<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 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 0-82
NORTH CAROLINA NATURAL GAS CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 56-0646235
- ------------------------ -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
150 Rowan Street, Fayetteville, North Carolina 28301-4993
(Address of principal executive offices)
(Zip Code)
(910) 483-0315
(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 [ ]
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Common Stock, $2.50 par value 6,634,152
- ----------------------------- ----------------
Class Number of Shares
<PAGE> 2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
NORTH CAROLINA NATURAL GAS CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands)
ASSETS
March 31, September 30,
1997 1996
--------- ------------
Gas Utility Plant
In service $284,641 $277,212
Less-Accumulated depreciation
and amortization (100,371) (95,578)
------- --------
184,270 181,634
Construction work in progress 12,221 2,800
------- -------
Utility Plant, net 196,491 184,434
------- -------
Nonutility Property 6,494 5,947
Less-Accumulated depreciation (2,435) (2,358)
------- -------
Nonutility Property, net 4,059 3,589
------- -------
Current Assets
Cash and temporary cash investments 1,525 1,117
Restricted cash and temporary
cash investments 1,864 5,691
Accounts receivable, less reserve 31,092 17,302
Recoverable purchased gas costs - 3,237
Inventories, at average cost -
Gas in storage 4,382 9,983
Materials and supplies 3,670 2,725
Merchandise 1,181 1,308
Deferred gas cost-unbilled volumes 1,633 324
Other current assets 490 195
------- -------
Total Current Assets 45,837 41,882
------- -------
Investment in joint ventures 1,189 744
Deferred charges and other assets 2,108 2,130
------- -------
Total Assets $249,684 $232,779
======= =======
(The accompanying notes are an integral part of these balance sheets.)
<PAGE> 3
NORTH CAROLINA NATURAL GAS CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands)
CAPITALIZATION AND LIABILITIES
March 31, September 30,
1997 1996
-------- -------------
Capitalization
Stockholders' investment:
Common stock, par value $2.50;
12,000 shares authorized; shares
issued and outstanding:
03/31/97-6,633; 09/30/96-6,573 $16,582 $16,432
Capital in excess of par value 31,202 29,634
Retained earnings 67,835 55,892
------- -------
Total Stockholders' Investment 115,619 101,958
------- -------
Long-term debt 63,000 63,000
------- -------
Total Capitalization 178,619 164,958
------- -------
Current Liabilities
Current maturities of long-term debt 2,000 2,000
Notes payable 4,000 3,000
Accounts payable 19,374 16,339
Refunds payable 885 -
Customer deposits 2,343 1,964
Restricted supplier refunds 1,864 5,691
Accrued interest 2,350 2,334
Accrued income and other taxes 5,291 4,281
Other current liabilities 2,602 2,266
------- -------
Total Current Liabilities 40,709 37,875
------- -------
Other Credits
Deferred income taxes 21,041 21,015
Regulatory liability related to
income taxes, net 2,820 2,924
Unamortized investment tax credits 2,622 2,720
Postretirement and postemployment
benefit liability 2,649 2,262
Other 1,224 1,025
------- -------
Total Other Credits 30,356 29,946
------- -------
Total Capitalization and Liabilities $249,684 $232,779
======= =======
(The accompanying notes are an integral part of these balance sheets.)
<PAGE> 4
NORTH CAROLINA NATURAL GAS CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Income (Unaudited)
For the Three Months Ended March 31, 1997 and 1996
(in thousands except per share amounts)
1997 1996
------ ------
Operating Revenues $69,381 $73,535
Cost of Gas 42,195 47,221
------ ------
Gross Margin 27,186 26,314
------ ------
Operating Expenses and Taxes:
Operations and Maintenance 6,636 5,546
Depreciation 2,485 2,363
General Taxes 2,900 3,025
Income Taxes 5,279 5,269
------ ------
Total Operating Expenses and Taxes 17,300 16,203
------ ------
Operating Income 9,886 10,111
Other Income, net 2,039 696
------ ------
Income Before Utility Interest Charges 11,925 10,807
Utility Interest Charges 1,019 1,284
------ ------
Net Income $10,906 $9,523
====== ======
Average Common Shares Outstanding 6,612 6,518
====== ======
Earnings Per Share $1.65 $1.46
====== ======
Dividends Declared Per Share $0.350 $0.325
====== ======
(The accompanying notes are an integral part of these statements.)
<PAGE> 5
NORTH CAROLINA NATURAL GAS CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Income (Unaudited)
For the Six Months Ended March 31, 1997 and 1996
(in thousands except per share amounts)
1997 1996
------- ------
Operating Revenues $122,836 $120,344
Cost of Gas 75,785 77,510
------- -------
Gross Margin 47,051 42,834
------- -------
Operating Expenses and Taxes:
Operations and Maintenance 12,469 10,620
Depreciation 4,942 4,626
General Taxes 5,176 5,107
Income Taxes 8,298 7,415
------- -------
Total Operating Expenses and Taxes 30,885 27,768
------- -------
Operating Income 16,166 15,066
Other Income, net 2,455 1,354
------- -------
Income Before Utility Interest Charges 18,621 16,420
Utility Interest Charges 2,225 2,630
------- -------
Net Income $16,396 $13,790
======= =======
Average Common Shares Outstanding 6,595 6,499
======= =======
Earnings Per Share $2.49 $2.12
======= =======
Dividends Declared Per Share $0.675 $0.630
======= =======
(The accompanying notes are an integral part of these statements.)
<PAGE> 6
NORTH CAROLINA NATURAL GAS CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Income (Unaudited)
For the Twelve Months Ended March 31, 1997 and 1996
(in thousands except per share amounts)
1997 1996
------ ------
Operating Revenues $199,130 $179,088
Cost of Gas 126,504 114,604
------- -------
Gross Margin 72,626 64,484
------- -------
Operating Expenses and Taxes:
Operations and Maintenance 24,937 21,343
Depreciation 9,764 8,741
General Taxes 8,951 8,238
Income Taxes 9,129 7,986
------- -------
Total Operating Expenses and Taxes 52,781 46,308
------- -------
Operating Income 19,845 18,176
Other Income, net 2,528 1,283
------- -------
Income Before Utility Interest Charges 22,373 19,459
Utility Interest Charges 4,595 4,797
------- -------
Net Income $17,778 $14,662
======= =======
Average Common Shares Outstanding 6,574 6,469
======= =======
Earnings Per Share $2.70 $2.27
======= =======
Dividends Declared Per Share $1.325 $1.240
======= =======
(The accompanying notes are an integral part of these statements.)
<PAGE> 7
NORTH CAROLINA NATURAL GAS CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (Unaudited)
For the Six Months Ended March 31, 1997 and 1996
(in thousands)
1997 1996
------ ------
Cash Flows From Operating Activities:
Net Income $16,396 $13,790
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation and amortization 5,064 4,743
Change in deferred income taxes and
deferred investment tax credits, net (72) 776
Change in other current assets and
liabilities (1,511) (955)
Other 282 128
------ ------
Net cash provided by operating activities 20,159 18,482
------ ------
Cash Flows From Investing Activities:
Property additions (17,571) (7,973)
Other, net (446) -
------ ------
Net cash used in investing activities (18,017) (7,973)
------ ------
Cash Flows From Financing Activities:
Increase (decrease) in notes payable 1,000 (27,000)
Issuance of long-term debt - 29,809
Cash dividends paid (4,452) (4,095)
Issuance of common stock through dividend
reinvestment, employee stock purchase,
and key employee stock option plans 1,718 1,347
------ -------
Net cash provided by (used in)
financing activities (1,734) 61
------ ------
Net increase in cash and
temporary cash investments 408 10,570
Cash and temporary cash investments,
beginning of period 1,117 1,639
------ ------
Cash and temporary cash investments,
end of period $1,525 $12,209
====== ======
Cash paid for:
Interest, net of amounts capitalized $2,630 $2,012
Income taxes, net of refunds 8,429 2,843
(The accompanying notes are an integral part of these statements.)
<PAGE> 8
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1997
Note 1: The condensed financial statements included in this report reflect
only normal recurring adjustments which are, in the opinion of management,
necessary to a fair statement of the results for the periods shown. Because
of the seasonal nature of the Company's business, the results of operations
for the six month period ended March 31, 1997 are not necessarily
indicative of the results for the full year. These financial statements
have been prepared by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information
and footnote disclosures normally included in financial statements prepared
in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although the
Company believes that the disclosures are adequate to make the information
presented not misleading. It is suggested that these condensed financial
statements be read in conjunction with the financial statements and the notes
thereto included in the Company's annual report for the fiscal year ended
September 30, 1996.
Note 2: Certain prior year amounts in the unaudited condensed
consolidated Financial Statements have been reclassified to conform with
current year presentation.
Note 3: Long-Term Debt at March 31, 1997:
Amount Due
Within
Issue One Year Total
------------------------- ---------- --------
7.15% Senior Notes, due 11/15/15 $ - $30,000,000
9.21% Debentures, Series C, due 11/15/11 - 25,000,000
8.75% Debentures, Series B, due 06/15/01 2,000,000 10,000,000
----------- ----------
Long-Term Debt $ 2,000,000 $65,000,000
=========== ==========
<PAGE> 9
Note 4: At March 31, 1997, the Company had $1.9 million in restricted
supplier refunds, none of which were received in the current quarter. Upon
order of the NCUC, the Company has invested all of these funds in U.S. Treasury
securities until such time as the Commission orders the funds
transferred to an Expansion Fund ( the Fund). The Fund is administered by the
Commission pursuant to legislation passed in July 1991, and it encourages
the expansion of Natural Gas service into unserved areas of the State,
including substantial portions of the Company's franchised service territory.
On April 30, 1993, October 19, 1994, and November 13, 1996, respectively, the
Company transferred $3.8 million, $6.6 million, and $3.9 million to the Fund.
At March 31, 1997, a total of $16.6 million is in the Fund and is available to
the Company only upon application to the NCUC for an expansion project approved
by the NCUC.
Note 5: On May 15, 1996, the Company filed with the NCUC to recover net
customer costs of $3,005,000 from exploration and development activities.
The recovery is a result of a true-up of distribution costs and revenue
benefits from the Company's past exploration and drilling programs. On
February 7, 1997, the NCUC issued its order granting a pretax recovery of
$1,879,853. The Commission's Order approved, in all material respects, the
Stipulation of Settlement reached by the Company and the Public Staff. Due to
the uncertainty of recovery, prior to the Final Order no asset or gain
was recorded in the Company's financial statements. As a result of the
above, the Company realized a $.17 increase in earnings in the quarter, six
months and twelve months ended March 31, 1997.
<PAGE> 10
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(1) Material Changes in Financial Condition
---------------------------------------
Current cash requirements are financed primarily through internally
generated cash, the issuance of new common stock through dividend reinvestment,
employee stock purchase and key employee stock option plans along with
committed bank lines of credit totaling $24.0 million plus the cost of gas
in storage. At March 31, 1997, loans totaling $4.0 million were outstanding
under the lines of credit compared to $3.0 million outstanding at September
30, 1996.
The Company's business is seasonal in nature as fluctuations in weather
dictate injecting and withdrawing from Company storage and billings to
residential and commercial customers. Injections of natural gas into
storage and a reduction in customer billings occur during the periods of warm
weather (April through October). Withdrawals from storage and increased
customer billings occur during periods of cold weather (November through
March). In addition, the cost of gas included in storage and rates is subject
to changes in market conditions. This seasonality is the primary reason
for the lower volumes of gas in storage as of March 31, 1997, which is
somewhat offset by higher average gas costs. The seasonality and higher
gas costs included in rates also accounts for the higher level of accounts
receivable in the current quarter.
Recoverable Purchased Gas Costs primarily represent the difference
between the Company's benchmark rate charged to customers and the actual
cost of gas. The decrease was due to a higher benchmark rate charged to
customers during the current quarter, coupled with a surcharge to recover past
gas costs.
Net cash provided by operating activities increased $1.7 million for the
six months ended March 31, 1997, as compared to the same period last year. This
increase was due primarily to (1) an increase in accounts payable caused by
higher cost of gas and increased construction activity, and (2) an increase
in taxes payable due to higher income and related taxes.
Construction spending was $17.6 million for the six months ended March
31, 1997, compared to $8.0 million for the same period in 1996. The
higher spending level in 1997 was due to certain 1996 budgeted
construction projects not being completed as planned. Construction
expenditures for the remainder of the fiscal year 1997 are projected at $15
million. Management believes that the Company's lines of credit and cash
provided from operating activities will be sufficient to satisfy the Company's
anticipated short-term cash requirements during the remainder of fiscal year
1997.
<PAGE> 11
Net cash provided by financing activities decreased $1.8 million for the
six months ended March 31, 1997, as compared to the same period last year.
The primary reason for this decrease was the private placement of $30.0
million Senior Notes reduced by the net repayment of short-term debt in the
amount of $27.0 million in 1996 compared to net short-term borrowings of $1.0
million in 1997.
(2) Material Changes in Results of Operations
-----------------------------------------
Net income increased $1.4 million, $2.6 million, and $3.1 million,
respectively, for the three month, six month and twelve month periods ended
March 31, 1997 as compared to the same periods last year. Affecting all periods
were: (1) a nonrecurring credit of $1,128,000 related to the settlement of a
long-standing regulatory matter (see Note 5), (2) customer growth at an
annualized rate of 4.3%; and (3) lower utility interest charges. Also
affecting the twelve month period was the Company's general rate increase
effective November 1, 1995.
Gross margin increased $872,000, $4.2 million, and $8.1 million,
respectively, for the three month, six month and twelve month periods ended
March 31, 1997 compared to the same periods last year. The chart below
compares margins for the three month, six month and twelve month periods by
customer class (000's omitted):
GROSS MARGIN BY CUSTOMER CLASS
------------------------------
3 Months 6 Months 12 Months
--------------- --------------- ---------------
1997 1996 1997 1996 1997 1996
---- ---- ---- ---- ---- ----
Residential $10,920 $10,951 $16,893 $16,145 $24,978 $21,773
Commercial 6,420 5,888 10,017 8,889 14,899 12,162
Industrial 6,734 6,192 14,529 12,244 25,109 23,276
Municipal 3,112 3,283 5,612 5,556 7,640 7,273
------ ------ ------ ------ ------ ------
Total $27,186 $26,314 $47,051 $42,834 $72,626 $64,484
====== ====== ====== ====== ====== ======
<PAGE> 12
During the most recent quarter residential and municipal margins were
down slightly due to weather that was 31% warmer than the same period last year
and 28% warmer than normal. However, the Company's Weather Normalization
Adjustment ratemaking mechanism largely mitigates the decreases in margin
to residential and some commercial customers (including those customer
classes served by the four municipal customers) due to warmer-than-normal
weather. Partially offsetting these lower margins was strong customer growth.
Gross margin for the industrial class was up almost 9% because a reduction in
curtailment due to warmer weather increased sales and transportation volumes
to process gas users.
Gross margins increased for all customer classes for both the six
month and twelve months periods. Positively affecting both periods were
customer growth and related income in facilities' charges, the change in the
Company's last general rate case to adopt the Price Sensitive Volume Adjustment
(PSVA) mechanism and elimination of the Industrial Sales Tracker (IST)
mechanism, as this resulted in the Company's retention of more margin from
the large interruptible customers with #6 oil as an alternative fuel. Also
affecting the twelve month period was increased rates as a result of the
November 1, 1995 General Rate Case.
The chart below shows total throughput volumes (in thousands of dt)
for the three month, six month and twelve month periods of 1996 and 1997 by
customer class:
THROUGHPUT VOLUMES (Mdt) BY CUSTOMER CLASS
------------------------------------------
3 Months 6 Months 12 Months
--------------- ---------------- -----------------
1997 1996 1997 1996 1997 1996
---- ---- ---- ---- ---- -----
Residential 3,293 4,012 4,803 5,531 6,409 6,732
Commercial 2,342 2,793 3,880 4,346 6,216 6,427
Industrial 7,264 5,638 15,376 12,678 32,397 31,217
Municipal 3,055 3,585 5,902 6,514 8,950 9,338
------ ------ ------ ------ ------ ------
Total 15,954 16,028 29,961 29,069 53,972 53,714
====== ====== ====== ====== ====== ======
<PAGE> 13
The following chart shows the same total throughput volume classified by
sales and transportation:
THROUGHPUT VOLUMES (Mdt) BY TYPE OF SERVICE
-------------------------------------------
3 Months 6 Months 12 Months
----------------- ------------------ -----------------
1997 1996 1997 1996 1997 1996
---- ---- ---- ---- ---- ----
Sales 11,219 14,440 19,876 25,336 34,771 38,919
Transportation 4,735 1,588 10,085 3,733 19,201 14,795
------ ------ ------ ------ ------ ------
Total 15,954 16,028 29,961 29,069 53,972 53,714
====== ====== ====== ====== ====== ======
The Company earns the same profit margin on transportation of customer-
owned gas as it earns from bundled sales service to those customers.
However, changes in the mix of transportation and sales volumes can have
significant impacts on operating revenues and cost of gas, because the
commodity cost of gas associated with transportation volumes is paid by the
customer directly to the customer's supplier and is, therefore, not incurred
nor billed by the Company.
Weather in the Company's service area was 31%, 28%, and 24% warmer,
respectively, for the three month, six month and twelve month periods
compared to the same periods last year. This warmer-than-normal weather
resulted in reduced deliveries to weather sensitive residential, commercial
and municipal customers. During all periods the Company was able to sell or
transport more industrial volumes because the warmer-than-normal weather
resulted in fewer interruptions of service to large, interruptible customers.
Cost of gas decreased $5.0 million and $1.7 million, respectively for
the three month and six month periods ended March 31, 1997 as compared to the
same periods last year. These decreases were caused primarily by reduced
quantities purchased due to lower sales volumes, somewhat offset by
commodity gas price increases of 11% in the quarter and 28% in the six month
periods.
Cost of gas increased by $11.9 million in the twelve month period ended
March 31, 1997 as compared to the same period last year. This increase was
caused by a 32% increase in the commodity price of gas. Partially offsetting
this increase was reduced purchases of gas due to: (1) industrial customers
switching from sales service to transportation service, and (2) less
sales to residential, commercial and municipal customers because of the
warmer-than-normal weather.
<PAGE> 14
Operating revenues decreased $4.2 million for the three months ended
March 31, 1997 as compared to the same period last year. This decrease was
caused by: (1) a 22% and 19% reduction in sales to the residential and
commercial markets, respectively, and (2) a mix change to greater
transportation volumes to industrial and municipal and lower sales volumes as
shown in the table "Throughput Volumes (Mdt) By Type of Service" on page 13.
Operating revenues increased $2.5 million and $20.0 million,
respectively, for the six month and twelve month periods ended March 31, 1997
as compared to the same periods last year. Affecting both periods were (1)
higher natural gas commodity prices, and (2) an increase in the total
customer base. Also affecting the twelve month period was the general rate
increase effective November 1, 1995. Partially offsetting these increases
in both periods were less sales to high priority customers due to warm
weather, and the switch from sales to transportation service by many
industrial and municipal customers.
Operating and maintenance expenses increased $1.0 million, $1.8 million
and $3.6 million, respectively, for the three month, six month and twelve
month periods ended March 31, 1997 as compared to the same periods last year.
Affecting all periods were (1) increased expenses of higher provisions for
postretirement and postemployment benefit obligations related to FAS 106 and
FAS 112; (2) increased compressor fuel costs caused by increased usage for
system integrity; (3) increased distribution maintenance expenses; (4)
increased transmission operations expenses; and (5) higher wages associated
with the increased customer base.
Depreciation expense increased in all periods as compared to the same
periods last year due to the addition of utility plant in service, primarily
transmission and distribution plant related to expansion and customer growth.
Also affecting the twelve month period was an increase in the depreciation
rate which became effective with the Company's general rate case, November
1, 1995.
General taxes decreased in the three month period and increased in the
six month and twelve month periods as compared to the same periods last year.
The most significant tax is the state gross receipts tax which is based on
revenue and, therefore, it tracks the changes in revenues. Also, higher
property and payroll taxes affected all periods.
Income taxes increased $883,000 and $1.1 million, respectively, for the
six month and twelve month periods ended March 31, 1997, as compared to the
same periods last year. These increases were caused by an increase in
operating income.
<PAGE> 15
Other income, net, increased $1.3 million, $1.1 million and $1.2 million,
respectively, for the three month, six month and twelve month periods as
compared to the same periods last year. Affecting all periods was a
nonrecurring credit of $1,128,000 related to the settlement of a long-standing
regulatory matter. On May 15, 1996, the Company filed with the NCUC to
recover net customer costs of $3,005,000 from past exploration and development
activities. The recovery is a result of a true-up of distribution costs and
revenue benefits from the Company's exploration and drilling programs.
On February 7, 1997, the NCUC issued its order granting a pretax recovery
of $1,879,853. The Commission's Order approved, in all material respects,
the Stipulation of Settlement reached by the Company and the Public Staff.
Due to the uncertainty of recovery, prior to the Final Order no asset or
gain was recorded in the Company's financial statements.
Utility interest charges decreased $265,000 for the quarter ended March
31, 1997 as compared to the same period last year. This decrease was caused
primarily by an increase in allowance for funds used during construction
because of more work in progress during the quarter.
Utility interest expense decreased $405,000 and $202,000, respectively,
for the six month and twelve month periods as compared to the same periods last
year. These decreases were caused by (1) reduced interest expense on
short-term debt because of a reduction in short-term financing, (2) and
an increase in allowance for funds used during construction. Partially
offsetting these decreases was increased long-term debt expense associated
with the November 10, 1995 issuance of $30 million principal amount of 7.15%
Senior Notes.
<PAGE> 16
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in the Rights of the Company's Security Holders
None.
Item 3. Default Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None.
(b) Reports on Form 8-K
None.
<PAGE 17>
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.
NORTH CAROLINA NATURAL GAS CORPORATION
(Registrant)
Date: May 12, 1997 /s/ Gerald A. Teele
------------------------------------------
Gerald A. Teele
Senior Vice President, Treasurer and
Chief Financial Officer
(Principal Financial Officer)
Date: May 12, 1997 /s/ Ronald J. Josephson
------------------------------------------
Ronald J. Josephson
Vice President-Financial Services
(Principal Accounting Officer)
<PAGE> 18
NORTH CAROLINA NATURAL GAS CORPORATION
INDEX OF EXHIBITS
The following exhibit is filed as part of this Form 10-Q for the
period ended March 31, 1997:
Exhibit Number
- --------------
27 - Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> UT
<CIK> 0000072596
<NAME> NORTH CAROLINA NATURAL GAS CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> MAR-31-1997
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 196491
<OTHER-PROPERTY-AND-INVEST> 4059
<TOTAL-CURRENT-ASSETS> 45837
<TOTAL-DEFERRED-CHARGES> 3297
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 249684
<COMMON> 16582
<CAPITAL-SURPLUS-PAID-IN> 31202
<RETAINED-EARNINGS> 67835
<TOTAL-COMMON-STOCKHOLDERS-EQ> 115619
0
0
<LONG-TERM-DEBT-NET> 63000
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 4000
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 2000
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 65065
<TOT-CAPITALIZATION-AND-LIAB> 249684
<GROSS-OPERATING-REVENUE> 122836
<INCOME-TAX-EXPENSE> 8298
<OTHER-OPERATING-EXPENSES> 98372
<TOTAL-OPERATING-EXPENSES> 106670
<OPERATING-INCOME-LOSS> 16166
<OTHER-INCOME-NET> 2455
<INCOME-BEFORE-INTEREST-EXPEN> 18621
<TOTAL-INTEREST-EXPENSE> 2225
<NET-INCOME> 16396
0
<EARNINGS-AVAILABLE-FOR-COMM> 16396
<COMMON-STOCK-DIVIDENDS> 4452
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