . . . . . . 11,439 22,322
Special deposits . . . . . . . . . . . . . . . . . . . 5,370 7,591
Accounts receivable, net . . . . . . . . . . . . . . . 166,576 155,665
Fuel, at average cost. . . . . . . . . . . . . . . . . 27,235 49,934
Materials and supplies, at average cost. . . . . . . . 48,460 47,843
Prepayments. . . . . . . . . . . . . . . . . . . . . . 49,081 30,441
Accumulated deferred federal income
tax benefits, net . . . . . . . . . . . . . . . . . 17,392 11,457
---------- ----------
Total Current Assets. . . . . . . . . . . . . . . . 325,553 325,253
Deferred Charges
Unfunded future federal income taxes . . . . . . . . . 362,224 363,151
Unamortized debt expense . . . . . . . . . . . . . . . 114,136 114,444
Demand-side management program costs . . . . . . . . . 72,362 72,849
Other. . . . . . . . . . . . . . . . . . . . . . . . . 234,799 255,963
---------- ----------
Total Deferred Charges. . . . . . . . . . . . . . . 783,521 806,407
---------- ----------
Total Assets. . . . . . . . . . . . . . . . . . . .$5,187,651 $5,222,905
========== ==========
The note on page 6 is an integral part of the financial statements.
<PAGE>
Item 1. Financial Statements (Cont'd)
New York State Electric & Gas Corporation
Consolidated Balance Sheets - (Unaudited)
(Thousands)
March 31, Dec. 31,
1995 1994
Capitalization and Liabilities
Capitalization
Common stock equity
Common stock . . . . . . . . . . . . . . . . . . $476,686 $476,686
Capital in excess of par value. . . . . . . . . . 841,830 841,624
Retained earnings . . . . . . . . . . . . . . . . 392,346 346,547
---------- ----------
Total common stock equity. . . . . . . . . . . . . . . 1,710,862 1,664,857
Preferred stock redeemable solely at the
option of the company . . . . . . . . . . . . . . . 140,500 140,500
Preferred stock subject to mandatory
redemption requirements . . . . . . . . . . . . . . 125,000 125,000
Long-term debt . . . . . . . . . . . . . . . . . . . . 1,650,118 1,651,081
---------- ----------
Total Capitalization . . . . . . . . . . . . . . . 3,626,480 3,581,438
Current Liabilities
Current portion of long-term debt. . . . . . . . . . . 11,147 36,231
Notes payable. . . . . . . . . . . . . . . . . . . . . 68,800 151,900
Accounts payable and accrued liabilities . . . . . . . 87,553 107,356
Interest accrued . . . . . . . . . . . . . . . . . . . 38,124 25,132
Other. . . . . . . . . . . . . . . . . . . . . . . . . 119,508 94,961
---------- ----------
Total Current Liabilities . . . . . . . . . . . . 325,132 415,580
Deferred Credits and Other Liabilities
Accumulated deferred investment tax credit . . . . . . 130,888 132,440
Excess deferred federal income taxes . . . . . . . . . 33,914 34,040
Other postretirement benefits. . . . . . . . . . . . . 62,290 55,887
Liability for environmental restoration. . . . . . . . 33,600 33,600
Other. . . . . . . . . . . . . . . . . . . . . . . . . 123,947 131,585
---------- ----------
Total Deferred Credits and Other Liabilities. . . 384,639 387,552
Accumulated Deferred Federal Income Taxes
Unfunded future federal income taxes . . . . . . . . . 362,224 363,151
Other. . . . . . . . . . . . . . . . . . . . . . . . . 489,176 475,184
---------- ----------
Total Accumulated Deferred Federal
Income Taxes . . . . . . . . . . . . . . . . . . 851,400 838,335
Commitments and Contingencies . . . . . . . . . . . . . - -
---------- ----------
Total Capitalization and Liabilities. . . . . . .$5,187,651 $5,222,905
========== ==========
The note on page 6 is an integral part of the financial statements.
<PAGE>
Item 1. Financial Statements (Cont'd)
New York State Electric & Gas Corporation
Consolidated Statements of Cash Flows - (Unaudited)
(Thousands)
Periods Ended March 31 Three Months
1995 1994
Operating Activities
Net income . . . . . . . . . . . . . . . . . . . . $75,584 $84,693
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization. . . . . . . . . . 46,026 43,420
Deferred fuel and purchased gas. . . . . . . . . 19,049 12,148
Federal income taxes and investment tax credits
deferred, net. . . . . . . . . . . . . . . . . (3,114) 3,262
Unbilled revenue amortization. . . . . . . . . . (925) (2,115)
Changes in current operating assets and liabilities:
Accounts receivable excluding accounts
receivable sold. . . . . . . . . . . . . . . . (10,911) (39,567)
Prepayments. . . . . . . . . . . . . . . . . . . (18,640) (21,224)
Inventory. . . . . . . . . . . . . . . . . . . . 22,082 29,337
Accounts payable and accrued liabilities . . . . (19,803) (16,033)
Taxes accrued. . . . . . . . . . . . . . . . . . 40,225 42,355
Interest accrued . . . . . . . . . . . . . . . . 12,992 9,728
Other, net . . . . . . . . . . . . . . . . . . . . (4,488) 499
------- -------
Net Cash Provided by Operating Activities . . . 158,077 146,503
------- -------
Investing Activities
Utility plant capital expenditures,
net of allowance for other funds
used during construction . . . . . . . . . . . . (34,380) (53,557)
Proceeds received from governmental and
other sources. . . . . . . . . . . . . . . . . . 3,400 214
Expenditures for other property and investments. . (1,184) (3,147)
Funds restricted for capital expenditures. . . . . 1,324 10,929
------- -------
Net Cash Used in Investing Activities . . . . . (30,840) (45,561)
------- -------
Financing Activities
Issuance of pollution control notes. . . . . . . . 37,000 37,500
Sale of common stock . . . . . . . . . . . . . . . - 10,558
Repayments of first mortgage bonds, preferred
stock and pollution control notes,
including premiums . . . . . . . . . . . . . . . (60,000) (156,700)
Changes in funds set aside for preferred stock
repayments . . . . . . . . . . . . . . . . . . . - 95,000
Long-term notes, net . . . . . . . . . . . . . . . (2,258) (500)
Notes payable, net . . . . . . . . . . . . . . . . (83,100) (29,800)
Dividends on common and preferred stock. . . . . . (29,762) (44,335)
------- -------
Net Cash Used in Financing Activities . . . . . (138,120) (88,277)
------- -------
Net (Decrease) Increase in Cash and
Cash Equivalents . . . . . . . . . . . . . . . . (10,883) 12,665
Cash and Cash Equivalents, Beginning of Period. . . 22,322 4,264
------- -------
Cash and Cash Equivalents, End of Period. . . . . . $11,439 $16,929
======= =======
Supplemental Disclosure of Cash Flows Information
Cash paid during the period
Interest, net of amounts capitalized. . . . . . . $18,111 $23,202
Income taxes. . . . . . . . . . . . . . . . . . . - $2,841
The note on page 6 is an integral part of the financial statements.
4
<PAGE>
Item 1. Financial Statements (Cont'd)
New York State Electric & Gas Corporation
Consolidated Statements of Retained Earnings - (Unaudited)
(Thousands)
Periods ended March 31 Three Months
1995 1994
Balance, beginning of period. . . . . . . . . . $346,547 $320,114
Add net income. . . . . . . . . . . . . . . . . 75,584 84,693
-------- --------
422,131 404,807
Deduct dividends on capital stock:
Preferred. . . . . . . . . . . . . . . . . . . 4,759 4,859
Common . . . . . . . . . . . . . . . . . . . . 25,026 38,856
-------- --------
29,785 43,715
-------- --------
Balance, end of period. . . . . . . . . . . . . $392,346 $361,092
======== ========
The note on page 6 is an integral part of the financial statements.
<PAGE>
Item 1. Financial Statements (Cont'd)
Note 1. Unaudited Consolidated Financial Statements
The accompanying unaudited consolidated financial statements
reflect all adjustments which are, in the opinion of management,
necessary for a fair presentation of New York State Electric &
Gas Corporation's (company) consolidated results for the interim
periods. All such adjustments are of a normal recurring nature.
The unaudited consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes
contained in the company's annual report for the year ended
December 31, 1994. Due to the seasonal nature of the company's
operations, financial results for interim periods are not neces-
sarily indicative of trends for a twelve-month period.
Item 2. Management's discussion and analysis of financial
condition and results of operations
(a) Liquidity and Capital Resources
FERC Regulatory Matters
In March 1995, the Federal Energy Regulatory Commission
(FERC) issued two notices of proposed rulemaking (March NOPR) to
facilitate the development of competitive wholesale electric
markets by opening up transmission services and to address the
transition costs associated with the development of competitive
wholesale markets.
The March NOPR supersedes the NOPR issued by the FERC last
June regarding transition costs (See Form 10-K for fiscal year
ended December 31, 1994, Item 1(c)(x) Competitive conditions).
If the March NOPR is adopted as currently proposed, the company
and other utilities with whom the company engages in transmission
and wholesale power transactions would be (1) required to file
open access transmission tariffs under which they would provide
services, including ancillary services, to third parties on a
non-discriminatory basis; (2) required to charge themselves, in
the context of each one's wholesale power sales, the same rate
for transmission that it charges its wholesale transmission
customers for the use of its system; (3) permitted to recover
legitimate and verifiable stranded costs associated with a
municipality establishing its own electric system and newly
created or expanded wholesale customers; (4) required to comply
with regulations implementing the filing of the open access
tariffs and the initial rates under these tariffs; and 5)
required to establish an electronic bulletin board, called a
real-time information network, which would provide all
transmission users simultaneous access to transmission data.
These requirements could affect the revenues received and
payments made by the company in connection with its transmission
and wholesale power transactions.
The March NOPR does not require utilities to provide
transmission service to deliver a third party's power to the
transmitter's retail customers (retail wheeling). FERC did not
express a view as to whether states had authority to require
retail wheeling. FERC stated, however, that state commissions
should allow utilities to recover transition costs created by
retail wheeling if and when the states require retail wheeling.
If states do not have authority to address transition costs
associated with retail wheeling, FERC indicated it would do so.
The company plans to file comments addressing both legal
issues and technical issues raised by the March NOPR before the
due date of August 7, 1995. Reply comments are due by October 4,
1995.
FERC Filing (See Form 10-K for fiscal year ended December 31,
1994, Item 1(c)(i)-Principal business)
On February 14, 1995 the company filed a petition with the
FERC asking for relief from having to pay approximately $2
billion more than its avoided costs for power purchased over the
life of two non-utility generator (NUG) contracts. The company
believes that the overpayments under these two contracts violate
the Public Utility Regulatory Policies Act of 1978.
On April 12, 1995, FERC denied the company's petition and
alleged the following reasons for the denial: (a) the company's
contracts are consistent with FERC regulations, (b) the company's
contracts were not challenged at the time they were executed and,
therefore, the company's challenge now is untimely, and (c) the
need to maintain the sanctity of contracts in order to facilitate
project financing and the transition to wholesale competition.
The company is planning to file a petition for rehearing with the
FERC by May 12, 1995.
Flexible Rates
The company has developed flexible rates that allow it to
negotiate long-term contracts with certain of its electric and
its natural gas customers. The contracts may cover existing
load, new load, or both. To date, 12 major electric industrial
customers have signed contracts ranging from three to seven
years. These contracts retain more than $42 million and add
another $7 million in annual revenues, which together represent
3.0% of the company's total electric revenues for the twelve
months ended March 31, 1995. Also each month the company
develops over 275 natural gas prices to compete with the
alternative fuels available.
<PAGE>
Responding to Competition (See Form 10-K for fiscal year ended
December 31, 1994, Item 1(c)(x) - Competitive conditions)
The company continually reviews its strategic plans to
address the challenges of competition. That review currently
includes a study of ways to improve organizational and financial
flexibility.
Other steps the company has taken to address competitive
pressure include the company's plans to place one of two
generating units at the company's Hickling Generating Station,
which has a generating capacity of 35 megawatts (MW), on long-
term cold standby in the spring of 1995 and to closely evaluate
the economics of five other units (308 MW) to make sure their
output remains marketable and their operation economical. This
is in addition to the two generating units (97 MW) that were
placed on long-term cold standby during 1994.
Diversification (See Form 10-K for fiscal year ended December 31,
1994, Item 1(a) - Diversification)
NGE Enterprises, Inc. (NGE), a wholly owned subsidiary of
the company, owns two unregulated businesses - EnerSoft
Corporation (EnerSoft) and XENERGY, Inc. (XENERGY). EnerSoft,
formed in May 1993, is a computer software company developing and
marketing software for natural gas utilities, marketers and
pipeline operators. XENERGY, acquired in June 1994, is an energy
services, information systems and energy-consulting company
providing energy services, conservation engineering and DSM
services to utilities, governmental agencies and end-use energy
consumers.
EnerSoft, through an alliance with the New York Mercantile
Exchange, is developing Channel 4, a natural gas and pipeline
capacity trading and information system for the North American
market. Development of the system has taken longer than
anticipated. On April 4, 1995, final testing of the system, by
end users, began. Channel 4 is currently expected to be
commercially available in the late spring or early summer of
1995. Like most development stage companies, EnerSoft has been
incurring operating losses. The company expects that EnerSoft
will continue to incur operating losses in the near term.
NGE is exploring environmental and operating services
opportunities with both domestic and foreign strategic partners.
As of April 30, 1995 and December 31, 1994, the company had
invested approximately $49 million and $47 million, respectively,
in NGE to finance its diversified investments. For the quarter
ended March 31, 1995 and for the year ended December 31, 1994,
NGE incurred net losses of $2.3 million and $6.0 million,
respectively. The company expects that NGE will incur an
operating loss in 1995 similar in size to that experienced in
1994. The company expects that NGE will break even in 1996 and
that it will contribute to earnings by 1997.
Net Cash Provided by Operating Activities
Cash provided by operating activities for the first quarter
of 1995 increased $12 million, up 8% from the first quarter of
1994. The increase was primarily due to a reduction in cash used
for working capital items in 1994. Net cash from operating
activities is derived by adjusting reported net income for
charges or credits that have no cash effect (primarily
depreciation, amortization and deferred income taxes) and changes
in working capital items.
Net Cash Used in Investing Activities
For the quarter ended March 31, 1995, cash used in investing
activities decreased $15 million, down 32% compared to the same
quarter in 1994. The change was primarily due to a decrease in
expenditures for utility plant construction.
Capital expenditures for the first quarter of 1995 were
approximately $34 million and have been primarily for the
extension of service, necessary improvements at existing
facilities, compliance with the Clean Air Act Amendments of 1990,
and other environmental requirements. The company received $3
million from governmental and other sources to partially offset
expenditures for compliance with the Clean Air Act Amendments of
1990. The company estimates that it will spend $188 million for
capital expenditures in 1995.
Net Cash Used in Financing Activities
Cash used in financing activities for the first quarter of
1995 increased $50 million, up 56% from the first quarter of
1994. This increase reflects a reduction of debt levels.
In February 1995 $25 million of 5.9% tax-exempt pollution
control revenue bonds and $12 million of 6.0% tax-exempt
pollution control revenue bonds were issued by governmental
authorities, on behalf of the company. Proceeds from those sales
were used for the redemption in March 1995 of $25 million of 6
7/8% pollution control revenue bonds, due 2006, and $12 million
of 7 1/4% pollution control revenue bonds, due 2006. The
refundings of those bonds will save approximately $250,000
annually in interest costs.
<PAGE>
Rate Matters (See Form 10-K for fiscal year ended December 31,
1994, Item 1(a)-Rates and regulatory matters-Rate Matters.)
On April 19, 1995, the company, the Public Service
Commission of the State of New York (PSC) staff and the New York
State Consumer Protection Board agreed on a new three-year
electric rate settlement agreement (new agreement) that would
keep increases in the company's average electric prices below the
projected inflation rates for each of the next three years.
Subject to approval by the PSC, the new agreement would take
effect August 1, 1995 and continue through July 31, 1998. The
first year of the new agreement would replace the final year of
the company's current three-year rate settlement agreement
(current agreement). On May 1, 1995 the company filed (May
filing) with the PSC for adjustments to the third year electric
and natural gas rates in accordance with the terms of the current
agreement. The May filing would result in an estimated electric
price increase of 9.1%, and a natural gas base rate increase of
3.2%. The May filing provides for an 11.0% return on common
equity. If the new agreement is approved by the PSC, then the
electric price increase proposed in the May filing would not take
effect.
The new agreement would increase the company's electric
revenue:
- 2.9% in year one, beginning August 1, 1995
- 2.8% in year two, beginning August 1, 1996
- 2.7% in year three, beginning August 1, 1997
Sixty percent of the proposed increase in revenue in the
first year of the new agreement is to cover the escalating cost
of electricity the company is required to buy from NUGs.
The average price of electricity for residential customers
would increase 3.6%, or about one-half of a cent per kilowatt-
hour, in the first year of the new agreement. The first-year
increase for commercial customers would be 4%. The new agreement
also provides that prices for industrial customers not under
contract will not increase during the three-year term. The
allocation of the price increase to each service class for years
two and three will be determined at a later date.
The fuel adjustment clause (FAC) and the revenue decoupling
mechanism (RDM) would both be eliminated. The FAC allows the
company to modify the price of electricity based on changes in
the cost of fuel used to generate electricity, purchased power
and revenues from sales of electricity to other utilities. The
RDM allows the company to adjust the price of electricity based
on most differences between forecasted and actual sales margins.
In addition to the elimination of the FAC and RDM, the new
agreement would eliminate most true-up mechanisms. Eliminating
these and other adjustments that are currently in place means
that there would be greater certainty regarding electric prices.
Items that will continue to be trued-up with deferred ratemaking
include pension and post-retirement benefit costs, Nine Mile
Point 2 expenses (excluding fuel) and all variable-rate debt and
preferred stock costs, including the accounts receivable sale
program.
Under the new agreement, there are only two incentives: a
service quality incentive and an earnings performance incentive.
The service quality incentive is similar to an incentive that is
in the current agreement, and the earnings performance incentive
provides for sharing of earnings in excess of the allowed return
on equity. The production cost incentive would be eliminated
effective January 1, 1994.
Allowed returns on common equity under the new agreement
would be 11.1% for year one, 11.2% for year two and 11.2% for
year three.
Discussions are under way between the company, the PSC staff
and other parties regarding a new gas rate settlement agreement
(new gas agreement). In addition, the company recently filed
with the PSC for adjustments to the third year natural gas rates
in accordance with the terms of the current agreement, as
mentioned above. If negotiations are successful with the new gas
agreement, then the gas price increase proposed in the May filing
would not take effect. The company does not expect base natural
gas rates to increase above the rate of inflation for the next
few years.
(b) Results of Operations
Three months ended March 31, 1995 compared with three months
ended March 31, 1994:
1995 1994 % Change
(Thousands, except Per Share Amounts)
Operating revenues $571,910 $565,167 1%
Earnings available for
common stock $70,825 $79,834 (11%)
Average shares outstanding 71,503 70,801 1%
Earnings per share $.99 $1.13 (12%)
Dividends per share $.35 $.55 (36%)
Operating revenues for the first quarter of 1995 increased
$7 million, or 1%, compared to the first quarter of 1994.
Changes in operating revenues are discussed by business segment
beginning on this page.
Earnings per share decreased 14 cents, or 12%, for the first
three months of 1995. Earnings were reduced by 17 cents per
share due to lower natural gas deliveries and electric retail
sales that reflected the warmer first quarter of 1995 compared to
the extreme cold for the same period in 1994, and continued
sluggish economic conditions in the company's service territory.
Lower electric retail sales affected earnings because beginning
in March 1995, the company is no longer recording revenues for
sales shortfalls through the modified RDM. This is in accordance
with the new agreement, which is subject to PSC approval (see
Liquidity and Capital Resources - Rate Matters). Earnings per
share increased by 7 cents because of the higher allowed return
on equity, 11.4% effective in August 1994 compared to 10.8%
effective in August 1993, partially offsetting the decreases.
Operating Results by Business Segment
Electric Three Months ended March 31,
1995 1994 % Change
(Thousands)
Retail sales-kilowatt-
hours(kwh) 3,462,090 3,752,617 (8%)
Operating revenues $450,001 $424,520 6%
Operating expenses $358,279 $327,609 9%
Operating income $91,722 $96,911 (5%)
Electric retail sales decreased 8% in the first quarter of
1995 compared to the prior year quarter as a result of warmer
weather and continued sluggish economic conditions in the
company's service territory.
The $25 million, or 6%, increase in electric operating
revenues for the quarter ended March 31, 1995 was primarily the
result of increased rates effective August 1994, which added $19
million, and an $11 million increase in revenues from sales of
electricity to other utilities. The higher electric rates are
mainly attributable to mandated purchases of NUG power. These
increases were partially offset by a decrease of $5 million
because, beginning in March 1995, the company is no longer
recording revenues for sales shortfalls through the modified RDM,
in accordance with the new agreement, which is subject to PSC
approval.
Electric operating expenses rose by $31 million, or 9%, for
the first quarter of 1995 primarily because of an increase of $34
million in electricity purchased, principally due to purchases
from NUGs. This increase was partially offset by a $4 million
decrease in fuel costs mainly attributable to lower fuel prices.
Natural Gas Three Months ended March 31,
1995 1994 % Change
(Thousands)
Deliveries-
dekatherms(dth) 22,539 26,465 (15%)
Operating revenues $121,909 $140,647 (13%)
Operating expenses $102,875 $117,568 (12%)
Operating income $19,034 $23,079 (18%)
Natural gas deliveries for the three-month period decreased
15% in 1995 compared to 1994 due to warmer weather and continued
sluggish economic conditions in the company's service territory.
Natural gas operating revenues declined by $19 million, or
13%, in the first quarter of 1995 compared to the first quarter
of 1994. Lower sales accounted for a revenue decrease of $28
million. This decrease was partially offset by a $5 million
increase in net revenues collected through the gas weather
normalization clause. The change in natural gas rates effective
in August 1994 added another $2 million to revenues.
The $15 million, or 12%, decrease in natural gas operating
expenses is due to a $13 million decrease in purchased gas,
mainly because of the lower volume of natural gas purchases, and
a decrease of $2 million in federal income taxes, the result of
lower pre-tax book income.
PART II - OTHER INFORM ATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - See Exhibit Index.
(b) Report on Form 8-K
No reports on Form 8-K were filed during the quarter for
which this report is filed.<PAGE>
Signature
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
NEW YORK STATE ELECTRIC & GAS CORPORATION
(Registrant)
By GARY J. TURTON
GARY J. TURTON
Controller
(Chief Accounting Officer)
Date: May 10, 1995
<PAGE>
EXHIBIT INDEX
27 -- Financial Data Schedule.
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE COMPANY'S FINANCIAL STATEMENTS INCLUDED IN ITS FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 1995 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 3,975,383
<OTHER-PROPERTY-AND-INVEST> 103,194
<TOTAL-CURRENT-ASSETS> 325,553
<TOTAL-DEFERRED-CHARGES> 783,521
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 5,187,651
<COMMON> 476,686
<CAPITAL-SURPLUS-PAID-IN> 841,830
<RETAINED-EARNINGS> 392,346
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,710,862
125,000
140,500
<LONG-TERM-DEBT-NET> 1,650,118
<SHORT-TERM-NOTES> 68,800
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 11,147
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,481,224
<TOT-CAPITALIZATION-AND-LIAB> 5,187,651
<GROSS-OPERATING-REVENUE> 571,910
<INCOME-TAX-EXPENSE> 46,567
<OTHER-OPERATING-EXPENSES> 414,587
<TOTAL-OPERATING-EXPENSES> 461,154
<OPERATING-INCOME-LOSS> 110,756
<OTHER-INCOME-NET> (1,372)
<INCOME-BEFORE-INTEREST-EXPEN> 109,384
<TOTAL-INTEREST-EXPENSE> 33,800
<NET-INCOME> 75,584
4,759
<EARNINGS-AVAILABLE-FOR-COMM> 70,825
<COMMON-STOCK-DIVIDENDS> 25,026
<TOTAL-INTEREST-ON-BONDS> 29,585
<CASH-FLOW-OPERATIONS> 158,077
<EPS-PRIMARY> 0.99
<EPS-DILUTED> 0.99
</TABLE>
