SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 September 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 1-8809
SCANA Corporation
(Exact name of registrant as specified in its charter)
South Carolina 57-0784499
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1426 Main Street, Columbia, South Carolina 29201
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 803) 748-3000
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 .
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Section 12, 13 or 15(d) of
the Securities Exchange Act of 1934 subsequent to the distribution of
securities under a plan confirmed by a court.
Yes . No .
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
107,321,113 Common Shares, without par
value, as of September 30, 1997
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SCANA CORPORATION
INDEX
PART I. FINANCIAL INFORMATION Page
Item 1. Financial Statements
Consolidated Balance Sheets as of September 30, 1997
and December 31, 1996.................................... 3
Consolidated Statements of Income and Retained Earnings
for the Periods Ended September 30, 1997 and 1996........ 5
Consolidated Statements of Cash Flows for the Periods
Ended September 30, 1997 and 1996........................ 6
Notes to Consolidated Financial Statements............... 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations...................... 11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings........................................ 17
Item 6. Exhibits and Reports on Form 8-K......................... 17
Signatures........................................................ 18
Exhibit Index..................................................... 19
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PART I
FINANCIAL INFORMATION
SCANA CORPORATION
CONSOLIDATED BALANCE SHEETS
As of September 30, 1997 and December 31, 1996
(Unaudited)
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September 30, December 31,
1997 1996
(Thousands of Dollars)
ASSETS
Utility Plant:
Electric................................................... $4,195,555 $4,135,567
Gas........................................................ 546,298 540,196
Transit.................................................... 3,819 3,923
Common..................................................... 74,650 81,858
Total.................................................... 4,820,322 4,761,544
Less accumulated depreciation and amortization............. 1,589,025 1,517,847
Total.................................................... 3,231,297 3,243,697
Construction work in progress.............................. 293,813 219,150
Nuclear fuel, net of accumulated amortization.............. 53,457 41,006
Acquisition adjustment-gas, net of accumulated
amortization............................................. 24,427 25,175
Utility Plant, Net.................................... 3,602,994 3,529,028
Nonutility Property and Investments, net of accumulated
depreciation and depletion................................. 383,870 345,248
Current Assets:
Cash and temporary cash investments........................ 71,065 17,349
Receivables................................................ 246,439 239,286
Inventories (at average cost):
Fuel..................................................... 51,696 67,428
Materials and supplies................................... 51,002 49,449
Prepayments................................................ 15,914 13,276
Deferred income taxes...................................... 20,456 20,776
Total Current Assets.................................. 456,572 407,564
Deferred Debits:
Emission allowances........................................ 30,555 30,457
Environmental.............................................. 33,940 41,375
Nuclear plant decommissioning fund......................... 47,140 42,194
Pension asset, net......................................... 69,928 57,931
Other...................................................... 254,424 305,549
Total Deferred Debits................................. 435,987 477,506
Total....................................... $4,879,423 $4,759,346
See notes to consolidated financial statements.
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SCANA CORPORATION
CONSOLIDATED BALANCE SHEETS
As of September 30, 1997 and December 31, 1996
(Unaudited)
<S> <C> <S> <C> <C> <C>
September 30, December 31,
1997 1996
(Thousands of Dollars)
CAPITALIZATION AND LIABILITIES
Stockholders' Investment:
Common Equity:
Common stock (without par value)......................... $1,153,615 $1,125,282
Retained earnings........................................ 598,447 558,166
Net Unrealized Holding Gain on Securities................ 11,519 -
Total Common Equity..................................... 1,763,581 1,683,448
Preferred Stock of Subsidiary (not subject to purchase
or sinking funds)........................................ 126,027 26,027
Total Stockholders' Investment.......................... 1,889,608 1,709,475
Preferred Stock of Subsidiary, net (subject to purchase
or sinking funds).......................................... 40,093 43,014
Long-term debt, net.......................................... 1,494,956 1,581,608
Total Capitalization.................................. 3,424,657 3,334,097
Current Liabilities:
Short-term borrowings...................................... 59,794 144,599
Current portion of long-term debt.......................... 133,026 51,220
Current portion of preferred stock......................... 2,442 2,432
Accounts payable........................................... 128,309 157,475
Customer deposits.......................................... 17,462 16,122
Taxes accrued.............................................. 89,280 70,610
Interest accrued........................................... 33,468 25,609
Dividends declared......................................... 43,870 40,773
Other...................................................... 12,767 7,200
Total Current Liabilities............................. 520,418 516,040
Deferred Credits:
Deferred income taxes...................................... 598,587 577,509
Deferred investment tax credits............................ 81,366 84,100
Reserve for nuclear plant decommissioning.................. 47,140 42,194
Postretirement benefits.................................... 46,197 37,344
Other...................................................... 161,058 168,062
Total Deferred Credits................................ 934,348 909,209
Total....................................... $4,879,423 $4,759,346
See notes to consolidated financial statements.
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SCANA CORPORATION
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
For the Periods Ended September 30, 1997 and 1996
(Unaudited)
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Three Months Ended Nine Months Ended
September 30, September 30,
1997 1996 1997 1996
(Thousands of Dollars, Except Per Share Amounts)
OPERATING REVENUES:
Electric............................... $340,362 $329,038 $ 840,411 $ 860,565
Gas.................................... 77,814 72,329 294,000 284,347
Transit................................ 395 917 1,239 2,720
Total Operating Revenues........... 418,571 402,284 1,135,650 1,147,632
OPERATING EXPENSES:
Fuel used in electric generation....... 75,720 70,584 185,080 194,714
Purchased power........................ 2,909 3,381 7,434 9,137
Gas purchased for resale............... 54,301 50,504 192,387 191,090
Other operation........................ 62,063 60,594 173,854 174,507
Maintenance............................ 16,282 16,979 52,299 50,241
Depreciation and amortization.......... 38,036 37,054 114,578 109,901
Income taxes........................... 43,853 42,585 93,707 99,615
Other taxes............................ 24,794 22,877 73,766 68,868
Total Operating Expenses........... 317,958 304,558 893,105 898,073
OPERATING INCOME......................... 100,613 97,726 242,545 249,559
OTHER INCOME:
Allowance for equity funds used
during construction.................. 1,560 1,965 4,759 5,272
Other income, net of income taxes...... 5,094 2,133 11,796 18,428
Total Other Income................. 6,654 4,098 16,555 23,700
INCOME BEFORE INTEREST CHARGES AND
PREFERRED STOCK DIVIDENDS.............. 107,267 101,824 259,100 273,259
INTEREST CHARGES (CREDITS):
Interest expense....................... 31,398 32,085 95,584 97,036
Allowance for borrowed funds used
during construction.................. (1,631) (1,575) (4,726) (4,944)
Total Interest Charges, Net........ 29,767 30,510 90,858 92,092
INCOME BEFORE PREFERRED STOCK CASH
DIVIDENDS OF SUBSIDIARY................ 77,500 71,314 168,242 181,167
PREFERRED STOCK CASH DIVIDENDS OF
SUBSIDIARY (At stated rates)........... (2,916) (1,351) (6,736) (4,090)
NET INCOME............................... 74,584 69,963 161,506 177,077
RETAINED EARNINGS AT BEGINNING OF PERIOD. 564,377 528,192 558,166 497,991
COMMON STOCK CASH DIVIDENDS DECLARED..... (40,514) (38,793) (121,225) (115,706)
RETAINED EARNINGS AT END OF PERIOD....... $598,447 $559,362 $ 598,447 $ 559,362
NET INCOME............................... $ 74,584 $ 69,963 $ 161,506 $ 177,077
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING (THOUSANDS) ........ 107,321 105,447 106,984 104,812
EARNINGS PER WEIGHTED AVERAGE SHARE
OF COMMON STOCK........................ $ .69 $ .66 $ 1.51 $ 1.69
CASH DIVIDENDS DECLARED PER SHARE OF
COMMON STOCK.......................... $ .3775 $ .3675 $ .7550 $ 1.1025
See notes to consolidated financial statements.
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SCANA CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Periods Ended September 30, 1997 and 1996
(Unaudited)
<S> <C> <C> <C>
Nine Months Ended
September 30,
1997 1996
(Thousands of Dollars)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income............................................ $ 161,506 $ 177,077
Adjustments to reconcile net income to net cash
provided from operating activities:
Depreciation, depletion and amortization............ 133,935 135,875
Amortization of nuclear fuel........................ 16,266 13,282
Deferred income taxes, net.......................... 20,934 8,647
Pension asset....................................... (11,997) (11,167)
Over (under) collections, fuel adjustment clauses... 9,612 (2,025)
Allowance for funds used during construction........ (9,485) (10,216)
Amortization of early retirements................... 12,391 (4,766)
Changes in certain current assets and liabilities:
(Increase) decrease in receivables................. 2,811 (23,099)
(Increase) decrease in inventories................. 14,179 12,287
(Increase) decrease in prepayments................. (2,638) 2,248
Increase (decrease) in accounts payable............ (29,166) (22,404)
Increase (decrease) in taxes accrued............... 18,670 22,818
Increase (decrease) in interest accrued ........... 7,859 5,131
Other, net.......................................... 9,461 32,716
Net Cash Provided From Operating Activities............. 354,338 336,404
CASH FLOWS FROM INVESTING ACTIVITIES:
Utility property additions and construction
expenditures, net of AFC............................ (168,397) (151,428)
Increase in other property and investment............. (52,049) (104,041)
Sale of subsidiary assets............................. 8,384 42,554
Net Cash Used For Investing Activities.................. (212,062) (212,915)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds:
Issuance of notes and loans......................... 24,844 60,000
Issuance of other long-term debt.................... 1,200 -
Issuance of common stock............................ 30,201 53,231
Issuance of preferred stock......................... 99,000 -
Repayments:
Pollution control bonds............................. (120) -
First and Refunding Mortgage Bonds.................. (15,000) (22,000)
Redemption of notes................................. (10,096) (63,158)
Other long-term debt................................ (4,652) (1,318)
Preferred stock..................................... (2,911) (2,876)
Dividend payments:
Common stock........................................ (119,729) (114,217)
Preferred stock of subsidiary....................... (5,141) (4,111)
Short-term borrowings, net............................ (84,805) (9,002)
Fuel and emission allowance financings, net........... (1,351) (3,724)
Net Cash Used For Financing Activities.................. (88,560) (107,175)
NET INCREASE IN CASH AND TEMPORARY
CASH INVESTMENTS...................................... 53,716 16,314
CASH AND TEMPORARY CASH INVESTMENTS AT JANUARY 1........ 17,349 16,082
CASH AND TEMPORARY CASH INVESTMENTS AT SEPTEMBER 30..... $ 71,065 $ 32,396
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for - Interest (includes capitalized
interest of $4,726 and $4,944)....... $ 85,198 $ 89,596
- Income taxes.......................... 54,709 65,313
NONCASH INVESTING ACTIVITIES:
City of Charleston Franchise Fee...................... - 25,000
Exchange of interest in joint venture and certain
other assets with a book value of approximately
$24.4 million in exchange for preferred stock and
notes of buyer in 1997.
See notes to consolidated financial statements.
</TABLE>
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SCANA CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1997
(Unaudited)
The following notes should be read in conjunction with the
Notes to Consolidated Financial Statements appearing in SCANA
Corporation's Annual Report on Form 10-K for the year ended
December 31, 1996. These are interim financial statements and,
because of temperature variations between seasons of the year, the
amounts reported in the Consolidated Statements of Income are not
necessarily indicative of amounts expected for the year. In the
opinion of management, the information furnished herein reflects
all adjustments, all of a normal recurring nature, which are
necessary for a fair statement of the results for the interim
periods reported.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
A. Basis of Accounting
The Company accounts for its regulated utility operations,
assets and liabilities in accordance with the provisions of
Statement of Financial Accounting Standards No. 71 (SFAS 71).
The accounting standard requires cost-based rate-regulated
utilities, such as the Company, to recognize in their financial
statements revenues and expenses in different time periods than
do enterprises that are not rate-regulated. As a result the
Company has recorded, as of September 30, 1997, approximately
$226 million and $65 million of regulatory assets and
liabilities, respectively, including amounts recorded for
deferred income tax assets and liabilities of approximately
$107 million and $55 million, respectively. The electric
regulatory assets of approximately $77 million (excluding
deferred income tax assets) are being recovered through rates,
and the Public Service Commission of South Carolina (PSC) has
approved accelerated recovery of approximately $51 million of
these assets. In the future, as a result of deregulation or
other changes in the regulatory environment, the Company may
no longer meet the criteria for continued application of SFAS
71 and would be required to write off its regulatory assets and
liabilities. Such an event could have a material adverse
effect on the Company's results of operations in the period the
write-off is recorded, but it is not expected that cash flows
or financial position would be materially affected.
B. Reclassifications
Certain amounts from prior periods have been reclassified to
conform with the 1997 presentation.
2. RETAINED EARNINGS:
The Restated Articles of Incorporation of the Company do not
limit the dividends that may be payable on its common stock.
However, the Restated Articles of Incorporation of SCE&G and
the Indenture underlying certain of its bond issues contain
provisions that may limit the payment of cash dividends on
common stock. In addition, with respect to hydroelectric
projects, the Federal Power Act may require the appropriation
of a portion of the earnings therefrom. At September 30, 1997
approximately $20.8 million of SCE&G's retained earnings were
restricted as to payment of cash dividends on common stock.
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3. INVESTMENTS IN EQUITY SECURITIES:
SCANA Communications, Inc. (SCI), owns 4.5 million common
shares and 100,000 non-voting series B and 50,000 non-voting
series D convertible preferred shares of Powertel, Inc.
(Powertel), formerly InterCel, Inc., a publicly traded
telecommunications company which owns and operates personal
communications services (PCS) systems in major markets in the
southeast. The cost of such investments were approximately
$66.7 million, $75.1 million and $22.5 million, respectively.
Common shares were initially recorded at $14.85 per share.
Preferred series B shares are convertible in March 2002 at a
conversion price of $16.50 per common share or approximately
4.5 million common shares. Preferred series D shares are
convertible in March 2002 at a conversion price of $12.75 per
common share or approximately 1.7 million common shares.
Powertel common stock, which trades on NASDAQ, traded between
a high of $20 per share and a low of $12 1/2 per share during
the third quarter and closed at $19 on September 30, 1997,
resulting in a pretax unrealized holding gain of $18.7 million,
or $11.5 million after-tax. Such amount is shown in the
balance sheet as a separate line item under "Common Equity."
The market value of the convertible series B and series D
preferred shares of Powertel are not readily determinable.
However, on an as converted basis, the market value of the
underlying common shares for the series B preferred shares was
approximately $86.4 million at September 30, 1997, resulting
in an unrecorded pretax holding gain of $11.3 million, and the
market value of the underlying common shares for the series D
preferred shares was approximately $33.5 million on September
30, 1997, resulting in an unrecorded pretax holding gain of
$11.0 million. In the aggregate, on a fully converted basis,
SCI's pretax unrealized holding gains related to investments
in Powertel described above total $41 million.
In March 1997, SCI sold its interest in GulfStates Fibernet,
a Georgia general partnership (constituting SCI's remaining
interests in the GulfStates Fibernet joint venture), and
certain fiber optic assets of SCI located within the State of
Georgia, to ITC Holding Company Inc. (ITC), a Georgia-based
telecommunications company and an affiliate of Powertel, in
exchange for 588,411 shares of series A convertible preferred
stock of ITC (ITC Preferred) and a subordinated note of ITC.
As part of an earnout provision related to the GulfStates
Fibernet transaction and the receipt of ITC Preferred through
the earnout provision, SCI received in October 1997 56,742
additional shares of ITC Preferred. After giving effect to the
GulfStates Fibernet transaction, SCI held 774,617 shares of
common stock of ITC and 645,153 shares of ITC Preferred with
book values of approximately $16.1 million and $20.1 million,
respectively.
On October 20, 1997, as part of a reorganization, ITC
transferred to its shareholders, including SCI, one share of
common stock of its ITC West Point, Inc. subsidiary for each
whole share of ITC common stock owned by each shareholder. ITC
West Point, Inc. changed its name to ITC Holding Company, Inc.
(New ITC) subsequent to ITC's merger described in the following
paragraph. In addition, SCI received one share of series A
convertible preferred stock of New ITC for each share of ITC
Preferred owned by SCI.
ITC merged with ITC DeltaCom, Inc. (ITCD), a Georgia-based
telecommunications company and an affiliate of Powertel, on
October 20, 1997. Through the merger, SCI received
approximately 1,784,724 shares, representing approximately
7.4%, of ITCD common stock, and 1,486,440 shares of series A
preferred stock of ITCD convertible in March 2002 into
1,486,440 shares of ITCD common stock. ITCD common stock,
which began trading on NASDAQ on October 24, 1997, closed at
$19 1/8 per share on November 4, 1997, indicating a market
value for SCI's ITCD common stock of approximately $34.1
million. The market value of series A preferred stock of ITCD
is not readily determinable. However, on an as converted basis
the market value of the underlying common stock for the series
A preferred stock was approximately $28.4 million at November
4, 1997.
Knology Holding, Inc. (Knology), also an affiliate of Powertel,
is developing a system which will provide interactive video,
voice and data services for broadband systems in certain
southeastern markets. In lieu of SCI's previous
commitment to provide a $40 million construction credit
facility to Knology discussed in the prior quarterly report on
Form 10-Q, SCI on October 22, 1997 purchased from Knology
71,050 units, each consisting of one 11.875% Senior Discount
Note (Note) due 2007 and one Warrant to purchase preferred
stock of Knology. The purchase price of the units was
approximately $40 million. The Notes are unsecured obligations
of Knology which mature on October 15, 2007. Each Note has an
initial accreted value of $562.92 and will accrete to its face
value of $1,000 on October 15, 2002. Interest will be paid
semi-annually beginning April 15, 2003. The Notes are
redeemable at any time on or
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after October 15, 2002, at the option of Knology, in whole or
in part at 105.9375% of their principal amount at maturity,
plus accrued interest, declining ratably to 100% of their
principal amount at maturity plus accrued interest on and
after October 15, 2004. In addition, with certain
restrictions, up to 35% of the aggregate principal amount at
maturity of the Notes may be redeemed from the proceeds of one
or more public equity offerings at 111.875% of their accreted
value on the redemption date. Each Warrant entitles the holder
to purchase .003734 shares of preferred stock of Knology at an
exercise price of $.01 per share. Warrants may be exercised
at any time from October 22, 1998 to October 22, 2007. In
addition to the acquisition of the Knology units Knology has
agreed to issue to SCI warrants to purchase 753 shares of
preferred stock at $1,500 per share and SCI has invested $5
million to purchase 3,334 shares of preferred stock of Knology.
The preferred stock of Knology is automatically convertible
into common stock of Knology at the rate of one share of the
common stock for each share of preferred stock: (a) upon the
registration under the Securities Act of any shares of common
stock, or (b) on December 8, 2005. As a result of these
transactions SCI owns approximately 7% of the outstanding
preferred stock of Knology, without taking into account the
effect of exercising the Warrants.
4. CONTINGENCIES:
A. Nuclear Insurance
The Price-Anderson Indemnification Act, which deals with the
Company's public liability for a nuclear incident, currently
establishes the liability limit for third-party claims
associated with any nuclear incident at $8.9 billion. Each
reactor licensee is currently liable for up to $79.3 million
per reactor owned for each nuclear incident occurring at any
reactor in the United States, provided that not more than $10
million of the liability per reactor would be assessed per
year. SCE&G's maximum assessment, based on its two-thirds
ownership of Summer Station, would be approximately $52.9
million per incident, but not more than $6.7 million per year.
SCE&G currently maintains policies (for itself and on behalf
of the South Carolina Public Service Authority) with American
Nuclear Insurers (ANI) and Nuclear Electric Insurance Limited
(NEIL) providing combined property and decontamination
insurance coverage of $2.0 billion for any losses at Summer
Station. SCE&G pays annual premiums and, in addition, could
be assessed a retroactive premium assessment not to exceed five
times its annual premium in the event of property damage loss
to any nuclear generating facility covered under the NEIL
program. Based on the current annual premium, this retroactive
premium assessment would not exceed $5.7 million.
To the extent that insurable claims for property damage,
decontamination, repair and replacement and other costs and
expenses arising from a nuclear incident at Summer Station
exceed the policy limits of insurance, or to the extent such
insurance becomes unavailable in the future, and to the extent
that SCE&G's rates would not recover the cost of any purchased
replacement power, SCE&G will retain the risk of loss as a
self-insurer. SCE&G has no reason to anticipate a serious
nuclear incident at Summer Station. If such an incident were
to occur, it could have a material adverse impact on the
Company's results of operations, cash flows and financial
position.
B. Environmental
The Company has an environmental assessment program to identify
and assess current and former operations sites that could
require environmental cleanup. As site assessments are
initiated an estimate is made of the amount of expenditures,
if any, necessary to investigate and clean up each site. These
estimates are refined as additional information becomes
available; therefore, actual expenditures could differ
significantly from the original estimates. Amounts estimated,
accrued and actually expended to date for site assessments and
cleanup relate primarily to regulated operations; such amounts
are deferred and are being amortized and recovered through
rates over a five-year period for electric operations and an
eight-year period for gas operations. The Company has also
recovered portions of its environmental liabilities through
settlements with various insurance carriers. At September 30,
1997, the balance of the deferral, net of amounts recovered
through rates and insurance settlements received to date, was
approximately $33.9 million. The deferral includes the costs
estimated to be associated with the matters discussed below.
In September 1992 the Environmental Protection Agency
(EPA) notified SCE&G, the City of Charleston and the
Charleston Housing Authority of their potential
liability for the investigation and cleanup of the
Calhoun Park area site in Charleston, South Carolina.
This site originally encompassed approximately 18
acres and included properties which were the
locations for industrial operations, including a wood
preserving (creosote) plant and one of SCE&G's
decommissioned manufactured gas plants. The original
scope of this investigation
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has been expanded to approximately 30 acres,
including adjacent properties owned by the National
Park Service, the City of Charleston and private
properties. The site has not been placed on the
National Priority List, but may be added before
cleanup is initiated. The potentially responsible
parties (PRP) have agreed with the EPA to participate
in an innovative approach to site investigation and
cleanup called "Superfund Accelerated Cleanup Model,"
allowing the pre-cleanup site investigation process
to be compressed significantly. The PRPs have
negotiated an administrative order by consent for the
conduct of a Remedial Investigation/Feasibility Study
and a corresponding Scope of Work. Field work began
in November 1993 and the EPA conditionally approved
a Remedial Investigation Report in March 1997. SCE&G
is continuing to investigate cost-effective cleanup
methodologies.
In October 1996 the City of Charleston and SCE&G
settled all environmental claims the City may have
had against SCE&G involving the Calhoun Park area for
a payment of $26 million over four years (1996-1999)
by SCE&G to the City. SCE&G is recovering the amount
of the settlement, which does not encompass site
assessment and cleanup costs, in the same manner as
other amounts accrued for site assessments and
cleanup as discussed above. As part of the
environmental settlement, SCE&G has agreed to
construct an 1,100 space parking garage on the
Calhoun Park site and to transfer the facility to the
City in exchange for a 20-year municipal bond backed
by revenues from the parking garage and a mortgage on
the parking garage. The total amount of the bond is
not to exceed $16.9 million, the maximum expected
project cost.
SCE&G owns three other decommissioned manufactured
gas plant sites which contain residues of by-product
chemicals. SCE&G is actively investigating the sites
to monitor the nature and extent of the residual
contamination.
C. SCANA Communications, Inc. Matters
SCI, as a result of an internal audit, informed the Federal
Communications Commission (FCC) that it violated certain
licensing requirements in establishing and operating an 800 Mhz
radio system in South Carolina for public safety and utility
use. As a result, SCI has returned to the FCC several licenses
obtained in violation of FCC rules and the FCC is conducting
an investigation of the system. The Company does not believe
that the resolution of this issue will have a material impact
on its results of operations, cash flows or financial position.
D. YEAR 2000
The Company is currently evaluating the impact of the year 2000
on its computer systems and applications and is nearing
completion of an impact assessment. The Company has also begun
evaluating embedded processors located in field operations
areas for the purpose of identifying those that will have to
be modified or replaced. The Company believes that all required
modifications and replacements can be implemented in time to
prevent problems with financial or operational systems related
to date codes. Although an estimate of the cost of the required
charges is not available at this time, management expects the
evaluation of this issue to be completed by early 1998.
5. SUBSEQUENT EVENTS
A. Sale of Subsidiary
On October 22, 1997 the Company entered into a definitive
agreement to sell the assets of SCANA Petroleum Resources, Inc.
(SPR), its wholly-owned oil and natural gas exploration and
production subsidiary, to Kelley Oil and Gas Corporation for
$110 million which is in excess of book value. Proceeds from
the sale may be used to purchase share of the Company's
outstanding common stock, retire debt or for other corporate
purposes.
B. Issuance of Securities
On October 28, 1997 SCE&G Trust I (the "Trust"), a Delaware
statutory business trust and a subsidiary of SCE&G, issued $50
million of 7.55% trust preferred securities. The Trust used
the proceeds from the sale to purchase unsecured 7.55% junior
subordinated debentures of SCE&G. SCE&G will use the funds to
redeem certain series of its preferred stock. The financial
statements of the Trust will be consolidated with those of the
Company.
10
<PAGE>
SCANA CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General
Competition
The electric utility industry has begun a major transition
that could lead to expanded market competition and less regulation.
Deregulation of electric wholesale and retail markets is creating
opportunities to compete for new and existing customers and
markets. As a result, profit margins and asset values of some
utilities could be adversely affected. Legislative initiatives at
the Federal and state levels are being considered and, if enacted,
could mandate market deregulation. The pace of deregulation,
future prices of electricity, and the regulatory actions which may
be taken by the PSC and the Federal Energy Regulatory Commission
(FERC) in response to the changing environment cannot be predicted.
However, recent FERC actions will likely accelerate competition
among electric utilities by providing for wholesale transmission
access. In April 1996 the FERC issued Order 888, which addresses
open access to transmission lines and stranded cost recovery.
Order 888 requires utilities under FERC jurisdiction that own,
control or operate transmission lines to file nondiscriminatory
open access tariffs that offer to others the same transmission
service they provide themselves. The FERC has also permitted
utilities to seek recovery of wholesale stranded costs from
departing customers by direct assignment. Approximately five
percent of the Company's electric revenues is under FERC
jurisdiction.
The Company is aggressively pursuing actions to position
itself strategically for the transformed environment. To enhance
its flexibility and responsiveness to change, the Company's
electric and gas utility, SCE&G, operates Strategic Business Units.
Maintaining a competitive cost structure is of paramount importance
in the utility's strategic plan. SCE&G has undertaken a variety of
initiatives, including reductions in operation and maintenance
costs and in staffing levels, the accelerated recovery of SCE&G's
electric regulatory assets and the shift, for retail ratemaking
purposes only, of depreciation reserves from transmission and
distribution assets to nuclear production assets. SCE&G has also
established open access transmission tariffs and is selling bulk
power to wholesale customers at market-based rates. Significant
investments are being made in customer and management information
systems. Marketing of services to commercial and industrial
customers has been increased significantly. SCE&G has obtained
long term power supply contracts with a significant portion of its
industrial customers. The Company believes that these actions as
well as numerous others that have been and will be taken
demonstrate its ability and commitment to succeed in the new
operating environment to come.
Regulated public utilities are allowed to record as assets some
costs that would be expensed by other enterprises. If deregulation
or other changes in the regulatory environment occur, the Company
may no longer be eligible to apply this accounting treatment and
may be required to eliminate such regulatory assets from its
balance sheet. Although the potential effects of deregulation
cannot be determined at present, discontinuation of the accounting
treatment could have a material adverse effect on the Company's
results of operations in the period the write-off is recorded. It
is expected that cash flows and the financial position of the
Company would not be materially affected by the discontinuation of
the accounting treatment. The Company reported approximately $226
million and $65 million of regulatory assets and liabilities,
respectively, including amounts recorded for deferred income tax
assets and liabilities of approximately $107 million and $55
million, respectively, on its balance sheet at September 30, 1997.
Material Changes in Capital Resources and Liquidity
Since December 31, 1996
Liquidity and Capital Resources
The cash requirements of the Company arise primarily from
SCE&G's operational needs, the Company's construction program and
the need to fund the activities or investments of the Company's
nonregulated subsidiaries. The ability of the Company's regulated
subsidiaries to replace existing plant investment, as well as to
expand to meet future demands for electricity and gas, will depend
upon their ability to attract the necessary financial capital on
reasonable terms. The Company's regulated subsidiaries recover the
costs of providing services through rates charged to customers.
Rates for regulated services are generally based on historical
costs. As customer growth and inflation occur and the regulated
subsidiaries continue their ongoing construction programs, it is
necessary to seek increases in rates. As a result, the Company's
future financial position and results of operations will be
affected by the regulated subsidiaries' ability to obtain adequate
and timely rate and other regulatory relief.
11
<PAGE>
On January 9, 1996 the PSC issued an order granting SCE&G an
increase in retail electric rates of 7.34% which produces
additional revenues of approximately $67.5 million annually. The
increase was implemented in two phases. The first phase, an
increase in revenues of approximately $59.5 million annually based
on a test year, or 6.47%, commenced in January 1996. The second
phase, an increase in revenues of approximately $8.0 million
annually or .87%, based on a test year, was implemented in January
1997. The PSC authorized a return on common equity of 12.0%. The
PSC also approved establishment of a Storm Damage Reserve Account
capped at $50 million to be collected through rates over a ten-year
period. Additionally, the PSC approved accelerated recovery of a
significant portion of SCE&G's electric regulatory assets
(excluding deferred income tax assets) and the remaining transition
obligation for postretirement benefits other than pensions,
changing the amortization periods to allow recovery by the end of
the year 2000. SCE&G's request to shift, for ratemaking purposes,
approximately $257 million of depreciation reserves from
transmission and distribution assets to nuclear production assets
was also approved. The PSC's ruling does not apply to wholesale
electric revenues under the FERC's jurisdiction, which constitutes
approximately 5% of the Company's electric revenues. The FERC has
rejected the transfer of depreciation reserves for rates subject to
its jurisdiction.
The following table summarizes how the Company generated funds
for its property acquisitions and utility property additions and
construction expenditures during the nine months ended September
30, 1997 and 1996:
Nine Months Ended
September 30,
1997 1996
(Thousands of Dollars)
Net cash provided from operating activities $354,338 $ 336,404
Net cash used for financing activities (88,560) (107,175)
Cash provided from sale of oil and gas properties - 42,554
Cash provided from sale of subsidiary assets 8,384 -
Cash and temporary cash investments available
at the beginning of the period 17,349 16,082
Net cash available for property acquisitions
and utility property additions and
construction expenditures $291,511 $ 287,865
Funds used for utility property additions
and construction expenditures, net of
noncash allowance for funds used during
construction $168,397 $ 151,428
Funds used for nonutility property
additions $ 22,809 $ 23,042
On January 12, 1996 SCANA closed on unsecured bank loans
totaling $60 million due January 10, 1997, and used the proceeds to
pay off a loan in a like total amount. On January 10, 1997 SCANA
refinanced the loans with unsecured bank loans totaling $60 million
due January 9, 1998 at initial interest rates between 5.995% and
6.031%, at a fixed 12-month LIBOR plus a spread of 10 to 12 1/2
basis points.
On February 12, 1997 SCANA closed on the sale of $25 million
of Medium-Term Notes having an annual interest rate of 6.9% and
maturing February 15, 2007. These funds were used to reduce short-
term borrowings at SCANA.
On April 24, 1997 SCE&G sold 1,000,000 shares of 6.52%
cumulative preferred stock $100 par value. Net proceeds from the
sale were used to reduce short-term indebtedness incurred for
SCE&G's construction program and for general corporate purposes.
On October 28, 1997 SCE&G Trust I (the "Trust"), a Delaware
statutory business trust and a subsidiary of SCE&G, issued $50
million of 7.55% trust preferred securities. The Trust used the
proceeds from the sale to purchase unsecured 7.55% junior
subordinated debentures of SCE&G. SCE&G will use the funds to
redeem certain series of its preferred stock. The financial
statements of the Trust will be consolidated with those of the
Company.
12
<PAGE>
On August 7, 1996 the City of Charleston executed 30-year
electric and gas franchise agreements with SCE&G. In consideration
for the electric franchise agreement, SCE&G will pay the City $25
million over seven years (1996-2002) and has donated to the City
the existing transit assets in Charleston. In settlement of
environmental claims the City may have had against SCE&G involving
the Calhoun Park area, where SCE&G and its predecessor companies
operated a manufactured gas plant until the 1960's, SCE&G will pay
the City $26 million over a four-year period (1996-1999). As part
of the environmental settlement, SCE&G has agreed to construct an
1,100 space parking garage on the Calhoun Park site and to transfer
the facility to the City in exchange for a 20-year municipal bond
backed by revenues from the parking garage and a mortgage on the
parking garage. The total amount of the bond is not to exceed
$16.9 million, the maximum expected project cost.
The Company and Westvaco Corporation have formed a limited
liability company, Cogen South LLC, to build and operate a $170
million cogeneration facility at Westvaco's Kraft Division Paper
Mill in North Charleston, South Carolina. The Company and Westvaco
each own a 50% interest in the LLC. The facility will provide
industrial process steam for the Westvaco paper mill and shaft
horsepower to enable SCE&G to generate up to 99 megawatts of
electricity. Construction financing is being provided to Cogen
South LLC by banks. A $15 million capital contribution to the LLC
by each partner is expected prior to operation of the facility. In
addition to the cogeneration LLC, Westvaco has entered into a 20-
year contract with SCE&G for all its electricity requirements at
the North Charleston mill at SCE&G's standard industrial rate.
Construction of the plant began in September 1996 and it is
expected to be operational in the fall of 1998.
SCI holds an approximate 17% interest in the common stock of
Powertel, a publicly traded telecommunications company which owns
Personal Communications Services (PCS) licenses for the Birmingham,
Alabama; Jacksonville, Florida; Atlanta, Georgia; and Memphis,
Tennessee/Jackson, Mississippi Major Trading Areas (MTAs) and
thirteen Basic Trading Areas (BTAs) in Kentucky, Indiana and
Tennessee. SCI also holds $97.6 million of non-voting convertible
preferred stock of Powertel, which is convertible into Powertel
common stock in March 2002.
In March 1997, SCI sold its interest in GulfStates Fibernet,
a Georgia general partnership (constituting SCI's remaining
interests in the GulfStates Fibernet joint venture), and certain
fiber optic assets of SCI located within the State of Georgia, to
ITC Holding Company Inc. (ITC), a Georgia-based telecommunications
company and an affiliate of Powertel, in exchange for 588,411
shares of series A convertible preferred stock of ITC (ITC
Preferred) and a subordinated note of ITC. As part of an earnout
provision related to the GulfStates Fibernet transaction and the
receipt of ITC Preferred through the earnout provision, SCI
received in October 1997 56,742 additional shares of ITC Preferred.
On October 20, 1997, as part of a reorganization, ITC
transferred to its shareholders, including SCI, one share of common
stock of its ITC West Point, Inc. subsidiary for each whole share
of ITC common stock owned by each shareholder. ITC West Point,
Inc. changed its name to ITC Holding Company, Inc. (New ITC)
subsequent to ITC's merger described in the following paragraph.
In addition, SCI received one share of series A convertible
preferred stock of New ITC for each share of ITC Preferred owned by
SCI.
ITC merged with ITC DeltaCom, Inc. (ITCD), a Georgia-based
telecommunications company and an affiliate of Powertel, on October
20, 1997. Through the merger, SCI received approximately 1,784,724
shares, representing approximately 7.4%, of ITCD common stock, and
1,486,440 shares of series A preferred stock of ITCD convertible in
March 2002 into 1,486,440 shares of ITCD common stock.
Knology Holding, Inc. (Knology), also an affiliate of
Powertel, is developing a system which will provide interactive
video, voice and data services for broadband systems in certain
southeastern markets. In lieu of the Company's previous commitment
to provide a $40 million construction credit facility to Knology
discussed in the prior quarterly report on Form 10-Q, SCI on
October 22, 1997 purchased from Knology 71,050 units, each
consisting of one 11.875% Senior Discount Note (Note) due 2007 and
one Warrant to purchase preferred stock of Knology. The purchase
price of the units was approximately $40 million. In addition to
the acquisition of the Knology units, SCI has invested $5 million
to purchase 3,334 shares of preferred stock of Knology and Knology
has agreed to issue to SCI warrants to purchase 753 shares of
preferred stock at $1,500 per share.
In September 1996 SCI, as a result of an internal audit,
informed the FCC that it violated certain licensing requirements in
establishing and operating an 800 Mhz radio system in South
Carolina for public safety and utility use. As a result, SCI has
returned to the FCC several licenses obtained in violation of FCC
rules and the FCC is conducting an investigation of the system.
The Company does not believe that the resolution of this issue will
have a material impact on its results of operations, cash flows or
financial position.
13
<PAGE>
On October 22, 1997 the Company entered into a definitive
agreement to sell the assets of SCANA Petroleum Resources, Inc.
(SPR), its wholly-owned oil and natural gas exploration and
production subsidiary, to Kelley Oil and Gas Company for $110
million which is in excess of book value. Proceeds from the sale
may be used to purchase shares of the Company's outstanding common
stock, retire debt or for other corporate purposes.
The Company anticipates that the remainder of its 1997 cash
requirements will be met through internally generated funds, the
sales of additional equity securities and medium-term notes and the
incurrence of additional short-term and long-term indebtedness.
The timing and amount of such financing will depend upon market
conditions and other factors. The Company expects that it has or
can obtain adequate sources of financing to meet its cash
requirements for the next twelve months and for the foreseeable
future. The ratio of earnings to fixed charges for the twelve
months ended September 30, 1997 was 3.45.
The Company is currently evaluating the impact of the year 2000 on
its computer systems and applications and is nearing completion of
an impact assessment. The Company has also begun evaluating
embedded processors located in field operations areas for the
purpose of identifying those that will have to be modified or
replaced. The Company believes that all required modifications and
replacements can be implemented in time to prevent problems with
financial or operational systems related to date codes. Although an
estimate of the cost of the required charges is not available at
this time, management expects the evaluation of this issue to be
completed by early 1998.
14
<PAGE>
SCANA CORPORATION
Results of Operations
For the Three and Nine Months ended September 30, 1997
As Compared to the Corresponding Periods in 1996
Earnings and Dividends
Net income for the three months ended September 30, 1997
increased approximately $4.6 million when compared to the
corresponding period in 1996. The increase in the electric margin
attributable primarily to customer growth and other economic
factors, more than offset the impact of higher operating costs.
Net income for the nine months ended September 30, 1997
decreased approximately $15.6 million when compared to the
corresponding period in 1996. A lower electric margin, resulting
from milder weather in the current period, was a primary factor for
the drop in earnings. Operating results at SPR also contributed to
the decline in earnings. SPR's net income decreased by $3.8
million, primarily as a result of lower production volumes and
lower gas prices. A non-recurring after-tax gain of $5.2 million
reported by SCI as a result of the business combination of Powertel
PCS Partners and Powertel in February 1996 is included in net
income for the nine months ended September 30, 1996.
Allowance for funds used during construction (AFC) is a
utility accounting practice whereby a portion of the cost of both
equity and borrowed funds used to finance construction (which is
shown on the balance sheet as construction work in progress) is
capitalized. Both the equity and the debt portions of AFC are
noncash items of nonoperating income which have the effect of
increasing reported net income. AFC represented approximately 4%
of income before income taxes for the nine months ended September
30, 1997 and 1996.
On February 18, 1997 the Company's Board of Directors
declared a quarterly dividend on common stock of 37 3/4 cents per
share, for the quarter ended March 31, 1997. The dividend was paid
on April 1, 1997 to common stockholders of record on March 10,
1997.
On April 24, 1997 the Company's Board of Directors declared a
quarterly dividend on common stock of 37 3/4 cents per share for
the quarter ended June 30, 1997. The dividend was paid on July 1,
1997 to common stockholders of record on June 10, 1997.
On August 20, 1997 the Company's Board of Directors declared
a quarterly dividend on common stock of 37 3/4 cents per share for
the quarter ended September 30, 1997. The dividend was paid on
October 1, 1997 to common stockholders of record on September 10,
1997.
On October 21,, 1997 the Company's Board of Directors
authorized the payment of a dividend on common stock of 37 3/4
cents per share for the quarter ended December 31, 1997. The
dividend is payable on January 1, 1998 to common stockholders of
record on December 10, 1997.
Sales Margins
The changes in the electric sales margins for the three and
nine months ended September 30, 1997, when compared to the
corresponding periods in 1996, were as follows:
Three Months Nine Months
Change % Change Change % Change
(Millions) (Millions)
Electric operating revenues $ 11.3 3.4 $(20.1) (2.3)
Less: Fuel used in electric
generation 5.1 7.3 (9.6) (5.0)
Purchased power (0.5) (14.0) (1.7) (18.6)
Margin $ 6.7 $ (8.8) (1.3)
The electric sales margin increased for the three months ended
September 30, 1997 when compared to the corresponding period of
1996 primarily as a result of economic and customer growth.
The electric sales margin decreased for the nine months ended
September 30, 1997, when compared to the corresponding period in
1996 as a result of the effect of milder weather which more than
offset the favorable impact of the rate increases placed into
effect in January 1996 and January 1997 and economic growth
factors.
15
<PAGE>
The changes in the gas sales margins for the three and nine
months ended September 30, 1997, when compared to the corresponding
periods in 1996, were as follows:
Three Months Nine Months
Change % Change Change % Change
(Millions) (Millions)
Gas operating revenues $5.5 7.6 $9.7 3.4
Less: Gas purchased for resale 3.8 7.5 1.3 0.7
Margin $1.7 7.7 $8.4 9.0
The gas sales margins increased for the three and nine
months ended September 30, 1997, when compared to the
corresponding periods in 1996. Increased transmission sales to
electric generating stations and higher margins on sales to
interruptible customers were a primary factor accounting for the
increase in the margin for the third quarter of 1997. On a year-
to-date basis, increased sales to interruptible customers,
attributable to fewer curtailments and higher system capacity
from a pipeline expansion completed in 1996, more than offset the
impact of milder weather.
Other Operating Expenses
Changes in other operating expenses, including taxes, for
the three and nine months ended September 30, 1997, when compared
to the corresponding periods in 1996, are presented in the
following table:
Three Months Nine Months
Change % Change Change % Change
(Millions) (Millions)
Other operation and maintenance $0.8 1.0 $ 1.4 0.6
Depreciation and amortization 1.0 2.7 4.7 4.2
Income taxes 1.3 3.0 (5.9) (5.9)
Other taxes 1.9 8.4 5.0 7.1
Total $5.0 2.7 $ 5.1 1.0
Other operation and maintenance expenses for the three and
nine months ended September 30, 1997 increased only slightly from
1996 levels. A decrease in transit operating costs resulting from
the Company's transfer of the ownership of the Charleston transit
system to the City of Charleston in October 1996 largely offset
increases in costs at electric generating plants and other
operating costs. The increases in depreciation and amortization
expenses for the three and nine months' comparisons reflect the
addition of the Cope Plant and other additions to plant in service.
The changes in income tax expense reflect changes in operating
income. The increases in other taxes results primarily from the
accrual of additional property taxes, beginning in January 1997,
related to the Cope Plant and other property additions and
partially offset by a reduction in the 1997 property tax
assessment. Recovery of the Cope Plant property taxes is provided
for in a retail electric rate increase that became effective in
January 1997.
Other Income
Other income, net of income taxes, for the nine months ended
September 30, 1997 decreased approximately $6.6 million when
compared to the corresponding period of 1996. The principal
factors accounting for the drop in other income are the
nonrecurring gain reported by SCI and the operating performance of
SPR. See "Earnings and Dividends."
16
<PAGE>
SCANA CORPORATION
Part II
OTHER INFORMATION
Item 1. Legal Proceedings
For information regarding legal proceedings see Note 2
"Rate Matters," appearing in the Company's Annual Report
on Form 10-K for the year ended December 31, 1996, and
Note 4 "Contingencies" of Notes to Consolidated Financial
Statements appearing in this Quarterly Report on Form 10-
Q.
Items 2, 3, 4 and 5 are not applicable.
Item 6. Exhibits and Reports on Form 8-K
A. Exhibits
Exhibits filed with this Quarterly Report on Form 10-Q are
listed in the following Exhibit Index. Certain of such
exhibits which have heretofore been filed with the
Securities and Exchange Commission and which are
designated by reference to their exhibit numbers in prior
filings are hereby incorporated herein by reference and
made a part hereof.
B. Reports on Form 8-K
None
17
<PAGE>
SCANA CORPORATION
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.
SCANA CORPORATION
(Registrant)
November 13, 1997 By: s/K. B. Marsh
K. B. Marsh, Vice President - Finance,
Chief Financial Officer and Controller
18
<PAGE>
SCANA CORPORATION
EXHIBIT INDEX Sequentially
Numbered
Pages
Number
2. Plan of Acquisition, Reorganization, Arrangement,
Liquidation or Succession
Not Applicable
3. Articles of Incorporation and By-Laws
A. Restated Articles of Incorporation of SCANA
Corporation as adopted on April 26, 1989
(Exhibit 3-A to Registration Statement
No. 33-49145)........................................... #
B. Articles of Amendment dated April 27, 1995
(Exhibit 4-B to Registration Statement No.
33-62421)............................................... #
C. Copy of By-Laws of SCANA Corporation as revised
and amended on June 18, 1996 (Exhibit 4-B to
Registration Statement No. 333-18149).................... #
4. Instruments Defining the Rights of Security Holders,
Including Indentures
A. Articles of Exchange of South Carolina
Electric & Gas Company and SCANA Corporation
(Exhibit 4-A to Post-Effective Amendment No. 1
to Registration Statement No. 2-90438).................. #
B. Indenture dated as of November 1, 1989 to
The Bank of New York, Trustee (Exhibit 4-A
to Registration No. 33-32107)........................... #
C. Indenture dated as of January 1, 1945, from
the South Carolina Power Company (the "Power
Company") to Central Hanover Bank and Trust
Company, as Trustee, as supplemented by three
Supplemental Indentures dated respectively as
of May 1, 1946, May 1, 1947 and July 1, 1949
(Exhibit 2-B to Registration No. 2-26459)............... #
D. Fourth Supplemental Indenture dated as of
April 1, 1950, to Indenture referred to in
Exhibit 4C, pursuant to which the Company
assumed said Indenture (Exhibit 2-C to
Registration No. 2-26459)............................... #
E. Fifth through Fifty-second Supplemental
Indentures referred to in Exhibit 4C dated
as of the dates indicated below and filed
as exhibits to the Registration Statements
and 1934 Act reports whose file numbers are
set forth below......................................... #
# Incorporated herein by reference as indicated.
19
<PAGE>
SCANA CORPORATION
EXHIBIT INDEX
Number
December 1, 1950 Exhibit 2-D to Registration No. 2-26459
July 1, 1951 Exhibit 2-E to Registration No. 2-26459
June 1, 1953 Exhibit 2-F to Registration No. 2-26459
June 1, 1955 Exhibit 2-G to Registration No. 2-26459
November 1, 1957 Exhibit 2-H to Registration No. 2-26459
September 1, 1958 Exhibit 2-I to Registration No. 2-26459
September 1, 1960 Exhibit 2-J to Registration No. 2-26459
June 1, 1961 Exhibit 2-K to Registration No. 2-26459
December 1, 1965 Exhibit 2-L to Registration No. 2-26459
June 1, 1966 Exhibit 2-M to Registration No. 2-26459
June 1, 1967 Exhibit 2-N to Registration No. 2-29693
September 1, 1968 Exhibit 4-O to Registration No. 2-31569
June 1, 1969 Exhibit 4-C to Registration No. 33-38580
December 1, 1969 Exhibit 4-Q to Registration No. 2-35388
June 1, 1970 Exhibit 4-R to Registration No. 2-37363
March 1, 1971 Exhibit 2-B-17 to Registration No. 2-40324
January 1, 1972 Exhibit 4-C to Registration No. 33-38580
July 1, 1974 Exhibit 2-A-19 to Registration No. 2-51291
May 1, 1975 Exhibit 4-C to Registration No. 33-38580
July 1, 1975 Exhibit 2-B-21 to Registration No. 2-53908
February 1, 1976 Exhibit 2-B-22 to Registration No. 2-55304
December 1, 1976 Exhibit 2-B-23 to Registration No. 2-57936
March 1, 1977 Exhibit 2-B-24 to Registration No. 2-58662
May 1, 1977 Exhibit 4-C to Registration No. 33-38580
February 1, 1978 Exhibit 4-C to Registration No. 33-38580
June 1, 1978 Exhibit 2-A-3 to Registration No. 2-61653
April 1, 1979 Exhibit 4-C to Registration No. 33-38580
June 1, 1979 Exhibit 4-C to Registration No. 33-38580
April 1, 1980 Exhibit 4-C to Registration No. 33-38580
June 1, 1980 Exhibit 4-C to Registration No. 33-38580
December 1, 1980 Exhibit 4-C to Registration No. 33-38580
April 1, 1981 Exhibit 4-D to Registration No. 33-49421
June 1, 1981 Exhibit 4-D to Registration No. 2-73321
March 1, 1982 Exhibit 4-D to Registration No. 33-49421
April 15, 1982 Exhibit 4-D to Registration No. 33-49421
May 1, 1982 Exhibit 4-D to Registration No. 33-49421
December 1, 1984 Exhibit 4-D to Registration No. 33-49421
December 1, 1985 Exhibit 4-D to Registration No. 33-49421
June 1, 1986 Exhibit 4-D to Registration No. 33-49421
February 1, 1987 Exhibit 4-D to Registration No. 33-49421
September 1, 1987 Exhibit 4-D to Registration No. 33-49421
January 1, 1989 Exhibit 4-D to Registration No. 33-49421
January 1, 1991 Exhibit 4-D to Registration No. 33-49421
February 1, 1991 Exhibit 4-D to Registration No. 33-49421
July 15, 1991 Exhibit 4-D to Registration No. 33-49421
# Incorporated herein by reference as indicated.
20
<PAGE>
SCANA CORPORATION
EXHIBIT INDEX
Sequentially
Numbered
Pages
Number
August 15, 1991 Exhibit 4-D to Registration No. 33-49421
April 1, 1993 Exhibit 4-E to Registration No. 33-49421
July 1, 1993 Exhibit 4-D to Registration No. 33-57955
F. Indenture dated as of April 1, 1993 from
South Carolina Electric & Gas Company to
NationsBank of Georgia, National Association
(Filed as Exhibit 4-F to Registration Statement
No. 33-49421)........................................... #
G. First Supplemental Indenture to Indenture
referred to in Exhibit 4-F dated as of June 1, 1993
(Filed as Exhibit 4-G to Registration Statement
No. 33-49421)........................................... #
H. Second Supplemental Indenture to Indenture
referred to in Exhibit 4-F dated as of June 15, 1993
(Filed as Exhibit 4-G to Registration Statement
No. 33-57955)........................................... #
I. Trust Agreement for SCE&G Trust I (Filed as
Exhibit 4-C to Registration Statement No.
333-37787 and 333-37787-01)............................. #
J. Certificate of Trust for SCE&G Trust I (Filed as
Exhibit 4-B to Registration Statement No.
333-37787 and 333-37787-01)............................. #
K. Form of Junior Subordinated Indenture for SCE&G Trust I
(Filed as Exhibit 4-A to Registration Statement
No. 333-37787 and 333-37787-01)......................... #
L. Form of Guarantee Agreement for SCE&G Trust I
(Filed as Exhibit 4-F to Registration Statement
No. 333-37787 and 333-37787-01)......................... #
M. Form of Amended & Restated Trust Agreement for SCE&G
Trust I (Filed as Exhibit 4-D to Registration Statement
No. 333-37787 and 333-37787-01)......................... #
10. Material Contracts
Not Applicable
11. Statement Re Computation of Per Share Earnings
Not Applicable
15. Letter Re Unaudited Interim Financial Information
Not Applicable
18. Letter Re Change in Accounting Principles
Not Applicable
19. Report Furnished to Security Holders
Not Applicable
22. Published Report Regarding Matters Submitted to
Vote of Security Holders
Not Applicable
23. Consents of Experts and Counsel
Not Applicable
24. Power of Attorney
Not Applicable
27. Financial Data Schedule (Filed herewith)
99. Additional Exhibits
Not Applicable
# Incorporated herein by reference as indicated.
21
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE CONSOLIDATED
BALANCE SHEET AS OF SEPTEMBER 30, 1997 AND THE CONSOLIDATED STATEMENTS OF INCOME
AND RETAINED EARNINGS AND OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30,
1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1997
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 3,602,994
<OTHER-PROPERTY-AND-INVEST> 383,870
<TOTAL-CURRENT-ASSETS> 456,572
<TOTAL-DEFERRED-CHARGES> 435,987
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 4,879,423
<COMMON> 1,153,615
<CAPITAL-SURPLUS-PAID-IN> 0
<RETAINED-EARNINGS> 598,447
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,763,581
40,093
126,027
<LONG-TERM-DEBT-NET> 1,494,956
<SHORT-TERM-NOTES> 59,794
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 133,026
2,442
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,271,023
<TOT-CAPITALIZATION-AND-LIAB> 4,879,423
<GROSS-OPERATING-REVENUE> 1,135,650
<INCOME-TAX-EXPENSE> 93,707
<OTHER-OPERATING-EXPENSES> 799,398
<TOTAL-OPERATING-EXPENSES> 893,105
<OPERATING-INCOME-LOSS> 242,545
<OTHER-INCOME-NET> 16,555
<INCOME-BEFORE-INTEREST-EXPEN> 259,100
<TOTAL-INTEREST-EXPENSE> 90,858
<NET-INCOME> 168,242
(6,736)
<EARNINGS-AVAILABLE-FOR-COMM> 161,506
<COMMON-STOCK-DIVIDENDS> 121,225
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 354,338
<EPS-PRIMARY> 1.51
<EPS-DILUTED> 0
</TABLE>
