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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 June 30, 1997
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-8809
SCANA Corporation
(Exact name of registrant as specified in its charter)
South Carolina 57-0784499
(State or other jurisdiction of (I.R.S. Employer
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.
107,105,095 Common Shares, without par value, as of June 30, 1997
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SCANA CORPORATION
INDEX
PART I. FINANCIAL INFORMATION Page
Item 1. Financial Statements
Consolidated Balance Sheets as of June 30, 1997
and December 31, 1996.................................... 3
Consolidated Statements of Income and Retained Earnings
for the Periods Ended June 30, 1997 and 1996............. 5
Consolidated Statements of Cash Flows for the Periods
Ended June 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........................................ 16
Item 4. Submission of Matters to a Vote of Security-Holders...... 16
Item 6. Exhibits and Reports on Form 8-K......................... 16
Signatures........................................................ 17
Exhibit Index..................................................... 18
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PART I
FINANCIAL INFORMATION
SCANA CORPORATION
CONSOLIDATED BALANCE SHEETS
As of June 30, 1997 and December 31, 1996
(Unaudited)
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June 30, December 31,
1997 1996
(Thousands of Dollars)
ASSETS
Utility Plant:
Electric................................................... $4,168,395 $4,135,567
Gas........................................................ 543,198 540,196
Transit.................................................... 3,767 3,923
Common..................................................... 80,651 81,858
Total.................................................... 4,796,011 4,761,544
Less accumulated depreciation and amortization............. 1,568,109 1,517,847
Total.................................................... 3,227,902 3,243,697
Construction work in progress.............................. 281,321 219,150
Nuclear fuel, net of accumulated amortization.............. 38,497 41,006
Acquisition adjustment-gas, net of accumulated
amortization............................................. 24,677 25,175
Utility Plant, Net.................................... 3,572,397 3,529,028
Nonutility Property and Investments, net of accumulated
depreciation and depletion................................. 351,414 345,248
Current Assets:
Cash and temporary cash investments........................ 20,136 17,349
Receivables................................................ 217,001 239,286
Inventories (at average cost):
Fuel..................................................... 56,280 67,428
Materials and supplies................................... 50,485 49,449
Prepayments................................................ 21,264 13,276
Deferred income taxes...................................... 20,364 20,776
Total Current Assets.................................. 385,530 407,564
Deferred Debits:
Emission allowances........................................ 30,524 30,457
Environmental.............................................. 40,537 41,375
Nuclear plant decommissioning fund......................... 45,491 42,194
Pension asset, net......................................... 66,301 57,931
Other...................................................... 259,939 305,549
Total Deferred Debits................................. 442,792 477,506
Total....................................... $4,752,133 $4,759,346
See notes to consolidated financial statements.
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SCANA CORPORATION
CONSOLIDATED BALANCE SHEETS
As of June 30, 1997 and December 31, 1996
(Unaudited)
<S> <C> <C>
June 30, December 31,
1997 1996
(Thousands of Dollars)
CAPITALIZATION AND LIABILITIES
Stockholders' Investment:
Common Equity:
Common stock (without par value)......................... $1,148,255 $1,125,282
Retained earnings........................................ 564,377 558,166
Net Unrealized Holding Loss on Securities................ (2,706) -
Total Common Equity..................................... 1,709,926 1,683,448
Preferred Stock of Subsidiary (not subject to purchase
or sinking funds)........................................ 126,027 26,027
Total Stockholders' Investment.......................... 1,835,953 1,709,475
Preferred Stock of Subsidiary, net (subject to purchase
or sinking funds).......................................... 41,033 43,014
Long-term debt, net.......................................... 1,548,571 1,581,608
Total Capitalization.................................. 3,425,557 3,334,097
Current Liabilities:
Short-term borrowings...................................... 53,715 144,599
Current portion of long-term debt.......................... 92,713 51,220
Current portion of preferred stock......................... 2,432 2,432
Accounts payable........................................... 110,989 157,475
Customer deposits.......................................... 17,266 16,122
Taxes accrued.............................................. 54,653 70,610
Interest accrued........................................... 26,521 25,609
Dividends declared......................................... 43,364 40,773
Other...................................................... 7,768 7,200
Total Current Liabilities............................. 409,421 516,040
Deferred Credits:
Deferred income taxes...................................... 583,322 577,509
Deferred investment tax credits............................ 82,278 84,100
Reserve for nuclear plant decommissioning.................. 45,491 42,194
Other...................................................... 206,064 205,406
Total Deferred Credits................................ 917,155 909,209
Total....................................... $4,752,133 $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 June 30, 1997 and 1996
(Unaudited)
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Three Months Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
(Thousands of Dollars, Except Per Share Amounts)
OPERATING REVENUES:
Electric............................... $247,452 $269,380 $ 500,049 $ 531,527
Gas.................................... 84,076 80,113 216,186 212,018
Transit................................ 433 893 843 1,803
Total Operating Revenues........... 331,961 350,386 717,078 745,348
OPERATING EXPENSES:
Fuel used in electric generation....... 55,031 67,128 109,360 124,131
Purchased power........................ 3,863 4,015 4,525 5,756
Gas purchased for resale............... 55,279 54,051 138,086 140,586
Other operation........................ 56,112 57,694 111,790 113,913
Maintenance............................ 20,527 18,292 36,017 33,261
Depreciation and amortization.......... 38,275 37,057 76,542 72,847
Income taxes........................... 18,921 22,766 49,854 57,030
Other taxes............................ 23,125 22,936 48,972 45,992
Total Operating Expenses........... 271,133 283,939 575,146 593,516
OPERATING INCOME......................... 60,828 66,447 141,932 151,832
OTHER INCOME:
Allowance for equity funds used
during construction.................. 1,279 1,601 3,198 3,306
Other income, net of income taxes...... 71 2,556 6,702 16,296
Total Other Income................. 1,350 4,157 9,900 19,602
INCOME BEFORE INTEREST CHARGES AND
PREFERRED STOCK DIVIDENDS.............. 62,178 70,604 151,832 171,434
INTEREST CHARGES (CREDITS):
Interest expense....................... 31,578 32,356 64,186 64,951
Allowance for borrowed funds used
during construction.................. (1,433) (1,420) (3,095) (3,369)
Total Interest Charges, Net........ 30,145 30,936 61,091 61,582
INCOME BEFORE PREFERRED STOCK CASH
DIVIDENDS OF SUBSIDIARY................ 32,033 39,668 90,741 109,852
PREFERRED STOCK CASH DIVIDENDS OF
SUBSIDIARY (At stated rates)........... (2,477) (1,368) (3,820) (2,739)
NET INCOME............................... 29,556 38,300 86,921 107,113
RETAINED EARNINGS AT BEGINNING OF PERIOD. 575,253 528,470 558,166 497,991
COMMON STOCK CASH DIVIDENDS DECLARED..... (40,432) (38,578) (80,710) (76,912)
RETAINED EARNINGS AT END OF PERIOD....... $564,377 $528,192 $ 564,377 $ 528,192
NET INCOME............................... $ 29,556 $ 38,300 $ 86,921 $ 107,113
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING (THOUSANDS)
(Note 1C)............................ 106,999 104,824 106,812 104,491
EARNINGS PER WEIGHTED AVERAGE SHARE
OF COMMON STOCK........................ $ .28 $ .37 $ .81 $ 1.03
CASH DIVIDENDS DECLARED PER SHARE OF
COMMON STOCK.......................... $ .3775 $ .3675 $ .7550 $ .7350
See notes to consolidated financial statements.
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SCANA CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Periods Ended June 30, 1997 and 1996
(Unaudited)
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Six Months Ended
June 30,
1997 1996
(Thousands of Dollars)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income............................................ $ 86,921 $ 107,113
Adjustments to reconcile net income to net cash
provided from operating activities:
Depreciation, depletion and amortization............ 91,466 92,440
Amortization of nuclear fuel........................ 10,783 7,933
Deferred income taxes, net.......................... 5,906 16,981
Pension asset....................................... (8,370) (6,208)
Over (under) collections, fuel adjustment clauses... 15,836 (443)
Allowance for funds used during construction........ (6,293) (6,675)
Early retirements................................... 8,283 (5,920)
Changes in certain current assets and liabilities:
(Increase) decrease in receivables................. 32,249 (20,723)
(Increase) decrease in inventories................. 10,112 16,800
(Increase) decrease in prepayments................. (7,988) (9,114)
Increase (decrease) in accounts payable............ (46,486) (8,316)
Increase (decrease) in taxes accrued............... (15,957) (26,493)
Increase (decrease) in interest accrued ........... 912 847
Other, net.......................................... (705) 18,829
Net Cash Provided From Operating Activities............. 176,669 177,051
CASH FLOWS FROM INVESTING ACTIVITIES:
Utility property additions and construction
expenditures, net of AFC............................ (98,090) (102,332)
Increase in other property and investment............. (40,948) (92,972)
Sale of subsidiary assets............................. 7,924 42,554
Net Cash Used For Investing Activities.................. (131,114) (152,750)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds:
Issuance of notes and loans......................... 24,844 60,000
Issuance of other long-term debt.................... - 30,720
Issuance of common stock............................ 24,841 37,083
Issuance of preferred stock......................... 99,000 -
Repayments:
First and Refunding Mortgage Bonds.................. (15,000) (22,000)
Redemption of notes................................. - (61,912)
Other long-term debt................................ (3,445) -
Preferred stock..................................... (1,981) (1,987)
Dividend payments:
Common stock........................................ (79,297) (75,638)
Preferred stock of subsidiary....................... (2,630) (2,747)
Short-term borrowings, net............................ (90,884) 18,721
Fuel and emission allowance financings, net........... 1,784 9,921
Net Cash Used For Financing Activities.................. (42,768) (7,839)
NET INCREASE IN CASH AND TEMPORARY
CASH INVESTMENTS...................................... 2,787 16,462
CASH AND TEMPORARY CASH INVESTMENTS AT JANUARY 1........ 17,349 16,082
CASH AND TEMPORARY CASH INVESTMENTS AT JUNE 30.......... $ 20,136 $ 32,544
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for - Interest (includes capitalized
interest of $3,095 and $3,369)....... $ 61,516 $ 62,791
- Income taxes.......................... 31,119 44,167
NONCASH INVESTING ACTIVITIES:
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.
See notes to consolidated financial statements.
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SCANA CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 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 June 30, 1997, approximately $237
million and $69 million of regulatory assets and liabilities,
respectively, including amounts recorded for deferred income
tax assets and liabilities of approximately $107 million and
$56 million, respectively. The electric regulatory assets of
approximately $83 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 $57 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 June 30, 1997
approximately $19.5 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 personal communications
services ("PCS") systems in major markets in the southeast.
Such investments, with book values of approximately $66.7
million, $75.1 million and $22.5 million, respectively, are
accounted for on the cost method. Common shares were 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 $14 5/8 per share and a low
of $9 1/2 per share during the second quarter and closed at $13
7/8 on June 30, 1997, resulting in a pretax unrealized holding
loss of $4.4 million, or $2.7 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 $63.1 million at June 30,
1997, resulting in an unrecorded pretax holding loss of $12.0
million, and the market value of the underlying common shares
for the series D preferred shares was approximately $24.5
million on June 30, 1997, resulting in an unrecorded pretax
holding gain of $2.0 million.
SCI also holds investments in ITC Holding Company, Inc. (ITC),
an affiliate of Powertel, of approximately 775,000 shares of
common stock and 588,000 shares of non-voting convertible
preferred stock, with book values of approximately $16.1
million and $18 million, respectively. Fair market values for
these investments are not readily determinable.
In March 1997 SCI sold its interest in GulfStates Fibernet, a
Georgia general partnership (constituting the remaining joint
venture interests of SCI), and certain fiber optic assets of
SCI located within the State of Georgia to ITC, a Georgia-
based telecommunications holding company, in exchange for the
non-voting convertible preferred stock described in the
previous paragraph and a subordinated note of ITC.
4. COMMITMENTS AND CONTINGENCIES:
A. Knology Holdings, Inc.
The Company has made a non-binding commitment to enter into a
loan agreement with Knology Holdings, Inc. ("Knology"), an
affiliate of ITC. Knology, formerly known as Cybernet Holding,
Inc., is developing a system which will provide interactive
video, voice and data services for broadband systems in certain
southeastern markets. Under the proposed agreement, the
Company or SCI can loan up to $40 million to Knology. Proceeds
will be used by Knology to support construction activities for
local/long distance telephone service, internet access and
digital cable television in Montgomery, Alabama and Columbus,
Georgia and for expansion of Knology's network into other
cities. Advances under the agreement will bear interest at a
per annum rate of 12% per annum and would be made through the
end of a funding period (currently anticipated to extend
through December 31, 1998), at which time the outstanding
amount would convert to a term loan payable in quarterly
installments over no more than a five-year period.
B. 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.
8
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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 $1.9 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.
C. 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
and accrued to date for site assessments and cleanup and
environmental claims settlements relate primarily to regulated
operations; such amounts are deferred (approximately $40.5
million) 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 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 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 expects to recover 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.
9
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,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.
SCE&G is pursuing recovery of environmental liabilities from
appropriate pollution insurance carriers. Site assessment and
cleanup costs recovered through rates are net of insurance
recoveries.
D. 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.
10
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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 $237
million and $69 million of regulatory assets and liabilities,
respectively, including amounts recorded for deferred income tax
assets and liabilities of approximately $107 million and $56
million, respectively, on its balance sheet at June 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.
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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 six months ended June 30, 1997
and 1996:
Six Months Ended
June 30,
1997 1996
(Thousands of Dollars)
Net cash provided from operating activities $176,669 $177,051
Net cash used for financing activities 42,768 7,839
Cash provided from sale of oil and gas properties - 42,554
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 $151,250 $227,848
Funds used for utility property additions
and construction expenditures, net of
noncash allowance for funds used during
construction $ 98,090 $102,332
Funds used for nonutility property
additions $ 13,112 $ 12,357
On January 12, 1996 SCANA closed on unsecured bank loans
totalling $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 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.
12
<PAGE>
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 the remaining joint
venture interests of SCI), and certain fiber optic assets of SCI
located within the State of Georgia to ITC, a Georgia-based
telecommunications holding company, in exchange for non-voting
convertible preferred stock and a subordinated note of ITC. The
preferred stock is convertible to common stock in March 2002.
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.
The Company has made a non-binding commitment to enter into a
loan agreement with Knology, under which the Company or SCI would
loan up to $40 million to Knology. Proceeds will be used by
Knology to support construction activities in Montgomery, Alabama
and Columbus, Georgia and for expansion of Knology's network into
other cities. Advances under the agreement will bear interest at
a rate of 12% per annum and would be made through the end of a
funding period (currently anticipated to extend through December
31, 1998), at which time the outstanding amount would convert to a
term loan payable in quarterly installments over no more than a
five-year period.
SCANA Petroleum Resources, Inc. (SPR) and Fina Oil and
Chemical Company (Fina) are parties to a joint exploration and
development agreement providing for joint oil and gas development
rights on approximately 400,000 acres in southern Louisiana. SPR
and Fina have completed approximately two-thirds of an extensive 3-
D seismic acquisition program on the property. Fina is the
operator of the multi-million dollar seismic program, which is
financed and owned primarily on a 50-50 basis between the
companies. SPR's participation in the seismic and drilling
activity is financed largely with internal cash flows from the
existing SPR operations.
SPR and Cobra Oil Gas Corporation (COBRA) are parties to a
joint participation agreement providing for the exploration and
development of fifteen field areas in Arkansas, Louisiana, New
Mexico and Texas. SPR's average interest in the program is
approximately 30%. Under the agreement, SPR has acquired an
interest in 83,000 acres and an extensive and fully processed 3-D
seismic data covering 900 square miles.
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 June 30, 1997 was 3.37.
13
<PAGE>
SCANA CORPORATION
Results of Operations
For the Three and Six Months ended June 30, 1997
As Compared to the Corresponding Periods in 1996
Earnings and Dividends
Net income for the three and six months ended June 30, 1997
decreased approximately $8.7 million and $20.2 million,
respectively, when compared to the corresponding periods in 1996.
A lower electric margin, resulting from milder weather in the
current periods, was a primary factor for the drop in earnings.
Operating results at SPR also contributed to the decline in
earnings. SPR's net income for the three and six months ended June
30, 1997 decreased by $3.2 million and $5.0 million, respectively,
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 six months ended June 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 5%
and 4% of income before income taxes for the six months ended June
30, 1997 and 1996, respectively.
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 is payable on July
1, 1997 to common stockholders of record on June 10, 1997.
Sales Margins
The change in the electric sales margins for the three and six
months ended June 30, 1997, when compared to the corresponding
periods in 1996, were as follows:
Three Months Six Months
Change % Change Change % Change
(Millions) (Millions)
Electric operating revenues $(21.9) (8.1) $(31.5) (5.9)
Less: Fuel used in electric
generation (12.1) (18.0) (14.8) (11.9)
Purchased power (0.1) (5.0) (1.2) (21.4)
Margin $ (9.7) (4.9) $(15.5) (3.9)
The electric sales margins decreased for the three and six
months ended June 30, 1997, when compared to the corresponding
periods 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.
14
<PAGE>
The changes in the gas sales margins for the three and six
months ended June 30, 1997, when compared to the corresponding
periods in 1996, were as follows:
Three Months Six Months
Change % Change Change % Change
(Millions) (Millions)
Gas operating revenues $4.0 5.0 $ 4.2 2.0
Less: Gas purchased for resale 1.2 2.3 (2.5) (1.8)
Margin $2.8 10.5 $ 6.7 9.3
The gas sales margins increased for the three and six months
ended June 30, 1997, when compared to the corresponding periods
in 1996. 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 six months ended June 30, 1997, when compared to
the corresponding periods in 1996, are presented in the following
table:
Three Months Six Months
Change % Change Change % Change
(Millions) (Millions)
Other operation and maintenance $ 0.7 0.9 $ 0.6 0.4
Depreciation and amortization 1.2 3.3 3.7 5.1
Income taxes (3.9) (16.9) (7.2) (12.6)
Other taxes 0.2 0.8 3.0 6.5
Total $(1.8) (1.1) $ 0.1 0.0
Other operation and maintenance expenses for the three and six
months ended June 30, 1997 increased only slightly from 1996
levels. Increased maintenance costs at electric generating plants
were largely offset by 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. The increase in depreciation and amortization expenses for
the three and six months' comparisons reflects the addition of the
Cope Plant and other additions to plant in service. The decrease
in income tax expense for the three and six months results from the
decrease in operating income. The increase 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 three and six
months ended June 30, 1997 decreased $2.5 million and $9.6 million,
respectively, when compared to the corresponding periods of 1996.
The principal factors accounting for the drop in other income is
the nonrecurring gain reported by SCI, which is included in other
income reported for the six months ended June 30, 1996. See
"Earnings and Dividends."
15
<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 and 5 are not applicable.
Item 4. Submission of Matters to a Vote of Security-Holders
The Annual Meeting of the Shareholders of SCANA Common
Stock (No Par Value) was held on April 24, 1997. The
following matters were voted upon at the meeting.
1. To elect two (2) directors for the terms specified in
the Proxy Statement.
Number of Number of Shares Total
Shares Voting Voting to Shares
Nominee For Withhold Authority Voted
Lynne Miller 93,431,707 787,637 94,219,345
William B. Timmerman 93,575,065 644,279 94,219,345
2. To approve the appointment of Deloitte & Touche LLP
as independent accountants for the Corporation.
Number
of
Shares
FOR 93,672,649
AGAINST 251,931
ABSTAIN 294,765
TOTAL 94,219,345
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
16
<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)
August 12, 1997 By: s/K. B. Marsh
K. B. Marsh, Vice President -
Finance, Chief Financial Officer
and Controller
17
<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.
18
<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.
19
<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)........................................... #
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
20
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE CONSOLIDATED
BALANCE SHEET AS OF JUNE 30, 1997 AND THE CONSOLIDATED STATEMENTS OF INCOME AND
RETAINED EARNINGS AND OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1997
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 3,572,397
<OTHER-PROPERTY-AND-INVEST> 351,414
<TOTAL-CURRENT-ASSETS> 385,530
<TOTAL-DEFERRED-CHARGES> 442,792
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 4,752,133
<COMMON> 1,148,255
<CAPITAL-SURPLUS-PAID-IN> 0
<RETAINED-EARNINGS> 564,377
<TOTAL-COMMON-STOCKHOLDERS-EQ> 1,709,926
41,033
126,027
<LONG-TERM-DEBT-NET> 1,548,571
<SHORT-TERM-NOTES> 53,715
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
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<OTHER-OPERATING-EXPENSES> 525,292
<TOTAL-OPERATING-EXPENSES> 575,146
<OPERATING-INCOME-LOSS> 141,932
<OTHER-INCOME-NET> 9,900
<INCOME-BEFORE-INTEREST-EXPEN> 151,832
<TOTAL-INTEREST-EXPENSE> 61,091
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<EARNINGS-AVAILABLE-FOR-COMM> 86,921
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